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Social media looms large in ecommerce, and will continue to do so as long as platforms gather audiences that prove to be interested in finding new products as they scroll and like content.
Yet as online shopping and social networks evolve, a key question remains: Will social media remain primarily a place where consumers find new products through advertising and placements, or will it continue to evolve into the singular place where people shop and buy goods, as well?
That question gained new relevance this week as details emerged on how Instagram is making big changes to its shopping strategy. According to The Information, Instagram plans to remove its existing Shop page due to what an internal memo called “shifts in company priorities.” It will also eventually remove the homepage button that directs users to the Shop page. These moves are part of a wider social commerce pullback. Per The Information, other features being shelved include “creator commerce” within Instagram shopping, a “Friends & Family Shopping” section, community-driven shopping projects, and visual search. It also shut down an affiliate commerce program that enabled creators to earn commissions from product tags in favor of a Creator Marketplace that connects brands and creators.
\u201cScoop: Instagram will remove its existing Shop page as it tests a simpler version called "Tab Lite." It's also testing removing the button that directs users to shops, with tentative plans to scrap the button altogether next March. https://t.co/s64iRkUSmP\u201d— Sylvia Varnham O\u2019Regan (@Sylvia Varnham O\u2019Regan) 1662497501
The Information reports that a “new northstar” for Instagram’s commerce organization will tie it more directly to advertising revenue. Instagram is not abandoning all shopping, but it will now test have a “simpler and less personalized” feature dubbed “Tab Lite” that is being introduced publicly this week.
Still, the moves are a product-level outgrowth of a strategic change taking place at Meta, which owns Instagram. As The Information notes, “The shopping shift is a major reversal for CEO Mark Zuckerberg, who over the past two years had made it a top priority to turn the Facebook and Instagram apps into shopping destinations, in part to help Meta replace the data lost as a result of Apple’s steps to curb ad tracking.”
Instagram has played an outsized role in ecommerce. Its visually-focused layout made it an ideal place to sell products, and that was accomplished in spades not only through ads, but also as brands worked with influencers to showcase their apparel in vibrant settings, or display their home goods in stylish abodes. By giving up-and-coming brands the ability to get their products into the posts of users with massive followings, Instagram proved to be a particularly potent channel for direct-to-consumer startups.
This role puts Instagram at a distinct place in the shopping journey: It is first and foremost a place to find out about products, with the potential for discovery embedded within the experience itself. The actual checkout was mostly taking place on a brand’s own Shopify store. Yet, all along, Instagram has been working to move more of the process within its app. It has tested and launched features that enabled a more active form of shopping, going beyond discovery. Recently, The Current shared a timeline of some of the features that have rolled out:
- Shopping Stickers: When Instagram debuted Stories, shopping became a part of the feature in 2018 in the form of stickers that allowed users to tap for more details about a product.
- Checkout: In 2019, Instagram introduced tools that enabled users to make a purchase without leaving the app.
- Shopping on Instagram: In 2020, Instagram rolled out full-screen storefronts where brands could present products, as well as tell their stories. This was an upgrade to a shopping feature that Instagram initially experimented with in 2016, in which brands could add shoppable photo tags.
- Going live: With a shop up and running, Instagram then rolled out additional features for brands to reach users. This included the capability to create a collection of products to be featured in live shopping events and Drops to showcase new releases. It also added a “view product” button to Reels that allowed shopping in its short-form video content.
- Product tagging for all: Earlier in 2022, Instagram opened up product tagging that was long available to brands and creators to anyone using the platform.
The Shopping page that is now set to be shuttered was introduced in 2020 to provide dedicated space to browse products and receive personalized recommendations from multiple brands. The Shop tab followed in a matter of months, giving ecommerce space on Instagram’s home screen at a time when online shopping was skyrocketing due to the stay-at-home orders of the pandemic. With the introduction of Facebook Pay (now Meta Pay) on Instagram around the same time, the company sought to provide checkout tools, as well. As Apple’s App Tracking Transparency took hold in 2021, there was even more incentive for Meta to create a complete shopping experience within its apps. It could make Instagram a destination for shopping, further owning the relationship with the user, which would in turn provide access to the very telling checkout data that resulted from transactions that could be used to restart its advertising engine.
The latest shift at Instagram, however, indicates that Meta no longer sees that as the most prudent path. Shopping will exist as part of advertising, not its own function altogether.
