What Instagram’s Shop tab removal means for social media

• Instagram in February will remove the Shop tab from its in-app navigation bar, according to a company announcement. 
• In its place, the Meta-owned platform will add a shortcut to create content in the center of the navigation bar and a Reels shortcut to the right of it in an effort to promote content creation and consumption. Despite removing the Shop shortcut, users are still encouraged to set up and run shops on the app.
• The news follows several platform updates within the last year targeted at a smoother shopping experience and suggests Meta is now placing stronger bets on its original business approach amid two consecutive quarters of revenue decline. 

Social commerce shows signs of promise, if platforms can get it right. This time last year, Accenture predicted that the global social commerce market will reach $1.2 trillion by 2025, up from $492 billion in 2021. Insider Intelligence this week also pointed to the sector as a projected high point for 2023. However, in the chase for the largest share of the market, most platforms and their strategies are in the touch-and-go stage — Instagram being no different. 

The Meta-owned platform took several steps in the last year to support its social commerce ambitions, like expanding its product tagging capabilities and launching an in-chat payment feature. On the flip side, Meta in August announced it would halt its live shopping feature on Facebook and, in September, told Instagram employees that it would be scaling back shopping features. By October, Meta reported revenue in Q3 declined for the second consecutive quarter. These days, the company appears to be reevaluating its approach, possibly in favor of more traditional offerings that focus on discovery.

“Given Meta’s current challenges it seems that they are reverting back to their ‘core’ business model of content, engagement, connections underpinned by paid advertising,” Ant Duffin, senior director analyst in the Gartner Marketing Practice, said in an email to Marketing Dive. “These are a fundamental aspect of social commerce, so they have that base covered short term.”

Looking ahead, Instagram noted in its recent announcement about the Shop tab that it would continue investing in its shopping experience and that users with shops on the app can proceed with business as usual.

The navigation bar replacements — which focus on content creation and Reels — see the platform continuing to prioritize its TikTok-like features. However, these moves could set Meta up for future challenges, Duffin noted, adding that TikTok’s explosive growth is at the same time accelerating its own long-term, end-to-end social commerce plans, which now includes talk of U.S. fulfillment centers.

While Meta has previously seen success betting on its core functions, this may not be enough these days.

“As it currently stands, paid ad formats on platforms such as Facebook and Instagram have a relatively higher level of maturity and effectiveness, but Gartner expects TikTok to challenge that in the next 12-18 months,” Duffin said.

As platforms iron out their social commerce strategies, advertisers face challenges, Duffin added. Namely, consistent shifts and changes in the social commerce features being offered on various platforms create a certain level of uncertainty. As such, determining the most effective strategy could get cloudy, and marketers should prioritize gauging overall maturity and innovation of various tactics over time without shying away from exploration, he said.

“Paid advertising and shoppable content are table stakes execution to drive the path to purchase, but we encourage marketing leaders to explore near-term emerging opportunities such as live commerce streaming as a test and learn activity,” Duffin said.