As Meta Exits, Can Amazon, Google and Reddit Get Social Commerce Right?

The realm of social commerce is undergoing remarkable advancements with key players such as Google, Amazon and Reddit venturing into the trend of integrating eCommerce within their platforms. But what does that mean for the state of social commerce? Particularly in light of Meta’s influential role in shaping the concept of monetizing products in a social setting, and its subsequent exit from the scene.

From Google’s Perspective

Google’s latest addition to its search capabilities is Perspectives. As part of a suite of AI-based tools, Perspectives aims to augment search results for various subjects including shopping, travel and how-to advice.

Google’s integration of influencer content alongside traditional search results demonstrates its recognition of the enduring influence and importance of influencers in shaping consumer decisions and aligns with Google’s continued commitment to fulfilling the specific information requirements of its users.

While text-based results may suffice for certain inquiries, the desires of tech-savvy millennials and digitally native Gen Z users, who are well-versed in social media, often go beyond written content. With that, both cohorts are more inclined to search for videos that provide product comparisons, or vlogs.

Google’s incorporation of videos and influencer content into its search results is a clear reaction to the growing prominence of TikTok. TikTok has emerged as the platform of choice for young users and has even become a de facto search engine for many. Notably, TikTok has recently enabled brands to directly showcase and sell their products through videos, a strategy that has achieved success in markets such as Singapore.

Amazon’s Inspiration-Led Feed

In 2022, PYMNTS reported that Amazon was in the process of testing a new app feature that displays customers a feed of videos and photos showcasing products, resembling the format popularized by TikTok.

See also: Amazon Hopes to ‘Inspire’ Consumers to Shop TikTok-Style

During the announcement, it was observed that livestream shopping had not gained the same level of popularity in the U.S. as it had in China. However, Amazon expressed its intention to rectify this by attracting influencers to promote products on its platform.

In an interview with the Financial Times, Amazon Vice President of Advertising Wayne Purboo emphasized that livestream shopping represents the future of retail. Purboo is responsible for overseeing Amazon Live, the tech giant’s interactive live video shopping feature.

Fast forward almost a year later, Amazon’s TikTok-like Inspire shopping feed is now available to all customers in the U.S. As per the information on Amazon’s website, the feature was initially introduced to a limited number of U.S. customers in December, following Amazon’s earlier experimentation with a TikTok-like shopping feed during the previous summer.

With the introduction of the new short-form video and photo feed, consumers can now delve into products, ideas, and shop directly from content generated by influencers, brands and fellow customers.

Unlike TikTok, Amazon takes a different approach by placing a strong emphasis on promoting products. While people use social media platforms not just for shopping inspiration but also to seek information and entertainment, Amazon’s main focus is on integrating short-form videos as a means of engagement.

Reddit’s Foray

Reddit’s recent job postings, featuring positions like “senior commerce and measurement partnerships manager,” highlight the platform’s intent to make a substantial entry into social commerce.

Although Reddit’s foray into social commerce may appear ambitious, the platform has been laying the groundwork for this capability since 2017. It initiated its journey by introducing its first conversion pixel.

Alex Hamilton, head of innovation at Dentsu Creative, told Digiday, “Reddit might not have the product-centric positioning like Pinterest, or the inspiration focus of an Instagram, but if brands can serve Reddit users and communities through great content and recommendations, it might just be successful in its social commerce push.”

Over the past few months, Reddit has introduced a new automated bidding strategy called Maximize Conversions. The objective of this strategy is to enable advertisers on Reddit to fine-tune their campaigns for optimal conversions. By maximizing the number of conversions while maintaining a predefined cost-per-click (CPC) limit, advertisers can effectively enhance their campaign performance and strive for the highest possible conversion rates on the platform.

Furthermore, Reddit has also reportedly introduced its eCommerce product offering, although it is still in its early stages of development.

If social commerce can offer a more sustainable source of revenue for Reddit and drive its growth to new heights, it has the potential to significantly enhance the platform’s valuation and help prepare for its initial public offering (IPO), now scheduled for the second half of 2023. In December 2021, Reddit began the process of initiating an IPO, but due to the absence of profitability at that time, the listing was subsequently postponed.

According to reports, Reddit boasts a substantial and vibrant user base with over 500 million monthly active users and over 100,000 active communities.

Facebook/Instagram’s Exit

As Amazon, Reddit, and Google make announcements about their efforts to enhance the social commerce landscape, Meta, the company known for driving the success of Instagram influencers in a lucrative multibillion-dollar industry, has made its departure.

Instagram, under Meta’s ownership, played a pioneering role in capturing users’ attention online through visually appealing photos and videos to drive purchasing decisions. In 2020, Instagram’s Shop Tab, a dedicated section for shoppable content, held a prominent position on the home feed, providing users with a convenient in-app purchasing experience. However, in January, it was no longer given the same prominent placement and was removed from the spotlight.

Shortly after, the platform decided to discontinue live shopping, stating Meta’s intention to prioritize products and features that deliver the highest value to users. This shift in strategy reflected Meta’s focus on enhancing user experience and offering valuable features on the platform.

At this time, Meta Platforms is emphasizing cost-reduction initiatives and directing its attention towards projects that yield substantial returns on investment. Consequently, social commerce, which previously played a pivotal role in the company’s growth, has been deprioritized. The shift in priorities can be attributed to CEO Mark Zuckerberg, who is directing his attention towards AI advancements and the development of the virtual reality-based metaverse.

See also: Meta Says Generative AI and the Metaverse Will Evolve Together

State of Social Commerce

Despite their ambitions, major platforms such as Facebook, Instagram, and TikTok have encountered difficulties in achieving successful implementation of social commerce. As a result, some platforms have chosen to completely withdraw from the experience, while others have taken a step back to reassess their strategies. Recently, TikTok reportedly halted the launch of its U.S. shopping platform due to concerns about a potential ban.

Companies in various industries are prioritizing short-term investments that have a higher likelihood of quickly converting consumers, rather than focusing on long-term strategies.