Instagram discovered a new revenue stream, and on March 19, 2019, rolled out its latest shopping feature: Checkout. The process of discovery has been the core of the Instagram experience since its conception. And as a result, platform users are people who want to explore, get inspired, and find new products from the brands they love. So naturally, to meet this consumer behavior shift, retailers wanted an opportunity to capitalize on this user base to build relationships and ultimately convert these valuable, potential customers. This new experience allows users to discover a product and then purchase that product without ever leaving the app.
The product is currently in a closed beta with limited partners included and is only available to users in the US. A few brands already participating in this beta include Zara, Michael Kors, Revolve, Dior, Outdoor Voices, and adidas.
How Instagram Checkout Works
A user can tap to view a product from a brand’s shopping post, which will prompt a “Checkout on Instagram” button directly on the product page. The user can then tap it to select from various product options, such as size and color, and then proceed to payment, all within the Instagram app.
To checkout, a user will need to enter their name, email, payment, billing, and shipping info the first time, and then their information will be securely saved for convenience the next time they shop. This will mitigate the number of carts that get abandoned by users getting frustrated about needing to input payment info across multiple sites — on Instagram, their info will be stored and can be used to shop across brands with ease.
Shoppers will also receive notifications about shipment and delivery within Instagram to keep track of their purchase within a new “orders” section on their profile. They’ll also have options to contact the seller, cancel an order, or initiate a return. Surprisingly, these messages and notifications will not be rolled into Instagram’s in-app messaging feature, which is typically how Facebook operates with Messenger.
What’s In It For Instagram
Instagram will be charging an undisclosed seller’s fee to help fund the maintenance of the product, as well as offset transaction-related expenses. Staying true to its customer-centric mentality, this fee will ensure merchants are paying for higher purchase conversion rates rather than tacking on a fee to the products sold on Instagram, which would force users to pay the convenience fee of purchasing in-app.
What This Means For Brands
As previously mentioned, Instagram Checkout allows users to seamlessly purchase products at ease with saved payment info across brands, leading a more convenient checkout experience and reduced abandoned carts. However, brands may experience a decline in traffic to their site as well as access to less customer data than if the purchase happened on site. Instagram will be providing merchants with only the necessary details to fulfill an order (i.e., contact info and shipping address). Users will also have an opportunity to opt-in to marketing emails from the merchants, then allowing Instagram to share their email address for marketing efforts.
What’s next
So what are the next steps for brands? Nothing just yet, unless you are selected to participate in the closed beta. In the meantime, retailers should continue to focus on building an Instagram presence to grow a stable and engaged following to ensure that once they’re in the program, they have a loyal, actively engaged following willing to purchase.