As Instagram Moves Away from Live Shopping, Emerging Platforms Gain Market Share
Despite its popularity among social media influencers and B2C brands, Instagram recently discontinued Live Shopping, a feature that allowed creators to tag products and promote links in live broadcasts.
For hundreds of thousands of brands and agencies that rely on live shopping for product promotion and marketing, the move is a major blow. Interactive shopping via live stream video has become incredibly popular in recent years, with retailers like Dick’s Sporting Goods, Macy’s, and American Eagle investing heavily during peak seasons and high-value promotion periods, like back-to-school and the holidays.
Instagram’s decision to kill Live Shopping comes seven months after Facebook, also owned by Meta, announced similar changes. The company ended its experiment into interactive shopping back in August.
“When a major social media platform like Instagram tests a new feature like Live Shopping, it’s a significant accomplishment. However, the recent update that removes the ability to tag products during a live stream suggests that the platform needs to invest more time internally in developing this feature,” says Tim Gray, director of corporate and brand communications at Agora, a real-time engagement technology provider used by companies like HP and Bose.
Gray says the decision by Instagram to kill Live Shopping could, at least in part, be due to the unexpected surge of consumers using the feature, which caused “several internal issues.”
“Although they did not disclose the specifics of the issues, it’s evident that their platform requires a significant overhaul to support e-commerce logistics, such as frictionless shopping experiences for brands and retailers, customer returns, payment transactions, and business intelligence data,” Gray says.
Thousands of brands and creators have used Live Shopping on Instagram since the feature launched in 2020. While creators will still be able to livestream on Instagram, they won’t be able to easily integrate product links while they do it. Without that capability, it’s likely that many creators will shift to other platforms.
So where will they go?
Gray says the death of Instagram’s Live Shopping feature is creating new opportunities for other platforms to grab market share in interactive live shopping, even as the technology continues to evolve.
“Live Shopping will eventually become the primary way consumers purchase goods. The way we engage with online shopping has evolved drastically. We prefer to discover items quickly, and we want more products for less,” Gray says. “Live Shopping has the potential to simplify our lives, enabling us to find new products that enhance our lifestyle.”
In the race to become the de facto platform for livestream shopping, TikTok is clearly in the lead. Since launching its live shopping feature in the U.S. last year, and allowing brands to integrate products from their TikTok Shopping experience into live sessions, the company has won major market share.
Pinterest is also growing its presence in the space, having launched Pinterest TV back in 2021 and a standalone Pinterest TV Studio app that allows select creators to go live on Pinterest in 2022.
Other emerging startups could stand to benefit, as well. With Instagram out of the way, Uberall’s Alyssa Trenkamp says she expects to see more consumers looking to platforms like Nextdoor and even the Metaverse for a more personalized discovery path when shopping online.
“Social media channels like Instagram are highly influential in the brand discovery process, especially among younger consumers—Gen Z—in particular,” Trenkamp says. “Gen Z will look for options where they can ask for recommendations from friends, search up and discover new places and share their discoveries with their friends in a way that feels more authentic and less formulaic.”