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What the removal of IG shop tab says about its commerce priorities

What the removal of IG shop tab says about its commerce priorities

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Instagram is revamping its navigation bar once again and this time, it is making a strategic, and possibly significant decision by removing its shopping tab from the main bar at the bottom of its screen. The Reels tab will now replace the shop tab.

"All they are saying is Reels is more engaging than scrolling on a shopping tab. It’s fine if you shop a bit less but it’s not ok if you post less content or consume less content," explained Neeraj Gulati, a partner at Entropia.

While this may seem new, Instagram actually began testing out a main feed without the shopping button from September last year when it attempted to simplify the user experience. The test was part of a larger pivot away from its shopping features, according to an internal memo seen by The Information. Saying that, shopping is still part of the app. It simply will no longer have a prominent spot on the home feed.

“You will still be able to set up and run your shop on Instagram as we continue to invest in shopping experiences that provide the most value for people and businesses across feed, stories, reels, ads and more,” Instagram said on its support page.

However, could this removal spell trouble for social commerce and smaller brands that rely heavily on social media to sell their products? MARKETING-INTERACTIVE spoke to industry players to find out more.

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Strange situations bring out strange behaviours and this was the case of putting a dedicated tab on the hottest real estate of Instagram, according to Gulati. "Lockdown was an unprecedented event and we all had unprecedented reactions to it, one of which was freedom shopping. Ferreting out a little space where we have a sense of being in control and doing exactly what we want and not necessarily what we need," he added.

Now as the competition heats up Instagram is going back to basics: engagement.

Agreeing with Gulati was Matthew Zeng, the managing director of creative agency DSTNCT, who said the move was very telling of where Instagram's priorities lie right now. He added that it's every social platform's dream to own commerce end-to-end, and social commerce has shown signs of promise when done right. "Ecommerce platforms such as Amazon are really good at selling products once a user knows what they want, but these platforms don't have the ability to create demand for a product. They will never be able to do so and that's where social platforms come in. That's the advantage,” Zeng added.

He continued by saying that unfortunately, Meta is yet to grow its market share in social commerce to a point where it can go all in. “There have been reports about how Meta has over-estimated the growth of Instagram Shop amidst COVID-19 and now that countries are re-opening, the growth has slowed down drastically. It also doesn't help that Meta has been facing multiple calls to make Instagram Instagram again, and to stop trying to be TikTok,” continued Zeng.

Zeng here brings up an interesting point. As Instagram pivots in its attempt to draw its audience away from TikTok and back to its platform, it is surprising that it would move away from in-app shopping, a feature that is key on TikTok.

Known as TikTok Shop, the feature allows brands, merchants and creators to sell their products to their consumers directly through in-feed videos. In its TikTok What’s Next Report 2022, TikTok reported that 73% of respondents surveyed felt a deeper connection to brands they interacted with on TikTok compared to others, with 67% saying that TikTok inspired them to shop even when they weren't looking to do so.

Shopping in real life still has the charms

"I think Instagram is already behind with its in-app shopping experiences, which could have led to this decision. I personally, have never purchased anything off an Instagram shop, whereas I actively shop on Tiktok, whom I believe, is way ahead of Instagram in social commerce experiences," shared Kimberley Olsen, the director of Yatta Workshop, a creative digital agency that specialises in social media management.

She continued by saying that this was likely why Instagram is not succeeding in its bid to enter social commerce the way TikTok is. "Social commerce has taken a very different route from a simple buy button. Users now are treated to 'shoppertainment', a term coined by TikTok, with live sales and flash sales, product introductions videos and demos. We have seen how influencers and celebrities are already hopping on the live sales format and users definitely love seeing their favorite influencers live and enjoy engaging with them directly. This format has proven to have made a large, positive impact on its audience," Olsen continued. 

We have come to an age of social where content is more demanding and so perhaps, a simple shop button is no longer as compelling. 

The removal of the feature also indicates that shopping in real life still has charms and attractions for consumers, according to Sandeep Joseph, the CEO and co-founder of Ampersand Advisory. "Just walk into any mall and you can see people congregating," he said.

According to a report by International Monetary Fund, on average, the online share of total retail spending rose sharply from 10.3 percent in 2019 to 14.9 percent at the peak of the pandemic, but then fell to 12.2 percent in 2021. "We are receding to a norm that’s higher than pre-pandemic, but still lower than the peak of the Covid times," he added.

From transactional commerce to social commerce

As such, it would seem that professionals feel like it might be more prudent for Instagram to stick to what it knows best. Ranganathan Somanathan, the co-founder and curator of RSquared Global Ventures, a business consulting service emphasised that Instagram was not getting rid of the shopping experience in its entirety.

"They are just adjusting the play to social commerce than just transactional commerce, where people shop on the platform as part of their social engagement," he said. He also said that the risk of going purely eCommerce without a social element could potentially decrease time spent per person on platform and therefore reduce advertising inventory over time, which in turn would result in lower advertising revenue for Meta, the dominant economic engine for the company. 

He added that if one were to dig deeper, they would see that this move only strengthens social commerce where brands can create content on their own or through influencers with commerce imbedded in it. "As such, if executed well, this strategy might give Meta enough ammunition to fight back against the likes of TikTok and gain back some foothold."

Agreeing on the point was DSTNCT's Zeng, who said it is good that Meta decides to deprioritise the shop function and go back to its core offerings and the appeal of content creation, specifically in photos. "If they don't do what they are supposed to do well and start losing users to TikTok, then it wouldn't be able to flex that demand-creating muscle that I was talking about earlier. Which essentially renders the Shop function irrelevant either way. By doubling down on what makes them unique and popular, Instagram will be more appealing to content creators, influencers and users again," he added.

“If they are able to keep them on the platform, then businesses will continue to stay and advertisers will continue to spend. That's where periphery functions like Shop can be a value-add. It needs to go back to what is causing Instagram to lose its shine and fix that first. So, it's a great move in my opinion, to re-evaluate their navigation and bring back what really matters - the Compose function,” he explained. “And because of this, we may one day just see the emergence of #InstagramMadeMeBuyIt.”

Deanson Lee, the head of digital at Havas Media Group also said that as organisations such as Meta continue to focus on its efforts to ensure growth in the usage of its platforms, advertisers and agencies should adapt accordingly to the environment they provide while continuing to be seamless about integrating commerce features.

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