Instagram Checkout: What It Is, Why It Matters For Your eBusiness And How It Changes The Social Media Shopping Game

Instagram checkout
200 million Instagram users visit at least one business profile daily.

A recent Facebook survey has found that Instagram helps users:

  • Discover new products or services (83% of surveyed users)
  • Research products or services (81%)
  • Decide whether to buy a product or a service (80%)

Another research points out that 200 million Instagram users visit at least one business profile daily.

Instagram Checkout is a powerful, up-and-coming feature that will provide more than just meeting the growing demand for product shopping on Instagram.

In this article, we will look into:

  • The idea and intent behind Instagram Checkout
  • How this feature will transform businesses, brands and online shopping
  • What pain points Instagram Checkout can answer
  • The brewing competition in the checkout race 
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Instagram Checkout Background And Development

Instagram’s new Checkout feature first surfaced in the market in March 2019.

It was only available to a closed beta test group of big brands in the US that have been successfully using it ever since, exclusively for US customers. 

It comes as a natural transition and expansion of Instagram’s sales features which the social network brand introduced them in 2016. It later expanded with the addition of tags, shoppable stories and Shopping for Creators features.

Checkout is slowly breaking out of the enclosed Beta Testing phase, with more brands now testing the new feature.

Another perk that comes with the expansion is the possibility to run with Shopping from Creators, that allows brands to tie-in high-profile influencers and curate how they further link their posts to your store. 

In April 2019, IG launched the feature that enables people to shop inspiring looks from the creators they love without leaving Instagram. With the ability to tag products in their posts, creators can make it easy for people to shop their favorite styles on the spot.

Only businesses in the shopping checkout beta will be able to use the shopping from creators feature. Both creators and the brands they tag will receive shared insights within Instagram. For brands, this means a new way to reach an engaged audience that is actively looking up to their favorite creators for inspiration and make it easier to shop a brand’s products.

Instagram Shopping Now vs How Instagram Checkout Simplifies Current Shopping Dynamics

Let us take a look into some compelling Instagram usage stats that relate to the shopping experience of its users:

  • 500+ million users browse brands every day
  • 130 million use shoppable tag every month
  • 79% of users search for more information on Instagram’s product page
  • 65% visit the brand’s app or website
  • 5.2% add items to cart
  • 3% complete the purchase

At the moment, shopping on Instagram follows the lengthy multi-step marketing funnel that looks like this:

  • Users go back and forth between the vendor’s e-commerce site
  • They double back on the product information
  • This requires further account information or signing up to checkout 
  • As a result, leads and conversions fall through the cracks throughout.

Instagram Checkout disrupts this dynamic, addressing all these pain points and cuts this process to a simple 2-step checkout procedure: 

  • Users need to click on a shoppable tag on an Instagram post
  • They select product specifications, quantity and hit the checkout on Instagram to place their order
Instagram Checkout process
[Source: Instagram]

How Does Checkout On Instagram Work?

We already covered how Instagram Checkout basically works for users: a streamlined 3-step process of tapping on a tag, selecting specifications and entering billing information on the first purchase. Then the platform retains your information and a user is remembered for future purchases.

On the business end of things, this feature requires more work, but, as brands have been reporting so far – the effort pays off.

As a business, you need to take these steps to make their Instagram Checkout work:

  • Convert your Instagram profile to a Business account
  • Link it to a Facebook product catalog – because Instagram runs this feature through a double-checking feature via Facebook’s Business manager. 
  • Wait for Instagram’s approval and, when it arrives, set up your Instagram shop
  • Link it with Instagram Shop From Creators feature that enables influencers to tag your products

Additional 3rd party integrations may be necessary – for example, linking an existing e-commerce platform or reporting solutions to track revenue and conversions.

To set up your Instagram shop, you also need to be mindful of the fact that your operations must still be compliant with the platform’s merchant agreement and commerce policies.

Allowed products include physical goods, pertaining to the clothing apparel, home, living, beauty or travel industries.

Given that Instagram Shopping is currently available to multiple global markets, it gives a great perspective and scope to adding an in-platform checkout option. It is advisable to take that into account when planning your business strategy, irrespective of when Checkout becomes readily available to the broader market.

