Instagram Unlocks In-App Purchasing

NEW YORK, United States — Instagram has announced plans for a new shopping feature that would allow users to purchase products within the photo-sharing app, which is owned by Facebook. The beta version, launching on Tuesday, will be tested by brands including Nike, Revolve and Burberry.

The move indicates that Instagram, long touted as a discovery tool, is looking for more ways to drive sales to the platform, which is expected to make up 20 percent of Facebook’s overall revenue in 2019, according to estimates from financial services company, Jefferies. (That could amount to $14 billion, Jefferies said.)

Previously, users interested in a pair of jeans or an eyeshadow palette featured in an Instagram post would be forced to click through to a retailer’s own e-commerce site. With the launch of the new "Checkout" feature, users will be able to tap a product and purchase it without leaving the app. Instagram will make an undisclosed commission on each purchase.

In the past few years, Instagram has rolled out several shopping features that make it easier for businesses and consumers to sell and buy products through the app.

An Instagram spokesperson said that the new feature was a response to the growing demand from brands on the app to better connect with their audiences.

Instagram's updated checkout feature | Source: Courtesy

Businesses have the option to make products shoppable through posts on their feed, in Instagram Stories, or in a designated shopping area in the “Explore” tab. Instagram reports that 130 million people each month are already tapping on these product tags in posts and Stories.

While brands will now be charged a fee by Instagram, allowing a consumer to shop within the app makes the process more seamless, hopefully spurring a greater number of sales than if the user had to click through to another website.

It's no small thing. Instagram profiles are the main marketing and conversion vehicle for many brands, allowing them to directly target consumers with new products and campaigns.

The new feature aims to create a frictionless experience for users shopping in the app, responding in many ways to companies like Shopify, Masse and Storr, which have worked to fill the gaps in Instagram's current shopping model. So far, more than 20 brands, including Dior, Prada and Nars, have been on-boarded for beta testing.

Instagram notes that Checkout is just one feature it has in the works for its shopping experience, with plans to roll out more additions later this year.

Some of these developments have raised concerns with critics, who worry that the app is becoming too commercially driven, potentially driving down consumer engagement. Last year, co-founders Kevin Systrom and Mike Krieger announced their departure from the company, with various sources reporting that they were uncomfortable with Facebook's involvement in the company's rapid commercialisation. This news increased concerns about Instagram's integration with Facebook, leaving many to wonder if the simplicity and organic nature of the app would change with its founders' departures.

With so much sponsored content and promotions from mega-influencers, will new shopping features drive users away from Instagram?

"We were very thoughtful about the evolution of shopping on Instagram. From day one, shopping tools have been an experience that people can opt into if they want to follow and connect with brands on Instagram," the spokesperson said. "Checkout is more than putting a buy button on a post. We took a deep look at what people expect from a mobile checkout experience in 2019. The experience is entirely optional. For people who want to shop, we want to make that as easy and seamless as possible."

For now, Instagram is a crucial direct-to-consumer channel for businesses. However, new changes to how consumers are able to interact with brands always pose a risk to platforms.

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