Live selling on social media platforms like Facebook and Instagram has become increasingly popular over the past few years. Brands and creators have used features like Live Shopping and Instagram Live to promote and sell products directly to their followers. However, Meta (formerly Facebook) recently announced that they will be removing the Live Shopping feature from Facebook as well as the ability for creators to tag products on Instagram Live in 2023. This leaves many wondering why Meta is stepping back from live selling.
The Rise of Live Selling
Live selling gained significant traction during the COVID-19 pandemic when in-person shopping was limited. For example, Facebook Live Shopping generated $3 billion in sales in 2020. Brands and creators realized they could demonstrate and promote products in real-time to consumers who were stuck at home. It provided a convenient way for brands to move their in-store or catalog sales online and generate revenue during challenging times. Consumers enjoyed the interactivity and product recommendations from creators they followed. In many ways, it helped both sellers and buyers adapt during the uncertainties of a pandemic.
The success seen on Facebook inspired other platforms like Instagram, TikTok, and YouTube to add their own live shopping capabilities. Instagram Live Shopping launched in late 2020, allowing sellers to tag products that viewers could tap to learn more and purchase. The rise of shoppable livestreams generated a lot of excitement and momentum in the ecommerce industry.
Why is Meta Removing Live Selling?
In April 2022, Meta announced it will be sunsetting Live Shopping on Facebook by October 2022. Creators will also lose the ability to tag products in Instagram Live and Reels in March 2023. This came as a surprise to many who had just started leveraging live selling features on these platforms.
So why is Meta pulling back on what seemed like a promising new shopping format? There are a few likely factors at play:
Limited Adoption & Engagement
While live shopping received a lot of initial hype, actual adoption and engagement has been fairly limited. According to Meta’s own data, Live Shopping only drove around $300 million in sales across Facebook and Instagram in 2021. That’s less than 0.1% of Meta’s over $118 billion in total advertising revenue that year. Engagement also tended to drop off quickly after the live event ended.
Essentially, live shopping failed to take off as expected. The majority of consumers still were not turning to social platforms as their main source for shopping. And brands struggled to produce engaging, interactive live shopping content regularly. The overall interest and habits were not quite there yet to support major investment in these features.
Prioritizing Reels & Short-Form Video
As engagement with live shopping floundered, Reels and short-form video content exploded on Instagram and Facebook. This is content that people are more commonly engaging with and sharing across social platforms. Meta is now clearly prioritizing Reels over live video features.
Meta has said the removal of live shopping will allow them to “focus more on Reels and short-form video while continuing to invest in Facebook Shops.” They believe focusing investment on areas that drive more engagement and revenue like Reels makes the most long-term sense for the business.
Operational Challenges
On the operational side, live shopping introduced more complexities around inventory, order fulfillment, and customer service for brands. Keeping track of inventory and order volumes in real-time during a live event requires tight coordination. Many brands found themselves scrambling to meet demand or having to issue refunds for products that went out of stock mid-stream.
The logistics around shipping, returns, and other support for live shopping purchases also proved difficult for sellers. Platforms like Facebook were never designed to be full-fledged ecommerce backends. Trying to layer on live selling put a strain on existing operations that brands were not prepared for.
Poor Monetization Model
Lastly, Meta itself struggled to figure out an effective monetization model for live shopping. Initially, it focused on having brands and creators pay set fees to use Live Shopping features. However, uptake at those price points was low. Meta also had to cover additional costs to support services like real-time order management without generating meaningful revenue in return.
Moving forward, Meta seems to have decided that focusing on more established and higher ROI products like ads and branded content makes the most financial sense. Live shopping was ultimately an experiment that failed to produce a strong new revenue stream.
How Does This Impact Sellers & Shoppers?
The removal of live selling features on Instagram and Facebook will require brands and creators to once again shift strategies. And it takes away a potentially convenient shopping gateway for some consumers. Here are a few key impacts these changes will have:
Brands Lose a Sales Channel
For brands that had started leveraging live shopping, this takes away what they saw as a promising new sales channel. They’ll have to move any resources focused on Facebook Live Shopping or Instagram Product Tagging over to other areas like Reels or TikTok. Losing that ability to convert followers into buyers in real-time will be a disadvantage for some.
