Dan Hagen in Marketing Week: Can Instagram become a shopping site?

17/11/2016

Instagram is hoping to convince both brands and consumers that it can become a shop, not just a shop window, but it faces a number of challenges.

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Instagram wants to help you shop, that much is clear from a number of its latest updates.

Last year, it launched a ‘shop now’ button on the site so retailers could send their followers to a page within the app where they could buy. Then earlier this month, it introduced a feature that lets brands put more product information such as more detailed information and prices in their posts.

James Quarles, vice-president of monetisation at Instagram, told the Financial Times: “It is like going from the shop window to the cash register with missing steps in between.”

The latest update lets users include mentions and web links in ‘Stories’, which allows users to share different moments of their day in a single post. It is not difficult to imagine brands using it to include links to products being shown.

Instagram has been talking up its impact on purchases for a while. In September, it claimed that a third of its 500 million global users have bought an item of clothing they discovered while using the social network.

However, it now wants to play a bigger role in that purchase. It doesn’t just want to be the place people discover things they want to buy but where they can actually make the purchase too .

Making it easier to buy

To do that Instagram needs to reduce friction in the buying process. Having to navigate to a different site, and one that more often than not requires a different login, allows plenty of opportunity for consumers to back out of a purchase.

The latest updates are a step in that direction.

Jason Nathan, group managing director for data at dunnhumby, explains: “Up until recently, the process of converting an individual on Instagram to a purchase has been beset by friction. In the past 12 months, social media platforms have opened the door to direct purchasing – effectively acting as the channel for both advertising the product and for completing the ecommerce transaction.

“Instagram, with its focus on imagery and sharing, creates a particularly rich seam of content and experience for a ‘see now, buy now’; images are explicitly added to ‘show off’ the aesthetic appeal of a recipe, fashion layout or such like. The leap to sponsored content to do the same feels like a short one and the data required to serve that content in a relevant matter is close at hand.”

And many brands have welcomed the move as an opportunity to provide consumers with an even richer experience without them having to leave the platform. That, combined with user data from Facebook, means advertising can be highly relevant.

Annabel Kilner, head of commercial at Made.com, says: “It means a more immersive experience for consumers, and better brand experience for advertisers; and when they are ready to click-through to an advertiser’s site, it means a more informed consumer and better qualified lead for advertisers.”

Kilner even suggests that, if the trial proves successful, that brands will increase their ad budget allocation.

Instagram is testing new shopping features with a number of US brands

“Instagram’s shoppable tags are a step in the right direction for the platform,” says Dan Hagen, chief strategic officer at media agency Carat. “Instagram already holds a strong position as a ‘magazine’ of inspirational / aspirational content for a lot of people. Removing the final barrier between desire and purchase seems like a natural next step. And it is one that offers additional value to brands that make use of the platform.”

The challenge of pivoting to ecommerce

Yet there are challenges. As with any new ad product, Instagram must tread a fine line between serving users relevant content but not being creepy and educating users on the value exchange. Most started using the site for its inspiring images, not to make purchases, so it needs to ensure people are comfortable with the commercial content.

But the biggest barrier is still payment. No matter how much integration Instagram makes at the moment users still have to leave the app to make a purchase. Getting them to trust it with their payment details is a big step.

Dunnhumby’s Nathan says: “Will Instagram’s users be able to square the experience that had drawn them to the platform with what might feel more like an advertorial or a shop window? Would they feel comfortable with commercial content or would they just feel they should be on Etsy or eBay instead?

“And will they be able to have customers part with their payment card details on a platform that has no heritage in holding that data? For a true see now, buy now experience, customers need to trust Instagram with that data.”

Instagram will need to work closely with brands and advertisers to show them what sort of content works for driving conversion and when is the right time to drive purchases and when it is better to inspire or entertain or simply let users view photos and videos from their friends.

 

This article first appeared in Marketing Week on 17/11/16

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