Checkout On Instagram Is a Game Changer for Ecommerce
By Megan | Mar 22, 2019 (4 min read)
In 2019, Instagram is fast becoming the epicenter of the social media universe.
And soon, with the inclusion of ‘Checkout on Instagram’ as a beta feature, it could well become the center of all mobile ecommerce transactions too.
If the Checkout On Instagram beta proves to be a success with ecommerce providers, it could create a start to finish shopping experience like no other.
What is Checkout On Instagram, and how does it work?
Instagram announced that it is bringing a checkout feature to its mobile app. With Instagram checkout, a person can store their payment information inside the app to make purchases more quickly.
Currently, this is only in beta testing mode, with more than 20 brands using checkout to start. Beta testing brands include Adidas, Burberry, Dior, H&M, MAC Cosmetics, Michael Kors, Nike, Prada, Warby Parker, and Zara.
When a user sees an item shown in an Instagram post, it will have the product information displayed directly inside the app.
Items that are eligible for in-app checkout will have a blue ‘Checkout on Instagram’ button below them.
When a user taps it and they will be asked to provide an email address, physical address, and payment information. This information is shared with the seller to complete the order.
Once the order is placed, a user will receive a receipt from Instagram and then the delivery will be completed by the seller. All past purchases through the Instagram app will also be viewable in a receipts section within the app.
How has Instagram affected Ecommerce?
To better understand the power of ecommerce on Instagram, consider some statistics:
- Instagram reported this week that 130 million users a month tap on product tags in shopping posts.
- Over 80% of Instagram users today follow a brand or company account.
- Approximately 70% of users have reported discovering a product through the Instagram feed.
- Other studies reveal that the average order value for customers referred from Instagram is $65.00
However, up until recently, all transactions had to complete on a sellers’ website. Tapping on a link would push a user out of the Instagram app onto a mobile shopping cart page. This led to high levels of cart abandonment.
Even with this difficult step, Instagram has been affecting the buying process of users now for over 3 years, and this may just be the beginning.
What does Checkout on Instagram mean for Ecommerce?
Advertising on Instagram has had a huge impact on how products are discovered. According to Forrester research, Instagram ads have the highest engagement rate of all digital ad placements.
For brands that can generate a strong Instagram following, it can provide a direct channel for purchasing.
If you are a company that sells consumer goods through your own ecommerce website, you might consider how Instagram could be used to increase sales.
With the inclusion of Checkout On Instagram, the app now has three elements all contained within its walls: social connection, entertainment, and ecommerce.
Using the strategy of adding products natively into posts creates less of an advertisement feel on Instagram.
As well as this, Instagram Influencers can offer their audiences a preview of products that can link to direct buying options all within the app. This has the potential for both increased exposure but also a new revenue stream for influencers to capitalize on. And with all Influencers wanting to find ways to monetize their audience, you can rest assured this will become a part of the ecommerce trends in the years ahead.
Finally, the fact that Instagram will store users payment data after their first in-app purchase reduces the friction and security concerns of shopping on independent websites.
Instagram is Creating an ‘Island’ of Ecommerce
In a way, with this addition to its features, Instagram has created an ‘island’. This means that users have no need to leave the app because it offers the aspects of social interaction, entertainment and product shopping all in one.
Although still in beta, once the Checkout On Instagram feature rolls out to businesses, it will likely have a huge impact on the way users purchase, and on the ecommerce platforms themselves.