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Instagram Checkout: the shopping mall of social media

This week, Instagram has taken a big step in simplifying e-commerce for consumers, as well as creating a new revenue stream for the photo sharing app. And it could well be a game changer.

Checkout on Instagram lets users make purchases directly within the app through PayPal. When a user taps on a product that’s tagged in post, they’ll now be able to buy it without having to leave the app and visit a third-party website.

This takes the Instagram shopping experience to a whole new level. Currently, when a user taps on a tagged shopping post, they can see the price and description of the product. But they have to click through to the site to make the purchase.

Checkout is a major development for the Facebook-owned platform as it‘ll enable shoppers to go right from discovery to purchase – all within the four walls of Instagram. For retailers, it’s a massive opportunity to encourage impulse purchases from shoppers, based on posts they discover from the brands they love.  

So, what’s the catch? Instagram will be taking a fee from every sale generated through Checkout, but they haven’t yet revealed the percentage. The trial is currently in a limited beta with around 20 retailers in the US, but if successful, will be rolled out globally later this year.

If the positioning is a hit, and it’s hard to imagine it won’t be, it‘ll separate Instagram from the other social networks (and even Amazon) with an offer that none others can currently match.

When consumers know what they want to buy, Amazon is very often the go-to destination with 55% of consumers starting their product search on the platform. But the countless hours consumers spend browsing Instagram can inspire purchases that currently happen elsewhere.

What’s more, Instagram’s algorithms work so well that it’s likely the app will be able to show you products – both organically and through paid – that appeal to each of their one billion users.

From a brand perspective, this new feature highlights just how important it is for e-commerce brands to have a well-thought-out plan for content and creative on Instagram. Over the last couple of the years, the platform has become the key channel for engagement and product discovery, and now it looks likely that it’ll become a significant channel for purchasing.

This presents brands with a whole new set of challenges; to develop creative that stands out on Instagram and converts directly from the post. The brands that get this right (ahead of the rest) will reap the rewards of being early adapters in this exciting and hugely scalable channel functionality.

Instagram is entering a space that no other online retailer or social network operates in. Especially with the substantial decline in users engaging on Facebook, this could be a glimpse into the future for how the social media giant will still manage to comfortably command user attention.

James Mortimer is paid social strategist at iCrossing



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