It is worth noting that Instagram Checkout is currently only available for the US market.

Instagram for Business setup
[Source: Instagram]

What Pain Points Will Instagram Checkout Help Businesses Solve?

Worldwide, business report circa $18 Billion dollars in revenue lost due to cart abandonment.

Also, 85% of shoppers abandon carts on mobile devices due to

  • Slow loading sites
  • Tedious checkout processes
  • Creating accounts and login information

Specifically, users also encounter these common issues when buying online:

  • Credit card information data security
  • Unverified trustworthiness of products
  • Reluctancy to buy due to different mindset of users

Businesses, on the other hand, encounter these pain points: 

  • Instagram’s commission 
  • Eligibility for businesses due to changing terms and conditions
  • Brand alienation: social vs shopping intent
  • Customer Lifetime Value driving attention away from the core website

Instagram Checkout allows retailers to sell their products simply and efficiently based on social presence without the need for an in-depth e-commerce-based website.

Instagram Checkout only adds to these other efforts and makes paid social advertising a more attractive option for online retailers. This feature has a great potential to lead to higher conversion rates since it is completely removing a checkout step.

How Direct Checkout Advances Instagram Shopping Experience

Some experts estimate that Instagram Checkout has the capacity to generate $10 Billion dollars in revenue by 2021.

But, more than profits for their creators – why does Instagram Checkout matter for the average user?

According to Facebook’s report, 87% of surveyed people take action after seeing product information on Instagram.

Furthermore, over 200 million Instagram users visit at least one business profile per day, and how 80% of the platform’s users have bought something off the platform.

  • Promoting products directly: this feature allows brands and sellers to advertise their products to a potential audience of roughly 1 billion users, making shopping a seamless, frustration and friction-free maneuver. This very much falls into Instagram’s unique advantage as a marketplace: namely, it capitalizes on desire, not the intent.
  • Exposes products to users with an impulsive purchase intent: Intent-marketing is what algorithms like Google, Bing and even Facebook encouraged in recent years. This type of marketing appeals to the conscious, rational mind and aims at buyers’ intent. However, Instagram’s position as a mirror for the life users want to live triggers desire in the subconscious mind which translates into impulsive purchasing. 

Social Media Checkouts: Instagram’s Upcoming Competitors

With their Checkout feature, Instagram as a social media platform is branching out to other digital industries and thus gaining more competitors than just social media giants.

Pinterest

Facebook’s and Instagram’s biggest competitor in social shopping may turn out to be Pinterest. Many Pinterest users use the platform exclusively for discovering things to buy. 

Pinterest already offers retailers Shopping Ads (as does Facebook), which provides users with details about items and then sends them to a checkout page on the retailer’s website. Developing a more seamless checkout process like Instagram Checkout could help Pinterest increase the value of those ads through higher conversions and increased engagement.

Snap

Snap has been trying to edge its way into social shopping by using advanced camera and image recognition capabilities. 

It partnered with Amazon in 2018 to offer visual search capabilities within its app, sending users to Amazon’s marketplace whenever they Snap an item they’re interested in buying. Pinterest offers a similar feature, as does Amazon’s app.

Google

Google is currently giving an AI upgrade to its Collections feature — basically, Google’s own take on Pinterest, but built into Google Search.

Collections feature that launched in 2018 lets users save any type of search results – images, bookmarks or map locations – for later use, into groups called “Collections.”

Google Shopping is getting a redesign with several new features, including options to shop local stores, track prices and even find style inspiration through Google Lens. Already, Google Lens’ smart image recognition technology can help identify objects, translate text and find similar items. Using a photo of an outfit a user likes – for instance, something you found on Instagram – Google Lens will be able to pull up other “style ideas” from around the web.

Takeaways On Instagram Checkout

It is safe to say that Instagram Checkout will impact and change the following industries:

  • eCommerce
  • Advertising
  • Payable services
  • Social media

This feature will inevitably change the users’ landscape as well, as Instagram already helps the majority of people make informed decisions when purchasing online. 

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