To be sure, the move must be viewed in the context of Meta’s wider performance. The company reported its first revenue decline since going public in the second quarter of 2022, and executives have talked about how a combination of macroeconomic forces, the fallout from ATT and the rise of TikTok have brought challenges. Tough times have a way of crystallizing priorities, and in this downturn it appears that Meta is returning to a focus on advertising – the user data-fueled engine that made it a business juggernaut in the first place.
Where that leaves Meta’s approach to social commerce, however, is another question. The Information’s report indicates that Instagram isn’t abandoning shopping, but it’s less clear what role it will play on the platform. ATT throws a big wrench in the engine of Meta's ecommerce-centered performance marketing prowess, as attributing a sale made on a Shopify store to an ad on Instagram is rendered more difficult. Meanwhile, Instagram just recently rolled out a new feature that allows purchases to be made through direct messages. That indicates it is still looking to provide checkout, even though the path to get there is less obvious.
The Instagram roadmap as a whole seems to be in rebuild mode, as well. In July, users – including the mega-influencers in the Kardashian family – effectively vetoed a new version of the app that prioritized videos recommended via algorithm on its homescreen. Announcing an end to the pilot, Instagram head Adam Mosseri said, “We definitely need to take a big step back and regroup.”
Facebook could be a source of hints for what's to come at times like these, but the shopping path is no clearer at Meta's other big social property. Facebook said it is ending its live shopping feature in October. For many, it was a sign that making social commerce wouldn't be as easy as bringing what worked in China to the West.
Even if social commerce is being reconfigured on Meta, it's not being abandoned by platforms altogether. There are plenty of other experiments happening across social platforms. After all, most of the big social media platforms are launching pilots that incorporate more commerce, and many have hinted that they would like to create shoppable platforms. Twitter and YouTube both recently partnered with Shopify, with the latter creating shoppable "shelves" that appear in the same frame as a video. Pinterest is staking its future on becoming the home of "taste-driven commerce," and is rolling out a host of new features to put that into action following the acquisition of The YES. Snapchat is centering its ecommerce efforts on virtual try-ons through augmented reality, though that platform is also going through a reckoning as it faces financial struggles. Even Instacart is incorporating shoppable content that is designed to inspire through the recently-launched Carts.
As Instagram looks to retool, the best place to look for hints of what is to come may be TikTok. Like Snapchat before it, the short-form video app has spread like wildfire with the younger generation, and seems to be the focal point of Meta as it looks to update itself for current social media trends. Instagram's short-form video format, Reels, is very similar to TikTok’s format, and one can easily draw a direct line between the algorithmic recommendations from users outside one’s own circle that Instagram shelved and TikTok’s “For You”-centered discovery engine.
When it comes to social commerce, however, TikTok is on its own winding path, having recently back-burnered an expansion of live shopping in the US and Europe after it failed to gain traction. But brands are gaining a presence on the app nonetheless. Product discovery is already a primary use of the app, with #TikTokMadeMeBuyIt and viral moments integrating shopping culture into the app, even if in-stream checkout hasn't taken hold.
Rather than livestreams and homescreen tabs, the better lesson for Instagram may be from TikTok’s new ad formats. As The Current reported, the video and catalog ads were designed to live in-stream, not hold their own distinct real estate. Yet they link to product pages within TikTok, as opposed to directing a user offsite to another store. From our past report:
This has created an environment where [TikTok] can embed advertising into the experience. Intent to buy functions as an outgrowth of a user’s interests – another indicator that can be included in the algorithm. Delivered via short-form video, many TikTok ads look like any other content on the platform. TikTok hopes that entertaining you will lead you to buy, and has the path in place. The popularity of the #TikTokMadeMeBuyIt hashtag shows that there is also a high likelihood that users will let people know about their purchases, helping products become even more deeply enmeshed in the experience.
To adopt this type of approach, Instagram would need to pay more attention to another side of TikTok’s success that goes beyond form and function: It has created a place where users find content that they like, and make discoveries based on what is served to them. It is about tapping into users' interests, and even delivering moments of joy. This actually fits well with Instagram, as creating moments of discovery was already a strength of the social network's experience. As the episode with the Kardashians shows, Instagram's work appears to lie in the task of bringing change to the overall experience of the app in a way that doesn't alienate users who already love the app.
A social media feed doesn’t need a Shop to have shopping. Make it easy to find products as part of the overall app experience, and users are more likely to happen upon something they didn’t know they wanted. Delight them, and they might not even care too much when something changes.
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At the NRF Big Show, the consumer electronics brand offered a look at devices and displays designed for the store experience.
