Fast Forward: Instagram Embraces Shopping
As Instagram embraces its new identity as the mail-order catalog revamped, new brand opportunities in social commerce start to emerge
Editor’s note: This is an abridged edition of our Fast Forward newsletter featuring Instagram’s latest updates and their brand marketing implications. For the full version, please contact our VP of Client Services, Josh Mallalieu (josh@ipglab.com) to send a request.
What’s Happening
On Tuesday, Instagram rolled out a Shopping tab to its Explore page, making it easier for its one billion and growing users to discover shoppable content and buy directly within the app. The new tab will be personalized based on whom a user follows and what shopping content engages them. This marks the first time consumers will have a space within Instagram entirely dedicated to shopping, which is a strong signal indicating the direction that Facebook intends to take Instagram.
The visual-first social network also expanded its Shopping tags for Instagram Stories to all viewers worldwide after a limited test in June. This allows brands in 46 countries to turn their Stories into shoppable content simply by adding the shopping bag icon to Stories, which users can click through to make a purchase on the product page. According to Instagram, over 90 million users now tap to reveal tags in shopping posts every month.
These two new updates came close on the heels of reports that Instagram is preparing to launch a standalone shopping app. Although Instagram has yet to confirm the news, a standalone shopping app makes sense as it would solve the issue that users don’t necessarily want to shop where they socialize. If materialized, this standalone app would create a valuable new mobile channel for brands to reach customers and for Facebook to further monetize. It is also worth noting that this would not be the first spin-off app for Instagram — in June it launched IGTV, a YouTube competitor dedicated to long-from vertical videos.
The Trends We See
As Facebook’s user growth stagnates in developed markets, Instagram has been stepping on the gas pedal of social commerce as a new source of revenue and growth. The social network has been adding various shopping-friendly features and ad products to its platform since last year. And these new updates, along with the rumor of a standalone shopping app, further signals the importance of social commerce in Instagram’s strategic positioning.
Furthermore, monetizing Stories seems to be a top priority in social commerce strategy, as Instagram and Snapchat race to monetize the 24-hour-only vertical format with shoppable content and ad products. According to Facebook’s own research, 33% of Instagram users worldwide reported they become more interested in a brand or product after seeing it on an Instagram Story. Whether that interest translates into sales is anyone’s guess, but at least now brands will be able to track the conversion rate.
In contrast to the U.S. and other mature markets, social commerce has been the leading channel for online purchases in East and Southeast Asian markets for years, thanks in no small part to the high adoption of mobile payment in the region. While mobile payment usage still lags in the U.S., it is estimated to grow significantly in the next two years, making it easier for more U.S. consumers to embrace social commerce.
What Brands Need To Do
As Instagram embraces its new identity as the mail-order catalog revamped, new brand opportunities in social commerce start to emerge for marketers.
At the moment, Instagram’s social commerce products are still focused on native, organic shopping discovery features, mostly serving direct-to-consumer brands that use Shopify as their backend. But its existing shopping ads and tags provide good tools for all brands to turn their organic content into shoppable portals. Brands should also embrace the increasingly visual-driven nature of social commerce. Stories are set to outpace News Feed posts soon, which offers brands more flexibility in creating authentic shoppable content at a higher frequency.
Additionally, the rise of social commerce will also dovetail with the growing adoption of mobile payments and digital wallet services. This means there is a big opportunity for banks and credit card companies to become a stakeholder in this emerging value chain. For example, payment providers could offer rewards or loyalty points for purchases made through social channels in order to differentiate their offering and become the default solution that mobile shoppers use.
Most importantly, it is important for brands to acknowledge that Instagram is now the place where the latest trends happen, be it fashion, music, travel, or food. Therefore, brands would be smart to get in on the ground zero and keep up with the consumer zeitgeist. Based on those first-hand learnings, leveraging the growing cohort of social commerce tools to drive sales would be the icing on the cake.
Want to Learn More?
If you are keen to learn more about Instagram’s latest updates and explore what social ecommerce mean for your brand, the Lab is here to help. You can start a conservation by reaching out to our VP of Client Services Josh Mallalieu (josh@ipglab.com).
