Checkout, A New Way to Shop on Instagram

Ally Feiam By Ally Feiam | 08 May 2019

Instagram’s new Checkout shopping tool allows users to make direct in-app purchases. How will this affect the future of smartphone shopping, and how we consume online?

The social media platform has gone through rapid changes in the past two years. In early April the social media giant discussed the possibility of removing ‘likes’ from their service, with a heavy focus on its in-app shopping.

Instagram unveiled its new retail space, which allows consumers to make purchases directly from the app itself, rather than going to a third-party website. The service, known as Checkout follows the app’s feature of Shopping in Stories, Shopping Collections and grid videos.

In the past year, the Checkout feature was tested by a few brands who sold items directly to customers, but now it’s developed further. 25 brands such as Adidas, NYX Cosmetics and H&M have initiated the service to customers. The service is currently in ‘closed beta for businesses’ and is only available to residents in the United States.

Retailers who have access to Checkout can tag products in Shopping posts, which directs the shopper to a checkout page. There, they can enter the variables they prefer to purchase, personal and payment details all within the app itself.

“Instead of taking a screenshot or asking for product details in comments or Direct, you can simply tap to see exactly what your favourite creators are wearing and buy it on the spot,” Instagram said in a blog post explaining Checkout.

Across the board, this is considered a ‘game-changer’ for online shopping. Influencer marketing has been experiencing a boom in the last two years, with the likes of Kim Kardashian and other ‘Instagram-famous’ people capitalising on the social media platform to earn an income. The release of Checkout seems to be in their favour.

Instagram’s newest tool may just be the key to getting influencers and brands to maximise revenue. When an influencer partners with a brand in an affiliate post, they can now opt to include tagged products using the Checkout feature. This allows brands to collect data from the influencer about driving consumers to a product, as well as gaining revenue from the affiliated link.

It’s important to note that influencers will not receive cut of the sales from the links in their own posts. However, using affiliate third-party companies such as RewardStyle and Shopping Links, they can.

“We understand Facebook is investing heavily behind this as a priority, and we expect an influx of brands and retailers making their content ‘shoppable’,” Deutch Bank analysts said. “We see the potential for momentum to carry over to core Facebook and Marketplace and potentially even via a standalone shopping app (similar to splitting Messenger).”

Checkout opens the door for other social media platforms to capitalise on built-in shopping features. Instagram’s parent company, Facebook, has already begun trialling their own shopping experience, as predictions state that Instagram could bring in ‘USD$10 billion for Facebook by 2021’. This equates to ten per cent of the platform’s advertising revenue, as Deutsch Bank analysts forecast.

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