Instagram: The Growing eCommerce Giant
What originally started as a simple social media platform, has evolved into a digital powerhouse that drives revenue for virtually every brand and business. Whether you’re Nike, Adidas, a local bodega or thrift shop, Instagram has given a voice to all brands and merchants looking to connect with their audiences in effective and authentic ways. The result of this cannot be overlooked, for it would be foolish to ignore the reality of this major transition in eCommerce.
Instagram took another major leap forward this week with the announcement of their Checkout function.
In previous iterations, merchants had the ability to connect their catalog directly to their Instagram profile and tag products in a post. From there, users were directed to the merchant’s site through the platform. This move introduced Instagram to the world of eCommerce (even though Facebook had been doing so for a while) and brands took off with it. Before you knew it, you couldn’t help but see more ads targeted at your own interests, then you’d blink, and you were on their site clicking the purchase button.
In typical Instagram fashion, they hit us with another feature that could change the way that eCommerce merchants strategize their content on the platform. Here are 3 main takeaways from the new Instagram Checkout feature:
eCommerce Everywhere
This new Checkout takes eCommerce everywhere. Similar to the headless systems that many Shopify merchants are moving toward, Instagram will give users the ability to make purchases at their convenience without having to be on a desktop or mobile device directly connected to merchant’s storefront. Further, this function’s simplicity gives customers the ability to process purchases at a faster rate, consolidate their payment information, and receive purchase updates all in one place. As a result, this streamlines the process and makes the overall experience seamless—which every customer is craving.
As most eCommerce merchants know, the customer experience is the most critical component to retaining customers and creating a relationship with your digital audience. For the last five years, Instagram has been the place where those brands can connect directly with their consumers and insert themselves into niche audiences. This new platform feature furthers this approach, giving brands the ability to meets customers where they are, not where they want to go. Rather than clicking from site to site, plugging in information, and handling separate purchases on each merchant’s site, this function houses it altogether—almost like a “Social Walmart”.
A Catalyst for Brand Affinity
Separate from the actual implementation of this feature, there are some strategic effects that this has on the way that merchants can approach their audiences. Using the Checkout feature as a funnel toward the brand, it encourages that initial purchase from customers, with little to no effort on their end. Again, tapping into the simple customer experience. From there, the brand has introduced itself to customers and can begin to target each one more directly by pushing them to the actual site which has a more tailored setup.
MVMT does a great job of this with their “See Fit” capability, where customers can select a watch, then see how it would look in a first-person window, which provides specs about the product itself.
For now, this Checkout feature has been rolled out to exclusive brands such as Adidas, Kylie Cosmetics, and Warby Parker, but in time many smaller brands could find their way into the mix. Outside of its functionality, this feature presents the opportunity for brands to introduce themselves to consumers on a basic level, and communicate their niche site features over time. It is these types of experiences that improve top level conversion and deepen the relationship between customers and merchants.
There Could Be Drawbacks
For all of the solutions and positives that this feature provides there might be some potential drawbacks. The first of these is quite obvious, the payment information. The technological surge over the last five years has brought with it a variety of concerns around privacy, with juggernauts like Facebook taking shots from its users and the government. Though this feature is simple, it poses the question of, “is it too simple” and if so, could my private information be at risk? For some users, this question alone could deter them from purchasing directly on Instagram.
In the same vein, it brings into question the debated topic of microtransactions and their potential effect on consumers. Microtransactions are prominent in the gaming industry, where users can purchase in-game packages that add to their gaming experience. These transactions can be as little as $1 or larger than $20 but come at the risk of teenagers and even children having control over bank accounts that aren’t theirs. The gaming powerhouse Fornite has taken backlash for this over the last year with some customers expressing a strong dislike for what they call shady billing practices. Though this could present problems, Instagram has partnered with trusted payment systems such as PayPal to handle the transactions that occur on the application.
Instagram has yet to release more details about the Checkout feature, such as merchant fees and data collection, but brands are going to roll it out over the coming weeks. As it continues to pick up speed, it will be interesting to see what effect it has on the eCommerce world.
