Social Commerce: Is Instagram the Future of E-Commerce?

Social Commerce: Is Instagram the Future of E-Commerce?

Since 2010, Instagram has transformed from a simple photo sharing platform to an influential marketing channel. As of September 2017, Instagram has over 800 monthly users and 2 million brands actively advertising.

Alongside this growth of activity, Instagram has been softly introducing commerce capabilities.

In November of last year, they announced that they would test shoppable tags. Previously Instagram only enabled brands to promote products using a paid ad format. With this new feature, brands can directly send users to product pages via tags on regular content.

This was initially tested with a handful of apparel, jewellery and beauty brands — like Kate Spade, Michael Kors, Macy’s and Warby Parker. However, recently Instagram announced that they would be opening the pilot programme to thousands of US retailers.

While social commerce hasn’t been entirely successful in the past (who remembers Twitter’s short-lived buy now button?), Instagram could change this. 

A source of discovery

Instagram already plays a vital role for brand and product discovery among many Millennials and Gen Z’ers. In fact, 30% of Instagram users have bought something they first spotted on the channel, whilst 83% have been influenced by a friend’s post about a brand.

While older generations are still dominantly influenced by magazines, a new wave of youthful shoppers are turning to this online channel for influence, inspiration and discovery. 

Seamless e-commerce experience

With young consumers utilising social media to fuel the discovery phase of their customer journey, brands implementing social commerce functions will arguably provide a smoother online shopping experience. This is reflected in Macy’s use of Instagram shopping tags, with their Director of Social Media, Tessa Kavanaugh, stating that Instagram’s shopping capabilities perfectly align with Macy’s strategy of creating a frictionless shopping experience for customers”.

Through Instagram shoppable tags, Macy’s have streamlined the journey from discovery to conversion.

Converting Instagram Engagement.

Until now users have been restricted from driving traffic to a website from Instagram beyond including a singular url in their bio section. Arguably this has impeded emerging brands like fashionable watchmaker MVMT — who rely on leveraging Instagram to nurture their community — from converting on engagement.

However, MVMT recorded significant success from using Instagram’s beta shoppable tags. In fact, their Chief Marketing Officer Ryan Dell reported that they had more than 30% click-through to shop — with the experience making it easier for potential customers to find products and learn key details such as cost and how to purchase.

Final Say

While shopping via social commerce has gained tractions among leading Asian platformslike WeChat and Line, the e-commerce experience in the West is still rooted among long-standing online retailers like Amazon.

However, with smartphones expected to account for 34.5% of total e-commerce sales this year, mobile-first platforms like Instagram could pave the way for a new form of e-commerce.