Over the last year, Instagram has been zeroing in on the e-commerce market. In late March, 2019, they announced Instagram checkout, a payment feature that will allow users to pay for purchases in-app.
It’s a huge leap forward for a social platform that has only recently made its e-commerce debut. Selling on Instagram become possible last September after Instagram implemented product tagging. Now with checkout, users will soon be able to browse, select, and pay on the same platform. What does that mean for Instagram retailers or e-commerce businesses?
What will Instagram checkout look like for buyers and retailers?
Easy, breezy, beautiful – in theory. There’s no word yet on how users would add multiple items to a basket (to avoid doubling-up on shipping costs) or manage baskets across multiple stores.
And Instagram hasn’t yet confirmed the cost of the feature, whether there’s a flat fee with every purchase or if Instagram would take a percentage commission. The latter could be an issue for luxury retailers with big per-item price tags. However, the brands that are lined up to trial the feature in the US are no small fish. They range from Uniqlo and H&M to Balmain, Prada, and Burberry (by way of a few Kardashian brands, KKW and Kylie Cosmetics).
An Instagram rep revealed to TechCrunch that the fee “will not change the price of the items for consumers”, implying that the retailer will absorb the cost of the transaction rather than the buyer.
The checkout feature is run through PayPal for security reasons and features a clever buffer to prevent mistaken purchases, giving users a short window of time to go back and cancel impulsive or mistaken orders. It’s reported that PayPal will also allow both retailer and buyer to handle all the related purchasing admin in-app too, including organising returns, tracking the status of their purchase, cancelling orders, and seeking customer support.
Gabbi Johnston, the founder of digital marketing firm Gabbi J Digital, says Instagram is reacting to the demand for convenience in the online shopping flow. “At the end of the day, customers are a little lazy. Being able to give them that [..] access to the checkout, without ever having to leave Instagram, it’s going to be great,” she says. “For businesses, being able to connect with their audience on Instagram where they already are and giving them the opportunity to go through the whole checkout process without having to leave the platform is going to be absolutely fantastic.”
Gabbi touches on a fundamental truth about human beings: if we’re forking over cash, we want it to be as easy as possible to do so. Keeping the buyer in-app for the entire shopping process, from discovery to delivery to after-purchase support, is a no-brainer.
Siloing your revenue stream is risky
This may be obvious, but consider this: when doing business through Instagram, you’re relying on them for technical support. And when things go wrong, they go so wrong. Gabbi says, “It’s definitely something [to] consider. Particularly if we have another incident like we did a while ago when Facebook and Insta were down… that’s a whole day’s worth of business you could miss out on.”
Facebook and Instagram have been mired by several dangerous security breaches over the years. The most recent was in September of last year when up to 90 million Facebook accounts and their associated personal data were compromised. Your brand’s reputation and the security of your customers is tied to the reputation of the big brand you’re associated with.
All that said, if you’ve considered the risks and still think Instagram is the e-commerce platform for you, you can register your interest here.