Instagram Checkout – What does it mean for you?

The recent launch of Instagram Checkout (albeit in a closed beta trial for the time being) raises some interesting questions about where the platform is heading and how it’s positioning itself for the future.

To anyone with an interest in how social and retail work hand-in-hand, it will surely come as no surprise that functionality like this is being rolled out. Due to its visual nature, Instagram is essentially a digital shop window and brands have been successfully using it to drive traffic to their own sites through tagged items and the “View on Website” button on posts for some time now.

But what does this new way of shopping online, that keeps customers and transactions in a single app really mean for all those people who’ve got a vested interest in what happens on “The Gram”?

We’ve taken a look at the potential impact of Instagram Checkout for retailers, customers, influencers and more to see what it means for them right now and where it could lead in the future.

What does Instagram Checkout mean for Retailers?

At the moment there are only a limited number of brands in the US able to use Instagram Checkout while it’s still in beta trial. Instagram have picked some big names to trial it with including Nike, Kylie Cosmetics, H&M and Uniqlo.

It’s pretty safe to say that following this trial the functionality will be rolled out wider across the US, and then into other territories. So more retailers will soon be able to join the party.

For those retailers able to use it, the benefits will be relatively easy to recognise; a new channel to use to drive sales, quicker transactions that are more frictionless, and the ability to better prove the ROI of Instagram activity, to name just three.

On the flip side, there are a couple of things retailers will need to wary of. There’ll be a selling fee applied to all transactions that use Instagram Checkout which the retailer, rather the customer will have to shoulder.

Retailers also won’t be able to gather as much data on customers who have to opt-in to share an email address with the retailer they’re purchasing from rather than register on site.

And where does this leave retailers, particularly the smaller retailers who aren’t able to use the functionality whilst their bigger competitors can? Playing catch-up, unfortunately.

What does Instagram Checkout mean for customers?

For customers, Instagram Checkout will largely be a very positive thing. Checkouts will be used on feed posts, stories and explore content so will be everywhere that customers will see products they might like to purchase.

Being able to purchase in-platform means far fewer steps in the total purchase journey which hopefully will translate to a better and slicker experience for the end user. Customers will very much be able to “see now, buy now”.

Payment and delivery info will be stored within Instagram itself (if the customer wants to store that info) meaning that actual checkout can be near-instant and with no need to sign up for a user profile with each individual retailer customers can retain ownership over their own personal data with greater ease.

Orders can also be tracked and managed within Instagram itself with the customer receiving notifications from Instagram, rather than the retailer when orders ship.

The only downside is if a customers retailer of choice isn’t using Checkouts it could lead to frustrations, but the onus is then placed on the retailer in question to step up and use the functionality.

What does Instagram checkout mean for Instagram (and Facebook)?

It’s no secret that Mr Zuckerberg has got his eyes on the monetary prize when it comes to any moves made with Instagram or Facebook.

And this next step to actual shoppable content could prove to be the key to unlock a potentially massive revenue stream for Instagram.  This would initially stem from taking a cut of purchases made in platform through their seller fees, but if (or maybe when) Instagram then make checkout enabled ads available that could be the holy grail of ad revenue for the platform.

What will be interesting is how this is then managed in and amongst the increasing integration of Facebook, Instagram and WhatsApp into a single platform. Will Instagram Checkout ads lead the charge into an amalgamated platform where anything and everything is shoppable? Time will tell.

What does Instagram Checkout mean for Influencers?

Instagram checkout could be an absolute game-changer for Influencers.

If influencers are working with brands on a commerce basis they can start to act as their own shop window or digital storefront for individual brands to drive provable purchases.

With influencers and brands then able to track exactly what revenue was driven by influencer activity (rather than the “finger in the wind” approach which is prevalent at the moment) it enables influencers with an engaged following to increase their worth to brands.

On the flip side if an influencer isn’t delivering what a brand needs in terms of return then with data to hand there is little room for argument. Brands will easily be able to identify which influencers will deliver what they need (from a commerce perspective) and switch activity to those influencers who can better prove ROI.

Instagram checkout and the information it will provide brands could shift more power to micro or nano influencers whilst proving an issue for “super-influencers” who just have enormous followings but can prove little other benefit.

It could cause a seismic shift in the influencer landscape.

What does Instagram Checkout mean for eCommerce platforms?

The Shopify’s and Big Commerce’s of this world may take a hit from the introduction of Instagram Checkout by retailers, but the impact will only be slight in the short term.

Instagram have said they’ll allow merchants to integrate tools with checkout feature and it’s probably safe to assume that platform providers will want to do the same.

It’s naïve to think that brands are going to shift all their eCommerce activity to Instagram wholesale as it will still be just a single channel in a wider mix of online activity, but if it proves to be popular it could mean a significant chunk of purchase traffic is diverted away from retailer sites.

Platform providers will need to consider what this could mean for them in the long-term of working with retailer partners and how they fit into the eCommerce mix.

Interested in how Instagram Checkout could impact your own social activity or eCommerce strategy? Get in touch.

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