Will Instagram Shopping Take Off?

Christine Persaud

Published: 03/20/2019 08:59:11 AM EST in Christine Persaud

Will Instagram Shopping Take Off?

Every social media site has its place. Facebook is mainly for the older crowd, connecting old friends and family, and promoting businesses and events. Twitter is for sharing short musings and news headlines. LinkedIn is for business networking. And Instagram is for brand building, sharing live stories, photos, and an endless number of selfies. But it will also now be for shopping.

Instagram plans to target the 130 million people who tap on product tags in shopping posts by allowing them to purchase said items directly from the site instead of having to visit the brand website to buy. The option is now officially available in the U.S. through a closed beta with more than 20 brands, including Adidas, Burberry, Kylie Cosmetics, Michael Kors, Nike, Prada, Uniqlo, Warby Parker, and Zara.

A representative from Instagram tells TechCrunch that there will be a selling fee for merchants for each transaction, and the funds will be used to offset the costs of building and offering the service. There's no confirmed amount, however, as Instagram continues to test the feature with merchants. But the cost will not be passed on to the customer.

Instagram plans to add the Checkout to organic posts for now; they aren't available for paid ads. However, that could change, at which point Instagram could be in the midst of a lucrative new revenue stream. The social site could also become a fierce competitor to the likes of Amazon, Walmart, and Best Buy, allowing customers to buy items from a site they already log into several times a day, and might often be the place where they first see an item that interests them, whether it's a piece of clothing, make-up, or a pair of headphones.

Today, through the closed beta, Instagram users will see the Checkout tags attached to feed posts, Stories, and Explore content. Tap the post and product tags will pop up, at which point the previous "View on Website" button will be replaced with "Checkout." Once you enter your payment information for the first time, including PayPal, Visa, Mastercard, American Express, or Discover, it will be stored for future purchases, making the buying process as simple as with sites like Amazon. It will require just a click or two versus driving users to individual brand sites where they have to re-enter their credit card information each time (unless it's already stored with a compatible online payment processor, that is.)

In the U.S., with brands like Warby Parker, Instagram is now replacing the View on Website button with a Checkout button, allowing customers ot buy items directly through the social site.

Once an item is purchased, you can keep track of it within a new Orders section of your profile, where you can view the status, cancel the order, initiate a return, or contact the merchant with a question or comment. Instagram will handle the payment portion, while merchants receive the customer's name and mailing address to ship the product. Customers can share their e-mail address with the merchant through an opt-in. That means that while Instagram provides a potential new source for more sales, it also keeps valuable customer information from the merchant that could be used for future marketing and outreach to encourage repeat business. This could be a turn-off for some merchants, who value the ability to keep in touch with key customers versus handing off control and contact to a third party. But merchants will be able to integrate tools within the Checkout feature, like Shopify, BigCommerce, ChannelAdvisor, and CommerceHub.

While the convenience for shoppers is undeniable, note that the Checkout feature will also impact your feed. Depending on how you interact with the Checkout, this will rank what content you see.

The move is a genius one to keep Instagram users within the app longer versus logging in and out to scroll through feeds or post Stories. It's now a one-stop-shop for learning about, sharing, and buying products you love. But that also puts a lot more control into Instagram's hands, which means Facebook's as well, which owns the company.

Without the View on Website button, that fruitful traffic that was being directed to the brand's Website, and giving them important data about potential and existing customers, is eliminated. Is it worth foregoing having that wealth of customer information that might lead to future purchases and marketing outreach to allow for the possibility of more purchases directly through Instagram? Warby Parker co-founder and co-CEO Neil Blumenthal thinks so, noting that the Checkout experience takes the convenience "one step further" for customers, making it more "intuitive and seamless for people who have discovered products they want to purchase instantaneously." Indeed, there's the potential for impulse buys that might not have been finalized had the customer been directed to a second website. How many times, after all, have you decided to buy something on Amazon on a whim, simply because it takes just two clicks to complete the purchase?

The idea could work, but Instagram will find itself embroiled in all of the other elements that come along with e-commerce, including product complaints and returns, payment processing and disputes, privacy and security issues, and more. Can Instagram handle it? Or are they biting off more than they can chew?

For now, in Canada, shoppers can continue to click the View on Website button should they be interested in an item. There's no word on when or if Checkout will be coming to Instagram for users north of the border.

Article Tags:  instagram, checkout, shopping, buy, retail, e-commerce, view on website, wary parker, adidas, social, facebook


Will Instagram Shopping Take Off?

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