Instagram, the social network completely devoted to photo and video sharing, is looking to break into the online shopping industry with its new in-app shopping. From its beginnings in 2010, Instagram has never ceased to innovate. Much of what the network has done has changed both social interactions and modern advertising. Instagram has specifically led to the creation of “influencers”. These users receive free products and/or are paid by big brands to promote their products through their posts. The idea is that consumers are more likely to trust advertising if it comes from a friend-figure than through traditional channels.
All this advertising appears to be working and now Instagram wants in on this lucrative business. With its in-app purchasing, Insta hopes to generate another income stream and move towards adding “commerce business” to its company description.
The Logical Next Step For Instagram
Instagram users spend hours scrolling through their feeds, curating them to show accounts and posts that reflect their interests. The end result is a truly personalized platform and a snapshot of who you are as a person. The Explore tab on the application takes this personal summary and introduces you to similar accounts that you may find interesting based on what you already follow. It began with interests such as traveling. A year ago, the Explore tab introduced a shopping section.
Tags began to pop up on Explore and brand accounts a user already followed. These tags include more detailed information about the product in the post, including its price. For example, you can have a photo of a pair of shoes that is tagged. The tag will give the style name and let you know they sell for $200 – just in case you might be interested in having the same pair. Some tags also include links to the brand’s mobile site which opens inside Instagram itself. You can purchase the item this way, but the process is not without issues, leading many users to abandon before completing their purchase. Here is where Checkout comes in.
On March 19th, Instagram launched Checkout to its users in the United States. This beta trial version is limited to 23 partner brands for the moment. Many are beauty companies: Anastasia Beverly Hills, ColourPop, Huda Beauty, KKW Beauty, Kylie Cosmetics, MAC Cosmetics, NARS, NYX Cosmetics, and Ouai Hair. Luxury brands Burberry, Dior, Oscar de la Renta, and Prada are also represented. There are eight clothing and shoe brands – Adidas, Balmain, H&M, Nike, Outdoor Voices, Revolve, Uniqlo, and Zara – and two accessory companies, Michael Kors and Warby Parker.
Users are able to make their purchases using PayPal or major credit cards including Visa and Mastercard. They will only have to enter their personal details, payment method, and shipping address the first time. From then on, they can click and shop to their heart’s content in a simple and secure manner. Simply look for a blue “Checkout on Instagram” button below the item and you’re set.
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How Businesses Can Get Involved
Although Checkout is in beta testing, Instagram is already providing other companies with information on how it works and a form to show their interest in joining. Companies who choose to allow their customers to purchase directly on Instagram will pay an undisclosed commission fee to the platform to cover the order handling.
In time this selling opportunity should be expanded to all markets who currently have access to Shopping on Instagram. These include businesses located in 46 countries who meet specific requirements. The requirements include having an Instagram Business Profile connected to a Facebook Page and a Facebook Catalog and selling mainly physical goods.
A Rival For Amazon?
With the development of Checkout, Facebook, Instagram’s parent company, may be taking its first step in becoming a rival to Amazon. With the fact of it having much information about its users already, the company has an advantage that other commerce businesses do not. Even so, Amazon has such a stronghold that it will be hard for any company to take over its top spot quickly. This is not the case, however, for the brands selling through Instagram. They could see their own website traffic and sales plummet as a result of Checkout. The question will then be if they continue to use Instagram as a marketing and sales tool or if they go back to more traditional methods they can control more completely. Only time will tell.