We're taught that enterprise and consumer are different. They require different approaches to market, and the features required can vary depending on the specific needs. Yet there are a number of elements that are constant across these segments. Operating in both, and there are advantages learned from expertise in one area that can be applied to another.
This came to light inside Samsung booth at the 2023 NRF Big Show.
Think of Samsung, and consumer smartphones and TVs may come to mind. None of that was on display in New York, however.
The company’s booth offered a look at the technology and systems that the electronics brand provides for retailers.
Joe Hasenzahl, director of sales for B2B mobility for retail at Samsung Electronics America, demonstrated several of the features of Samsung’s enterprise devices for retail associates.
In-store mobility devices look like a smartphone, but they are a “ruggedized” and have distinct features. There are swappable batteries. They can survive a fall on concrete, and can be submerged in water for 30 minutes. Plus, there is a big screen, built-in software to take contactless payment and additional device security. While a consumer phone may have a few communication functions, this one is designed to be a whiteboard, walkie talkie, payment processor, point of sale and training device all in one.
“Nobody in retail has one job, and neither does your device,” Hasenzahl said. “It's got to be able to do everything because retail has set that dynamic.”
Digital displays show social media. (Courtesy photo)
But break down what the associate wants from a device, and plenty of similarities with consumer technology start to emerge. People want information that they need to function available at their fingertips, and the phone provides that with scheduling and workflow tools. They want to have peer-to-peer communication. The voice activation provides that, and they can use the phone to talk, as it was originally intended.
Hasenzahl said Samsung's approach to designing for the user comes down to three questions: Who is the brand talking to? It may be a customer and it may be an associate. Where is that person? They may be on their couch or in a store. Finally, what is the messaging opportunity?
“It's everywhere from their own personal mobile device, to a device given to an associate in a retail environment by that retailer, all the way up to billboards in Times Square,” Hasenzahl said.
In the end, associates and customers are all people. They want many of the same things.
“We understand how consumers are using mobility and recognizing that there's not a substantial difference between what associates demand and what consumers demand, leaving them with a device that's natural for them, but still designed for the enterprise,” Hasenzahl said.
Display drives an ecosystem.
A display at Samsung's NRF booth. (Courtesy photo)
It’s also worth remembering that consumers have devices when they enter a store, just like associates do.
That insight is helping to inform Samsung’s work on an in-store ecosystem that includes digital signage, sensors, kiosks, a shopper’s device and software to connect and power the whole experience.
Working with technology partners, Samsung is leveraging this connected system to analyze shopper behavior in a store.
The journey starts like this: A shopper may see a sign outside a store, and walk in. When they do, a sensor picks up the signal, and the phone flips over to an in-store mode. This switch doesn’t require a user to opt in, but data is anonymized.
Just like with a website, the system can analyze where a shopper is, how long they spent inside and other key information.
“Here's what we learned from our signage: Analytics are great by themselves, but when you connect them to our signage, it's like peanut butter and jelly put together,” said Parrish Chapman, director of enterprise retail sales at Samsung. “We now can have an action and change that action during the buyer journey…We know when you come in, where the device is traveling, how long you're in every zone. This allows us to automatically change content on the digital signage in the store."
A kiosk in Samsung's retail division. (Courtesy photo)
Additional information can be positioned throughout the store, whether it is on kiosks or relevant social media posts on digital displays through a partnership with Sprinklr. The idea is to offer a host of options that meet preferences and needs of a particular shopping trip.
“Customers are picking how they interact with the technology instead of us telling them,” Chapman said.
Samsung's capabilities can also elevate the sensory experience. The booth included an aroma associated with a cafe and sound triggers through technology from Samsung brands Harman, MagicINFO and Blueforce Development.
While the additional features may lead some to hear the sound of bills ringing up higher and higher, Chapman said this technology can be subsidized in part through advertising. The Samsung Ads network provides digital out-of-home advertising. For retailers, ads could appear on EV charging stations, or in-store displays.
While there are many different offerings, Chapman said the company aims to be “consultative” in its approach, learning both about what the retailer wants and the funding approach. It starts with a display and builds out. Ultimately Samsung wants to make it easier to access this technology and offer flexibility to adopt what fits best. It has established partnerships so that retailers don’t have to work with a multitude of vendors, or even allow Samsung direct network access.
“There is a lot of data out there, and people are overwhelmed,” Chapman said. “We're trying to simplify that equation and show the impact of physical retail with our displays and our ecosystem to help them run their business.”
Just like the consumer and the associate, the retailer also wants an easy-to-use system that makes information available, and helps them perform key functions in as few steps as possible.