Smaller sellers in particular may have relied on live shopping as an affordable way to demonstrate products. The barrier to entry was lower compared to setting up their own ecommerce site. Larger brands will likely shift strategies easier with their established online stores and sales teams. But small businesses may lose an outlet that was just starting to gain traction.
Influencers Have Less to Promote
The changes impact influencers who partnered with brands around live shopping as well. A big appeal was being able to easily showcase and link out to featured products while streaming. Watching an influencer engage with products in real-time felt more authentic and interactive for audiences.
Without the ability to tag products on Instagram Live, influencers will have to find other ways to integrate suggested purchases. More product features may shift to regular feed posts and Stories. Some may look to other platforms like TikTok or YouTube that still allow live shopping tags. Ultimately, it may impact how sponsorships are structured going forward.
Consumers Lose Personalized Shopping Experience
On the consumer side, some will miss the engaging, interactive elements of live shopping events. Being able to ask questions and see products showcased in real-time rather than a static ad or post provided value. The social connections with hosts, influencers, or brand reps created a personalized feel as well.
Meta points to Facebook Shops and other commerce features that will remain. However, the loss of live events takes away a unique social shopping environment. Brands will have to find ways to replicate the interactivity through regular short-form social content. And consumers will have to seek out alternatives like live stream shopping on other platforms.
What’s Next for Social Commerce?
While Meta steps back from live shopping, the broader social commerce trend is clearly not going away. Other platforms are actually doubling down and expanding their efforts. Most experts agree social will continue to grow as an important shopping and discovery channel. Here are some areas to watch:
TikTok Shop & Live Shopping
TikTok is betting big on social commerce with TikTok Shop and its own live shopping features. It’s pursuing aggressive expansion in ecommerce, especially across Asia. TikTok already drove an estimated $26 billion in sales in 2021. And it has huge opportunities in Western markets. Expect TikTok to become a major player in social shopping going forward.
Instagram Shopping Features
Instagram still offers a robust shopping experience despite losing live sell. Shopping tabs, product tags, drop tags, and more continue to help users discover and purchase items they discover. Simplifying tagging and expanding shoppable stickers and filters are other areas to watch. And Instagram Checkout for completing purchases without leaving the app could finally roll out widely.
Live Commerce Innovation
Live shopping is still evolving and platforms are continuing to innovate around the model. For example, YouTube recently added new integrated shopping capabilities during live streams. Features that make live commerce easier for sellers and more engaging for buyers may finally gain mainstream traction.
In-Feed & Stories Shopping
Static social content has proven better at driving consistent shopping engagement over time. Look for more brands to integrate in-feed shoppable posts and Stories shopping ads as lower-lift complements to live video. The curated, editorial-style experience of regular content will likely play a key role in social commerce strategies.
In many ways, social shopping remains a big unknown. But the underlying consumer interest in buying through social platforms won’t disappear overnight. Losing live events marks a setback for Meta, but brands, influencers, and other platforms have plenty of incentives to figure out what social shopping 2.0 looks like.
Conclusion
Live selling offered a glimpse into the future of social commerce. However, actual consumer readiness and operational capabilities proved challenging. Meta has clearly decided that other product areas like Reels present better growth opportunities for now.
For brands and sellers, this will require changing course after initial excitement and investment around live shopping. Consumers also lose out on some of the interactive elements that made live events engaging. At the same time, live shopping still appears poised for growth in areas like TikTok and YouTube.
The ideal model that finally unlocks mainstream social commerce likely involves a blend of live events, short-form video, and in-feed content. Meta may be stepping back from live, but the evolution of shopping on social continues. Brands need to pay attention to broader trends and be ready to adapt as new platforms and formats take off. The revenue potential remains massive once the pieces fall into place.