This week, Instagram unveiled its new checkout feature that will allow users to buy products from brands – without ever having to leave the app.
It’s a mixed bag for eCommerce, as we gear up for a new era of online retail. But the new Checkout feature is a big deal for anyone in the online retail business.
23 big-name brands like Adidas, Nike, Zara and H&M will be the first to roll out the Checkout feature to US consumers next week, in a beta launch of what’s being heralded as “the ultimate retail tool.”
A natural progression from the shopping feature that we first saw in 2016, “Checkout on Instagram” allows shoppers to discover and purchase items from shoppable posts, managing their order from purchase to delivery within the social platform.
In short – Instagram’s making it a lot easier for you to spend your money.
How it works
Users will tap on a post to see shopping tags (as 130 million Instagram users are already trained to do). Rather than being linked to the retailer’s website from here, the consumer will instead be prompted to “Checkout on Instagram.” They’ll then be able to check out right there; and can opt to enter and save their credit card information, or use PayPal to complete the purchase.
It’s a lot more appealing than being redirected to the retailer’s website, or trying to remember where you saw that item that caught your eye while scrolling on your lunch break.
To sweeten the deal even further, users can then manage their order from their Instagram account; receiving order and shipping notifications right there in the app.
While currently a direct integration with Instagram, it’s planned that Checkout will also support eCommerce platforms like Shopify and Magento.
Instagram Checkout will make conversion easier. Consumers have previously been put off by the thought of creating different accounts with every retailer they buy from. Not only will Instagram become a central account across multiple retailers, it’ll even house credit card details to make repeat purchasing easier. However, these quick buys may lead to smaller order values as users are driven to buy what’s in front of them.
There’s a trade-off between higher sales, and less customer visibility. Users of Instagram Checkout can opt to share things like their email address and loyalty information with the retailer, but otherwise this information is kept private. Retargeting these consumers later down the track would then be ruled out. Instagram has said that it will share information on sales generated for merchants, however, so this will be an interesting one to play out.
Selling fees will be worn by the merchant, not the customer. In a bid to drive users to the feature, Instagram Checkout won’t attract fees when making a purchase – instead, retailers will pay for the privilege to sell (and the promise of higher conversion rates). Instagram’s declined to reveal how much they’re charging retailers as part of the beta test.
The future of advertising within Instagram could be eCommerce gold. While Checkout tags will only appear on organic posts to start with, utilising the feature for paid ads within the platform could lead to a new era in social advertising for eCommerce retailers.