Instagram’s Checkout Shows Social Commerce Continues to Grow

Instagram and Facebook

Instagram is launching in-app shopping capability is another sign that social media platforms are getting into the commerce game.

So how does all this impact direct selling? With so many distributors using Instagram as a way to showcase new products and build their own personal brand, it’s only natural to assume they will want to use the Checkout feature. So will direct selling companies ignore, counter or embrace Instagram given so many of their distributors use the platform in some capacity?

In Beta Stage with 23 Brands… for now

The answer will not come for a while. The Checkout feature is in beta stage currently with only 23 larger brands having access to it. It’s still very early and adopting this feature for every brand will take some time, but it—and the answer to direct selling’s willingness to embrace it—will come eventually.

The photo sharing app’s shopping strategy illustrates how non-retail entities such as social media channels are increasingly tapping the lucrative consumer opportunity. But perhaps more importantly, the move also shows how the retail customer experience is evolving beyond the physical store and e-commerce realm and taking increasingly deeper root within mobile device and social media environments.

Social media platforms such as Facebook, Twitter and Pinterest currently boast billions of members and social traffic has increased by at least 357 percent as compared to the same time last year, demonstrating unprecedented growth.

Consumers Appreciate Personalized Nature of Social Media

How has the impressive growth come about? It’s because today’s shopper is more aware and wants a personalized shopping experience. Consumers appreciate the personalized nature of social media and are vastly influenced by social sharing, which encourages a healthy conversion rate on organic traffic. That’s why social media sites like Facebook have one of the highest conversion values in the industry.

What is fueling the social shopping experience on these sites? Positive reviews. Consider this:

  • 71 percent of consumers change their perception of brand after seeing a positive response to a review on social media
  • Conversions increase 133 percent when mobile shoppers see a review that is positive before making an ecommerce purchasing decision

Last year, that power of positive reviews led to record-breaking numbers. Social commerce posted year-over-year increases of 14 percent in revenue, including a record-setting Black Friday and Cyber Monday weekend in 2018. And 91 percent of e-retailers saw an increase in SEO rankings due to social media referrals.

Now Instagram, with over 1 billion active users, is primed to cash in through its Checkout feature by enabling consumers to stay in app to complete their purchases. The app has more than 130 million users tapping to reveal product tags in shopping posts every month, up from 90 million in September. And what sets it apart from Amazon is the product discovery process. Amazon, the undisputed king of e-commerce, pioneered the online platform as payment facilitator to reduce friction in product discovery and purchase, and is now the starting point for anywhere from 40 to 60 percent of product searches. But it is seeing more and more competition from social media platforms that are continually enhancing the customer experience. Case in point: What’s appealing about Instagram’s Checkout feature is that it lets the consumer discover new or different products with relative ease, which is something that is hard to do on Amazon.

The Instagram news and continued success of social commerce underscore the dramatic impact direct-to-consumer brands and buying mechanisms have had on commerce.