What Meta’s move away from Instagram Shopping means for retailers


ortantly, with users. It started with Facebook Shop, which was launched in 2015. No, I haven’t bought anything via Facebook Shop either. Of all the retailers I’ve worked with, I’ve never seen it come up as a channel of importance. 

In light of this, Facebook’s recent announcement that it is rolling back its shopping features on Instagram and making its “new north star…more directly tied to advertising revenue for Meta” isn’t surprising. But since when have Fortune 100 companies rested on their laurels? It’s doubly surprising given Facebook’s advertising-led second-quarter earnings showed its first-ever revenue decline, largely due to its ongoing quarrels with Apple, and Apple isn’t backing down. 

Owning the experience from discovery to transaction would be, if Meta cracked it, highly lucrative. It would certainly be a great way to diversify the company’s income and reduce its dependence on advertising – and on the data that drives advertising in a world where the pipelines of data gold are slowly shutting down (see: quarrel with Apple, amongst others). 

Asian model hasn’t soared in the West

When Mark Zuckerberg and his Metamates first introduced shopping features on Instagram, they were no doubt eyeing the end-to-end experience of Tencent’s ubiquitous WeChat. There are some key differences though. The Asian market seems to have steered towards mega all-in-one apps. As I write this, I’m on a work trip in Asia, and a recent coffee with a start-up CEO here led to an interesting discussion about the app landscape. “So many people are trying to do everything, I don’t know which app to use,” the CEO said.

In the West, we seem to value diversity in services (despite the best efforts of Amazon, Uber, Meta, et al). Whether that’s for cultural or legacy business reasons, I’m not clear. But I think it’s a good thing for retailers to retain more control over their customer, rather than handing it over to a single entity with a power imbalance against the retailer. 

What’s even stranger is how this affects Meta’s move into the metaverse. While no one is clear what this will look like, any reasonably monetised metaverse would have shopping or shoppable features in it. You would think Meta would be pushing its shopping capabilities harder to get retailers on board and have the data to build some sort of virtual shopping mall, or another use I can’t yet imagine. Virtual sneakers for your avatar are all well and good, but, in all but the most dystopian future, I can’t see a world in which retail sales of virtual items exceed those of physical. Will Meta limit itself to just advertising in this new universe?

Meta’s value proposition in shopping has been thin on both sides of the equation. On the seller side, we’ve become used to having control over the customer experience, and the ability to tell our brand stories, build niche-specific tools and content, and have ownership of customer data. On the customer side, Meta lacks the comparison shopping and delivery experience of Amazon, and also the brand experience of the retailer. And on Instagram, there’s no ability to transact. 

This is challenging, as Meta also doesn’t have the experience-smoothing payment details of most customers, unlike WeChat, which is doing about a billion transactions a day, or Google and Apple, whose app stores collect payment details. The failure of Meta’s Diem/Libra stablecoin hasn’t helped on this front.

Ultimately better for retailers

Or maybe Meta is a victim of its own success? Many retailers have relied so heavily on Meta products to drive eager customers to their stores, perhaps they’ve been reluctant to direct them to an in-platform shop that risks killing the golden goose and, if successful, would undoubtedly lead in time to a bigger clip of the ticket by Meta. 

Overall, Meta’s rollback of its shopping features is a positive thing for retailers. Getting online is easier than ever in a world of Shopify and Square, and we don’t need to be any more dependent than we already are on a few concentrated platforms. As much as centralisation makes life simpler, I prefer suppliers to have less power, not more. 

All in all, I’m a bit perplexed by Meta’s move. Perhaps the tech giant has simply learnt the lesson of Captain Ahab, who died in pursuit of the white whale, and is leaving it alone.


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