In a video that garnered over 2 million views, Adam Mosseri, the head of Instagram, announced where the app is headed in the future.
“We’re no longer a photo-sharing app,” he said. Instead, Instagram will lean into four key areas: creators, video, messaging and shopping. As to why shopping made the list, Mosseri said the pandemic “accelerated the shift of commerce from offline to online by a number of years, and we’re trying to lean into that trend.”
The announcement garnered mixed reactions in the comment section — some went as far as to claim the move would sabotage the app’s foundations. But to experts who’ve been watching the industry closely, the app’s shift away from primarily being a social media app is a culmination of what giants in the space have slowly been tapping into since the pandemic’s early days: online shopping.
When it became apparent that e-commerce sales were going to reach record highs last year as the threat of the virus kept consumers at home, social media platforms like Instagram, Facebook, Snapchat and others quickly released several shopping features in a row in a bid to claim their stake in the social commerce market and diversify their revenue streams.
Instagram, for instance, introduced Shops on the app in May last year, an online store in the app that lets businesses customize their shop’s look. The company then announced its new commerce eligibility requirements, which opened its shopping feature to a broader range of businesses and creators, and launched Shopping in Reels.
Instagram declined to comment on the details of its newfound shopping focus.
“Thanks to the pandemic-driven e-commerce boom as well as increased social media consumption, we saw all of the major social platforms roll out new offerings, fine tune their existing offerings,” said Jasmine Enberg, eMarketer senior analyst at Insider Intelligence, covering global trends in social media.
Based on a recent report by eMarketer, social commerce in the U.S. has indeed been picking up steam. This year, sales rose 35.8% to $36.62 billion from $26.97 billion in 2020 and $19.42 billion in 2019 pre-pandemic, the report indicates. In 2025, eMarketer expects social commerce sales to reach $79.64 billion.
“It’s not exactly new. Most of the social platforms did have some shopping functionalities for many years,” Enberg said. “But with more and more people using social media, and more and more people buying online, [e-commerce] just seemed like a natural next step.”
Social media’s place in e-commerce
The role of social media has slowly shifted its place in the consumer’s purchasing journey one innovation at a time — from being a tool to discover new products to becoming the channel where these products are purchased, said Yuval Ben-Itzhak, president and chief of strategy at Emplifi.
“One of the most well-known advantages is reach,” Ben-Itzhak said. “The reach of social to billions of people over there, there’s no place on the digital planet where you can get that.”
Though more consumers increasingly shop online, Ben-Itzhak said they crave the product engagement they experience in physical stores — a gap in online shopping that social commerce attempts to fill. And while the shopping experience on traditional e-commerce sites has hardly changed since its inception, the same cannot be said for social media, he said.
“The experience on Amazon is the same as Amazon from 1999. It’s not the same Facebook from 2006,” Ben-Itzhak said. “The velocity of adding new experiences, which get people traction and get them excited, is [a] … differentiator of social over your own e-commerce site, which no matter how beautiful it is, it’s mostly static.”
Brands seem to recognize that too, as they increasingly form partnerships with social platforms where consumers spend their downtime.
Facebook recently concluded a summer livestream shopping series featuring brands like Sephora, Bobbi Brown Cosmetics and Abercrombie & Fitch. Walmart has partnered with TikTok twice on livestreaming events with popular creators on the app as the hosts.
Snapchat and Pinterest, on the other hand, have both been banking on the success of AR try-on tools. The technology, which was used by brands like Gucci, Urban Decay and YSL, emulated an in-store experience and minimized returns when the pandemic pushed stores to close fitting rooms and beauty retailers to take samples off shelves.
Social media “has become the form of communication for the brands to be able to create the right dialogue,” said Marshal Cohen, chief retail analyst at the NPD Group. “Retailers, they would sit there and say what the product was, they would say where it was made, they would tell you the size, they would say how much the price is, but they didn’t romance the product.”
Retailers’ investments in these partnerships appear to yield results, according to a recent report from NPD.
A little over half (51%) of consumers surveyed in NPD’s fashion apparel report said the content they saw on their Facebook and Instagram feed resulted in a purchase. The top platforms where consumers learn about brands were Facebook (41%), Instagram (35%) and Pinterest (21%). “Popularity plays a big role,” Cohen said in response to why some social platforms ranked higher than others.
While only 15% of respondents on NPD’s report go to TikTok to discover brands and items, the platform has gained a reputation for making products go viral in recent years. The hashtag #TikTokMadeMeBuyIt on the app currently has around 4 billion views.
Still, social commerce has a long way to go. (Source: retaildive.com)