It shortens the path from seeing to buying. Instead of watching an ad, opening a store and searching for the item, the viewer taps the product in the video. Social shops such as TikTok Shop, Instagram and YouTube support it, and many online stores add shoppable clips to product and collection pages.
The catch is supply. Tagging works best when every product has its own clip, and few brands film every SKU. Short clips made from existing product photos, explained under image-to-video, are how most catalogues get there.