- In late 2021, industry insiders predicted that 2022 would be the year of social shopping in the US.
- Social media platforms launched a number of new shopping features for creators and brands.
- But over halfway through the year, platforms have had mixed reactions to their efforts.
2022 was supposed to be the year of social shopping in the US.
Platforms from Instagram to Pinterest revamped and added features like in-app storefronts, native affiliate-marketing tools, and live-shopping tech in the hope of becoming America’s new shopping malls. Some industry insiders predicted these bets would pay off, with eMarketer forecasting 24.9% year-over-year growth in US social commerce, bringing the market from $36.6 billion to $45.7 billion.
But over halfway through the year, platforms have had mixed reactions from creators, marketers, and consumers.
Advertisers on TikTok and YouTube told Insider that shopping tools have yet to convert into meaningful sales, and some influencers testing Amazon’s live-shopping feature — several of whom are ditching it altogether — said they struggled to find an audience on the platform.
In July, Instagram pivoted away from certain native social-shopping features. Meta told Insider that it was “ending the current test” of its native affiliate-marketing program that paid creators a commission for sales driven within the Instagram platform.
And TikTok’s experiment with shopping in the UK fell apart earlier this year after the company reportedly set unrealistic sales targets, raising into question whether it will be able to pull off ecommerce in the US, according to a June Financial Times report.
But the problem may go beyond any platform and features — creators and consumers in the US may just not be ready for social shopping.
“Consumers are not thinking, ‘I will go on TikTok in order to make a social commerce purchase,'” Ian Whittaker, managing director of the media consultancy Liberty Sky Advisors, said.
While 45% of consumers say social media influences their shopping, only 11% have purchased directly through social media, according to a May 2022 McKinsey report.
“The industry is trying to run before it can walk,” said Sarah Penny, content and research director at influencer-marketing platform Influencer Intelligence. “It’s still quite alien to a lot of audiences.”
US tech platforms want to replicate social shopping success in Asia
The concept of using social media to shop isn’t new.
For years, upstarts such as LTK (formerly RewardStyle) and MagicLinks have been in the social-shopping game, primarily through affiliate programs that pay creators commissions based on the sales that they drive via posts on social media.
More recently, platforms like Instagram and TikTok have made moves to own the shopping process by adding integrated checkout functions, product tagging, and other ecommerce tools.
They are all hoping to replicate the success of tech companies in China and Southeast Asia, where social shopping accounted for nearly half of the $109 billion ecommerce market in 2020, and to poach business from startups in the space.
Getting a cut of ecommerce sales could also be key for companies like Meta Platforms whose ad businesses have taken hits in the wake of Apple iOS privacy changes.
Social platforms are hungry for shoppers, but US consumers aren’t showing up yet
While social shopping is still in its infancy in the US and consumer appetite could shift in the coming years, platforms face a series of headwinds as they look to bring in-app purchases into the mainstream, experts told Insider.
One reason is the technology, itself, which is different in Asia and in the US. Chinese consumers are used to single apps like WeChat, sometimes referred to as “super apps,” that allow users to perform a variety of tasks like sending messages, ordering food, and hailing cars.
Execs at companies like Snapchat-maker Snap Inc. have expressed interest in building super apps, and Instagram’s former director of product for Instagram Shopping told Insider in November 2021 that the company wanted to build “an ecosystem, versus a feature.”
But US tech companies have yet to build a super app, which may be holding them back in social shopping.
“Consumers in Western markets, when they want to buy something, they think about specialized sites,” Whittaker said. “In places like Russia and China, they’re more accustomed to actually buying all their needs through one particular social site.”
US consumers’ willingness to hand over payment information to big tech platforms, some of which have faltered in protecting user data in the past, could be another hurdle.
“There’s still lots of people who don’t want their credit cards stored online in multiple places,” marketing strategist Sonia Elyss said.
Plus, the growth of ecommerce in the US during the height of the pandemic created unrealistic expectations for social shopping.
According to the McKinsey report, in-store shopping saw 8% year-over-year growth in March 2022, compared with approximately 5% in early 2021. Meanwhile, ecommerce growth has fallen since the height of the pandemic.
“Not as many people are going to be flooding to shop [online] as we may have wanted when we were mid-pandemic and seeing how many people were shopping from home,” Elyss said. “Now we’re just in a completely different economic climate, and I think that’s what has slowed the development of this a lot.”
Advertisers, for their part, are waiting for more widespread adoption before they buy into the trend. Some pointed to the fact that the majority of the social shopping tools have only recently launched or are still being built or tested.
This is true of most platforms, like YouTube, where certain existing shopping features are only available to a closed group of creators, and TikTok, which is testing a dedicated “Shop” tab in select markets, but not the US.
Those advertisers who have tested social shopping tools said they haven’t been able to prove the tools are driving sales yet, making them hesitant to spend more money there.
For creators, the integration of social shopping tools is helpful, but some are worried that the increased focus on shopping will alienate their audiences.
Anna Crollman, a creator and blogger, said that there is a frustration that comes with creators being perceived as sellers.
“You are constantly recommending, you are constantly saying ‘Buy, buy, buy,'” she said. “Sometimes I don’t want there to be a link, I don’t want people to buy something, I just want you to feel good and get a resource.”
Insider spoke to 25 marketers, brands, and creators to hear their thoughts on social shopping.
Here is what features platforms have introduced in 2022, and how industry insiders are reacting. The platforms are listed in alphabetical order.