While social selling is a clear winner with consumers, it isn’t necessarily a win/win for brands and retailers. Gita Samani, Digital Consultant at Astound Commerce UK looks at the benefits and trade-offs of selling through Instagram.
It was difficult to ignore the fanfare when Instagram launched its much-anticipated Checkout feature recently. The latest platform update means Instagram devotees can now buy products direct from organic posts, simply by tapping a big blue “Checkout on Instagram” button on screen. Payment and delivery details are saved making future purchases super simple.
Until now, Instagrammers who wanted to buy were directed to a pop-up web view of a retailer’s site, which for many shoppers was little more than a frustrating journey down a cart-abandonment rabbit hole.
The benefits of the latest update don’t start and end with the checkout button. After placing an order, consumers can use the Instagram app to view their order status, the estimated delivery date and tracking number, as well as cancel orders, initiate a return, or request additional support.
With one deft stroke Instagram has swept away a whole world of friction, finally making the social platform a fuss-free place to shop.
Instagram says that prior to the launch of checkout, 130 million users tapped on product tags in shopping posts every month, so the increase in conversion rates heralded by seamless social commerce are potentially huge. And if you are in any doubt how compelling Instagram Checkout has been for brands, you just need to read through the list of 20 companies that signed up at launch. This rollcall includes the likes of Nike, Adidas, Dior, H&M, MAC Cosmetics, Michael Kors, Prada, Uniqlo, and Zara.
Making serious trade-offs
But for all the hype, Instagram Checkout still isn’t a slam dunk for brands and retailers. In fact, selling on the social platform is shaping up to be a risky business. That’s because to buy into the Instagram ecosystem, retailers and brands are having to make some serious trade-offs.
As Amazon sellers know, when you sell on someone else’s platform you must play by their rules and this means relinquishing control of your customer’s shopping experience and this reflects on your brand.
The first of these trade-offs is that brands and retailers are having to surrender a large slice of their hard-won brand equity. Customers who purchase goods through Instagram Checkout are effectively Instagram’s customers, not the brand’s. Instagram has made it clear that the platform will only share with brands the information necessary to fulfil an order. Brands aren’t even guaranteed a customer email address as customers will have to opt in. In an era when data is pre-eminent, that could be a bitter pill to swallow.
Clipping brands’ wings
And that’s not the only way a brand or retailer has their wings clipped by Instagram Checkout. On their own website they can do whatever’s necessary to boost average order value. This may include up-selling, cross-selling and intelligent discounting. None of this is currently possible with Instagram Checkout. The platform may add greater functionality in future, but it’s unrealistic to suggest social selling will ever offer the flexibility and agility of your own standalone website.
Instead, brands in the same space, such as Nike and Adidas, will be pitted against each other in a marketplace where they have a fairly limited ability to differentiate themselves from the each other as far as customer experience goes. What’s more, Instagram controls the customer experience and will optimise it to suit its interests, which might not necessarily be aligned to the interests of brands.
Many brands are already lavishing big budgets on Instagram-focused influencer marketing campaigns that they hope will drive sales. High conversion rates could make Instagram Checkout especially enticing to brands eager to see ROI from their social media investments. But the flipside – this inability to own customer experience, as well as customer relationships themselves – is a huge price for brands to pay.
Loading the odds in favour of Checkout users
Additionally, Instagram says that interactions with Instagram Checkout will be factored into the algorithm that determines which content is displayed to users. Reading between the lines, this suggests that brands using Checkout could, under certain circumstances, see their content treated more favourably in Instagram feeds.
Just like Amazon, or any other channel, Instagram can be a great way to supplement your onsite sales. But as always, the best thing to do is to invest in your own website where you can grow your email list, put steps in place to reduce cart abandonment, and drive people back to your store with automated cart recovery emails.
And lastly, you can fully own the end to end experience – ensuring your customers have a positive and lasting impression of your brand that will keep them returning and referring their friends and family.
By Gita Samani