Why Instagram is becoming the next big e-commerce platform

Social media platforms are supercharging e-commerce in unexpected ways.
13 April 2020

Instagram is taking root in e-commerce. Source: Unsplash

Last year, Instagram brought together a cream of the crop, A-list of fashion brands that included, but were not limited to, Prada, Nike, ColourPop, Kylie Cosmetics to officiate ‘Checkout’, their new beta feature poised to transform e-commerce in the US.

Users can now buy a product that they see scrolling through Instagram without ever leaving the app.

Tapping the Checkout button, users can order a product and pay directly within Instagram. Shipping details and updates are given immediately after a purchase is made. It’s that simple.

The seamless experience is strikingly distinct from attempts that other social media platforms have made at integrating online shopping functionality and the user journey.

Tech giant Facebook’s marketplace offers merchants to list products, adds “shoppable tags,” and sends out sales alerts. However, the platform didn’t adopt a native payment method until last November, where the company launched Facebook Pay. Even now, the new feature is limited only to selected products and certain retailers.

Meanwhile, Pinterest offers Pinterest Lens, an enhanced way for users to zoom in on products of interests. However, it does not accentuate the promotion of products in the way Instagram does.

Most importantly, other social media platforms still largely rely on checkouts to be completed on a retailer’s website, off-platform.

On Instagram, the dedicated in-app Checkout feature is a real game-changer, set to take the e-commerce industry to greater heights, and prove a strong contender, biting at the heels of retail titans like Amazon.

report by OpenX revealed that 81 percent of millennials are shopping online on a weekly basis. Two out of three are researching gifts on mobile. With these statistics in mind, Instagram, as a native mobile platform, has already won half the battle in our mobile-first society.

Millennials and Gen-Zs makeup the majority of Instagram users, slowly growing in their respective careers to have higher buying power — they are the next wave of future consumers.

Even though mobile-first consumers are acutely aware of the advertising power and influence of social media in their purchases, Instagram users specifically are being constantly exposed to the strategically placed ads, sandwiched somewhere between cat memes and pictures shared by their friends.

The infinite scroll exposes users to countless ads and the conscious distinction between promotional content or authentic post becomes blurred.

Positioning themselves as a digital shopping platform becomes the next logical step in exploiting user behavior, an obvious step with a captured audience who is probably already planning to shop anyway. 

Based on the social networking giant’s own metrics, up to 80 percent of users follow at least one business account. With over 25 million businesses recorded on the app in 2018, these brand accounts are a vital source of revenue for the company.

The launch of its checkout feature is a super-catalyst in scaling the in-house business model to an innovative and disruptive e-commerce platform.

In comparison to online retail behemoth Amazon, though the e-commerce Goliath is firmly established in the market, it lacks Instagram’s appeal — seamless advertising and the ease of digital purchase.

The tech giant’s model is consolidated for planned shopping. Instagram, leverages on impulse buying, with the user engaging in product discovery in a way that feels organic to their interests. On the whole, it’s an entirely different, more engaging user experience.

When shoppers come across a new product on Amazon, their only further product discovery comes in the shape of comparisons at the bottom of the page that match the product description in the user’s original search query, as opposed to any relevance or appeal.

Instagram also exhibits incredible potential as a strong contender in ameliorating the current crisis.

With e-commerce experiencing mass disruption in operations and logistics, and a global supply chain distraught, there’s plenty of room for innovation and development. With social distancing heavily enforced, attention is turning more intently to social media to stay connected with loved ones and the outside world.

This very point places Instagram’s e-commerce capabilities in the spotlight.

The social network’s Checkout feature has boldly positioned itself to eliminate the middleman from the user’s product discovery and purchase experience. 

SMEs can now utilize Instagram as a platform for each step of the customer journey, with added advantages on customer analysis and market view. The platform is also exploring options for users to make public private or saved categories, which gives marketers invaluable needs on consumer ‘wants’ and what they will ultimately “get” in terms of paid content on their feed.

This latest addition is set to be a huge boost for merchants with small capital, enabling them to kick start their online retail journey.

While e-commerce empires have been generally built on iterative layers of APIs (application programming interfaces) and successfully developed cloistered platforms, this old model is a stark contrast to Instagram’s simplicity.

The social networking company’s seamless online shopping experience places users at ease, with impulse buying so well-integrated into the scroll that its guilty pleasure becomes a selling point.