Why You Should Pay Attention to Instagram Shopping

Instagram Shopping has been around for a while now. In fact, Instagram first rolled out shopping features to thousands of businesses in early 2017—nearly four years ago. However, back in those days, the functionality of Instagram Shopping was still rudimentary. There wasn’t much to it aside from brands being able to tag products in feed posts and stories. Interested customers can click on the product tags and get product information as well as a link to the brand’s e-commerce site. Instagram Shop also came out around that time. This was built as a dedicated page, integrated with a brand’s product catalogue, to showcase a brand’s collection of products through the profile, explore page, or through a product tag. However, the biggest limitation of Shops was that users were not able to actually make purchases within Instagram, which meant that actually purchasing a product would require an extra step—a step that leads the customer away from the Instagram platform.

Until now, there have only been a few additional features added to Instagram Shopping. In this article, we will explain how the emergence of Instagram Checkout, as well as new augmented reality shopping experiences, will fundamentally change social media and e-commerce.

What is Instagram Checkout?

The first piece of the puzzle for Instagram, in order to become more of an e-commerce platform, is to set up a payment system that can allow people to shop within Instagram. Until recently, Instagram Shop only served as a tool to redirect people to a company’s actual site. With the implementation of Instagram Checkout, a feature under Instagram Shopping that allows consumers to pay directly on Instagram, everything is going to change. Essentially, Instagram Checkout allows consumers to view a product and then continue on to the payment process, all within Instagram through Facebook’s proprietary payment system called Facebook Pay. Instagram Checkout first rolled out in March of 2019 to 26 businesses across the fashion and beauty industries. This pilot group consisted of brands like Nike, H&M, Zara, Michael Kors, Outdoor Voices, Burberry and Balmain. They underwent experiments to uncover the benefits of this system for online retailers. After promising results, Instagram decided to roll it out to all eligible US businesses and creators a year and a half later. 

So why are people going nuts after this? Well, without Instagram Checkout, a brand relies on customers going through a multi-step process to pay for a product. The more tedious the checkout process is, as well as factors like slow-loading sites, the harder it is to actually get conversions. Fundamentally, Instagram Checkout will transform Instagram Shopping into an actual shopping platform by streamlining the process to purchase, which in turn will speed up purchasing decisions so that it can trigger impulsive purchasing. However, there is a downside as well. When a brand makes a sale, Facebook Pay will deduct a 5% fee per shipment or a flat fee of $0.40 for shipments of $8.00 or less. To some stores, this fee is too high. To others, they believe that the ability for consumers to purchase in two-taps will have a massive impact on conversion rates, so the fee is definitely worth it. 

Improvement of Instagram Shop

In addition to the implementation of Instagram Checkout, Instagram Shops will be improved as well. Businesses can customize the digital shopping experience, such as by changing accent colours and collection thumbnails,and curating products into themes that tell their brand story. In addition, Instagram is beta-testing the implementation of a dedicated Instagram Shop that will replace Activity (heart icon) in Instagram’s main navigation. This just shows Instagram’s dedication to expanding its Instagram Shopping capabilities as more than 200 million Instagrammers visit at least one business profile and 70% of shopping enthusiasts turn to Instagram for product discovery. Other new features that are being trialled include Instagram Live Shopping and using product tags in captions. For Instagram Live Shopping, a brand or an influencer can showcase a product on the screen while “Live” and have customers add it to their bag directly. Product tagging in post captions is still at its early stages, but we believe that it will be similar to product tagging in posts where a consumer can click on a tag and open a product page. 

Augmented Reality in Instagram Shopping

AR on Instagram is the next big thing coming after the worldwide release of Instagram Checkout. Currently, Instagram has partnered with brands such as MAC Cosmetics, Ray-Ban, NARS Cosmetics, and Warby Parker by allowing them to try out an AR try-on feature during Checkout where users can virtually try on the products before making the purchase. This feature will be accessible through shop pages, feed posts, stories, and profiles. What’s great about this AR feature is that consumers can continue with the transaction and purchase the product directly through the IG camera. This creates a seamless transition between trying out a product and buying it. This augmented reality experience is expected to expand to IG feed ads as well. Brands all over the world are jumping on the AR bandwagon as early adopters of the technology have seen some very promising results so far. To learn more about AR in marketing, you can read one of our articles. As the world slowly pivots away from brick-and-mortar stores, new innovations like Instagram Checkout and AR try-ons are the key to allowing companies to embrace e-commerce. We can’t wait to see what the future of e-commerce holds.

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