Instagram Checkout: A short analysis

03 May 2019

In March earlier this year, Instagram added a new feature to its shopping suite called Instagram Checkout. This new in-app feature, which is currently only available in the U.S., allows users to complete a purchase without leaving the social media platform, in literally a few taps of the finger. 

Although Instagram shopping already exists on the social media channel, Instagram Checkout offers an even smoother end-to-end conversion journey for its users, who, after entering their personal and payment details just once, will only ever be two or three taps away from ordering beauty products, gym wear and more! Instagram has initially launched this trial in the U.S. with 23 e-commerce brands including, Kylie Cosmetics, Adidas and Huda Beauty. With Instagram reporting 130 million taps on shopping products and 2 million users per month, this could be a game-changer for not only the landscape of Instagram and social media marketing but e-commerce too. This article is going to look at the possible effects that Instagram checkout may have, on the retailers and the users of Instagram.

Accommodating the needs of modern social media users:

Instagram checkout accommodates the needs of young modern people by offering speed and convenience to the mobile shopping process. The fast pace of contemporary life for many people means that some don’t have the patience or time to actually shop on their smartphone because it can be inconvenient to browse on a small screen as well as enter payment and shipping information. Instagram checkout removes these inconvenient steps from the process, allowing shoppers to checkout with ease, in a few taps of the finger. This could lead to higher conversion rates for retailers because often at many stages people abandon their mobile shopping journey when the steps become too much of a ‘hassle’. Moreover, the convenience doesn’t just end at staying within the app to finish the conversion, but Instagram will store the users’ payment and shipping information after the first time the user checks out, and all delivery updates are kept within the app too, meaning users won’t have to trawl through their email inboxes to find out when their delivery is arriving. If it proves successful, Instagrammers could find themselves spending a lot more money than they had planned!

Capturing the audience at the right time

Research shows that 40% of users click on ads when they see something that happens to interest them and 55% of consumers are already making purchases through social media channels. Another 50% of people surveyed said that they were influenced to buy something through social media, suggesting that Instagram checkout may appeal to a highly engaged audience who are already open to social media shopping. With the added ease of the process, we could see Instagram shopping figures soar.

Furthermore, Instagram is the home of ‘influencers’ and affiliate marketing, as well as a platform where many share aspirational photos with their friends and followers. Targeting an audience when they are at their most influenced with the temptation of a quick buying process could also be a game changer in the market. Instagram may need to think about how these posts which have checkout enabled can be personalised to attract Instagram users even more.

How will Instagram checkout work with influencers?

Instagram is already a hugely popular site for advertising, both directly and through the use of influencers and brand ambassadors, who have very large followings. How might Instagram look to extend the checkout feature to influencers’ posts who share URLs and discount codes to the company’s products? Currently, Instagram has only chosen to partner with a select few brands. The convenience of Instagram checkout could leave influencers by the wayside, as the smooth checkout process versus finding an item recommended by an influencer, adding it to basket, and filling out payment/shipping information may seem too inconvenient compared.

Further consumer insight

Instagram checkout will give Instagram further insight into consumer behaviour which may allow them to improve their (re)targeting campaigns. However, this information won’t be shared with the retailers themselves, and Instagram ‘checkouters’ can decide on whether they even want to share their email address with the brand they are buying from. For retailers, there may be limited user data available for them to improve their own marketing campaigns outside of Instagram – so retailers may be missing out on gathering purchase data which is key to any digital marketing campaign.

How else might the retailers be missing out?

Instagram Checkout partnered e-commerce brands may find themselves missing out on further opportunities. Currently, the feature only allows retailers to showcase a small inventory of products, meaning brands will have to pick very carefully which they choose to offer to Instagram buyers. Furthermore, Instagram checkout is only allowing users to buy one item at a time. All of these elements may have a negative impact on the retailers, as they could be missing out on impulse buys, opportunities to advertise further products, and a whole lot of website traffic. If Instagram is stealing or compromising the retailer’s own website traffic then impressions may decrease and potentially, the opportunities to promote brand awareness. However, if Checkout offers promising ROI to retailers then some loss of website traffic may be well worth it.

Not more ads?

Research shows that users already think they are seeing too many ads online. Although Instagram checkout is technically only being added to organic posts for now, users may still perceive these posts as adverts. However, a large percentage of people actually believe that they don’t hate ads in general, just bad ones which don’t resonate with them. With this in mind, Instagram retailers will really need to consider how personalisation could help in the future if Instagram checkout is extended to sponsored posts.

What next?

At the moment, the shopping feature is being trialled on a fairly small scale. How will Instagram decide on which brands to offer this to next? How will they choose fairly and will they be able to monitor who uses the checkout feature? Unfortunately, there are some brands that may not be as reputable on Instagram as others already using Instagram shopping, and Instagram may not want to extend the feature out to every e-commerce retailer with an Instagram account. Additionally, this feature will only work for products which don’t need much consideration and probably already have a good reputation amongst Instagram users or influencers. Lifestyle and aspirational brands will currently work, but could Instagram shopping extend to purchasing flights, holidays or even cars? With this said, could Instagram checkout completely eliminate the ‘consideration’ phase of online purchases, as it is pitched as an impulsive quick decision purchase.

Conclusion

Conclusively, Instagram Checkout seems to have cracked the market by offering the ultimate smooth mobile shopping purchase journey. Although there may be drawbacks for retailers in terms of impressions and website traffic, if overall ROI is increased then it may be worth it for them. It is also very beneficial for spreading their brand further throughout Instagram, a social media platform which is only getting bigger and even more popular. Although Instagram hasn’t made any sales figures available yet, it seems that this could be a highly successful venture for both the social media platform and the retailers, and I think it won’t be long before we see the feature extended across the pond to the UK, and made available to a whole host of other online retailers.

Written by Alice Pelham

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