nE-commerce Is Changing Instagram. Or Vice Versa?
Instagram is one of the most popular social media platforms in the world. It has 1 billion monthly active users. However, since May 2019, Instagram’s overall attraction has started to decline. For example, in mid-April, the maximum average level of appeal per account was 1.54%. Now the level of attraction is about 0.9%.
Why is this happening?
Reason 1
In 2016, Instagram announced that the priority in the news feeds would receive posts, which are the most interesting for users. Such updates aim to make sure that users didn’t miss essential publications from their friends.
Reason 2
Also, in 2016, Instagram started shifting their photo feed from a chronological list to an algorithmically driven one, ordered based on which posts they think users will like most. Instagram aims to show more and more content, and accordingly pretend for more and more user’s time and involvement. The goal of many social media platforms is to take as many user’s time as possible and to convert this time into ads and money.
This model has reshaped much of the internet into an “attention web,” with companies fighting tooth and nail to own every possible moment of your most precious resource — time. Why is it bad? Globally, advertising kills the quality of the content. Instead of building a long-term strategy of profile development, content creators prefer to catch a hype and “fast likes,” which pass quickly. This facts, in turn, reduce the number of satisfied users.
According to the new algorithms, the news feed of Instagram creates by few factors:
- Involvement. How high is the post’s popularity?
- Relevance. What content does the user interact with the most?
- Interconnectedness. What accounts does the user mostly contact?
- Actuality. How long has the post been published?
- Search history.
- Direct. Whose posts the user often shares in direct messages?
- Time. What is the duration of viewing the post?
This cause that Instagram doesn’t create a human-centered experience, but it creates an attention-centered experience, which puts the needs of the business squarely ahead of the needs of the customer.
Reason 3
Then in 2017, Instagram launched sponsored posts. This launch has changed the global access system for people. Now any profile can be detected. Is it good? Brands need to know your preferences to offer in advertising what you like exactly. It helps to make such advertisement successful. This cause that our data is mined, privacy discarded, and our actions tracked all in the name of more targeted advertising. News feeds are designed to hide creators and friends to drive ads, not to promote connection and shine a light on creators. Bloated, ad-filled UIs start to spread and content, in turn, began to lose popularity.
You can say that business has to pay the bills and seems it’s a time when we can’t avoid advertisement. However, can you imagine that if Facebook moved away from ads and instead charged each active user just $1.50 a month for the service, their Q4 2015 revenue would have increased by $1.2 billion?
What if Facebook started using that extra $1.2 billion to pay content creators for posting quality content on the platform like Netflix?
Reason 4
Instagram is moving from a small amount of advertising to an extremely large. Initially, Instagram planned to do advertising unobtrusively. But the volume of income money from it has won. Nowadays, 20 percent of the content, which created on Instagram, is sponsored. Instagram’s ad revenue amounted to $9 billion in 2018. Predicts that in 2019, advertising revenues will be $14 billion. Also, analysts from Deutsche Bank believe that Instagram will be able to generate $10 billion in revenue from the sale of goods by 2021.
All these facts cause that from the platform with beautiful photos and high-quality content, Instagram became a platform for the sale of large volumes of goods.
How does Instagram affect e-commerce?
The company “Dirty Lemon”, which produce trendy, tart health drinks raised $15m in seed funding at a valuation of $60m last December. Dirty Lemon founder Zak Normandin said Instagram was “critical” to his firm’s early growth. In 2015, the health drinks company launched using only an SMS-based ordering service and Instagram account to build an audience. The company started to make posts of bikini-clad women holding Dirty Lemon drinks with captions such as “let’s pretend for a moment we’re on boats in Mykonos” and “my life is nonstop, running from meetings to the studio to traveling to throw a party”.
In 2017, the company became one of the first to pay for advertising on Instagram and was at one stage spending $30,000 a day on the platform to build a customer base. This is the case when the content is king. Dirty Lemon sales had doubled every year since 2015 and were expected to increase by 250 percent in 2019.
American commercial company that sells sleep products online Casper use Instagram to building awareness of the company. Also, for cultivating a community where their employees can connect and engage with customers. Their posts include photos of people and small dogs swaddled in duvets with captions such as “emotional support pillow” and “if you’re reading this, go to sleep.”
It is just one of the dozens of startups that have leveraged Instagram’s 1bn users to build their businesses.
The evolution of shopping on Instagram
1. Trading tags
Instagram presented a beta version of Shopping Tags in 2016. Such tags allow going from the product on Instagram to the official website. Then on the site, the buyer can fill the details and place an order. According to statistics from Instagram, 130 million users willingly click on such tags every month.
2. IG Shopping app
In September 2018 came whispers about developing a separate application for IG Shopping. Statistics were pushing for this. 25+ million companies already have accounts on the platform.
3. In-app purchases
In March 2019, it became possible to make purchases on Instagram. However, only in the USA and for a limited number of brands like Nike, Adidas, Dior, H&M, MAC Cosmetics, Michael Kors, Prada, Uniqlo, Warby Parker, and Zara and several others.
Such steps by Instagram management once again confirm that the platform with simply beautiful content for ourselves is turning into a huge marketplace. Purchases on Instagram are a step towards omnichannel for large players and a great chance to get an audience for a small business.
How does this affect the business?
- With built-in purchases on Instagram, small businesses will not need the website, which means that the market for services to create sites in the future quickly may decrease.
- According to statistics, 100% of the brands specializing in the sale of clothing, used the trade tags in their accounts. Updates will help shorten the path from the user viewing a product to purchasing it.
- The process of making a purchase will be more comfortable, and therefore, the number of purchases on the Internet should increase.
Conclusions
We can compare Instagram to a graduate who is starting a new life stage. The platform adapts to changes and the latest trends in the world. Such changes lead to the fact that part of the past audience remains dissatisfied and leaves the platform. At the same time, Instagram gets a massive flow of new audience, with which the platform has the same interests. From the side of Instagram — to become the largest marketplace. From the bottom of brands — to take its place under the sun. And this is a big part of the history of e-commerce and shopping of new generation.
ChiPeer team develops an Instagram-like (user experience) p2p economy for overseas fashion shopping at traditional retail stores, boutiques, and outlets. ChiPeer uniqueness enables every particular human to benefit on awesome fashion shopping deals from abroad, saving up to 70% on remote purchases, & meantime become an author of content — the value that everyone can monetize for own interest.
ChiPeer is about to follow common remora strategy to attach to larger marine animals, partaking in a symbiotic relationship with Instagram. Our content double posting feature (while creating initial post at Instagram, add hashtag #chipeer to automatically re-post it at ChiPeer) will allow our target audience to flow organically from Instagram’s overwhelming environment that grabs your time and attention to much friendlier, energy efficient & time-saving ecosystem with specific shopping goals — ChiPeer.
Our p2p economy is tailored with a range of incentives to retain users & intensify users activities, reward healthy behavior & restrain a bad one.
Read more about ChePeer: Facebook, Instagram, Twitter.
In our next article, we will talk in detail about the phenomenon of Instagram’s subculture of professional fashion shopping agents & online shoppers & their life hacks to do shopping abroad remotely. And how it evolves today in different countries & cultures.
