Instagram sunsets live shopping as commerce retreat continues

Instagram is sunsetting live shopping on March 16, according to a post on its website. The move is the latest in a series of commerce-related pullbacks from the Meta Platforms app and follows the removal of the Shop tab from its navigation bar this month. 

Creators and brands who are livestreaming will no longer be able to tag products to sell in their broadcasts, Instagram said. The change does not affect other livestreaming features, such as the option to invite guests to a session or host Q&As with viewers. It also does not impact the ability to set up and manage a shop on the larger Instagram platform, and the app affirmed that it is continuing to invest in shopping experiences around its main feed, stories, ads and the TikTok lookalike Reels — the latter a key piece of its growth strategy.

Still, axing Instagram live shopping is another sign that Meta has struggled to maintain consumer interest in social commerce after the channel seemed like a promising driver of engagement and revenue earlier in the pandemic. Instagram first rolled out live shopping in 2020, at a point when many brick-and-mortar retailers remained closed due to health restrictions. Meta last fall shut down a similar live shopping feature on its core Facebook app.

Meta is focused on becoming a leaner organization following a brutal few quarters of declines. Revenue was down 4% year-on-year in the fourth quarter to $32.2 billion, as the company contended with weak advertiser demand and ongoing challenges around iOS changes that have made tracking and measuring mobile campaigns more difficult.

The social networking giant has said it is directing more attention and resources toward the metaverse — an experimental and costly long-term bet — and Reels, which is increasingly popular with users but relatively immature regarding monetization. Meta last year enacted a steep round of layoffs, and the Financial Times earlier this week reported that more job cuts could be in the cards in the near future. Meta CEO Mark Zuckerberg has promised that 2023 will be a “year of efficiency” for the embattled firm as it tries to right its ship. 

TikTok, which Reels closely emulates, has also struggled to crack the code on social commerce despite its popularity with digital natives like Gen Z and young millennials. Social commerce is a widely adopted tactic in others markets like China but has yet to take off in the U.S. in a broad sense.