[SMK] Social Media Knowledge


New ‘Checkout On Instagram’ Rolling

Grammers Can Now Browse & Buy On Instagram Without Ever Leaving

Instagram has taken a leaf out of WeChat’s book and is getting into the commerce game, with the launch of 'Checkout on Instagram'.

The new feature means that Grammers can shop till they drop without ever leaving Instagram. No click to website. No app download. Transactions can take place start to finish in app.

With checkout, users can store their payment information with Instagram to make purchases more quickly. In return, Instagram is charging retailers a selling fee.

As reported by Techcrunch, an Instagram spokesperson confirmed,

“We will introduce a selling fee to help fund programs and products that help make checkout possible, as well as offset transaction-related expenses

We aren’t sharing the specific number right now. We are testing a selling fee with businesses during the closed beta. It will not change the price of the items for consumers.”

Because clearly businesses never pass on extra costs to consumers…

Could Instagram's New Commerce Play Dwarf Ad Revenue?

Checkout opens a potentially vast new revenue stream for Facebook.

Instagram has 1+ billion users, with 130 million people tapping Instagram’s product tags on shopping posts monthly.

Instagram launched Shoppable Posts in 2017, before integrating with Instagram Stories and Explore in 2018.

However, despite increased commercial functionality ecommerce conversion is a slightly clunky experience within Instagram. Checkout should go a long to improving this, as friction is reduced.

The new feature is currently in beta, in the US, with 20 brands, including Nike, Adidas, Dior, H&M, MAC Cosmetics, Michael Kors, Oscar de la Renta, Prada, Uniqlo, Warby Parker, and Zara.

Items eligible for in-app checkout now have a big blue “Checkout on Instagram” button below them. Tap it, and you’ll be asked to provide your email address so that the seller can complete your order. From there, you enter your delivery information and payment method, and after reviewing your details, you can place the order.

Shifting Social Media Purpose

For the past decade, social media usage has had two major underling user motivations:

  1. Wasting time
  2. Connecting with people

As such, despite being able to reach high volumes of people on social channels, audiences are often more passive, sitting higher in the funnel. This, in turn, translates to much lower conversions rates from social traffic, when assessed against search audiences.

Underlying search intent, by comparison, tends to split out into three broad areas:

  1. Informational (i.e. wasting time or researching)
  2. Navigational (i.e. finding something online or offline)
  3. Transactional (i.e. booking flight to Auckland)

Instagram’s latest launch will not only start to alter this dynamic but also is likely to be the first of many moves in this space.

Sheryl Sandberg, Facebook COO, flagged the growing social 'commercial intent' in an earnings call before Xmas, and the opportunities inherent within:

As you think about commercial intent in Facebook versus Instagram, there's so much activity on both.

We think there's a lot of opportunity for people to have commercial intent, if not have it when they start, but develop it because they see things they're interested in, in both. Instagram can be more interest-based in some places than Facebook.

So there are places in Instagram like Fashion or like Shopping that have very high signal, and that gives us I think a very strong opportunity there.

Given Facebook's recent record for user privacy and data protection, I, for one, can't wait to hand over my bank details. Bring on the one-click-buy fidget spinners.


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