POV: Instagram Launches In-App Checkout

Apr 9, 2019

What is happening

Instagram recently debuted a new feature that enables shoppers to purchase products without leaving the app. The program is still in its testing phase and is currently only available to a limited number of retailers, including Nike, H&M, Revolve, and Zara, as well as successful DTC companies Warby Parker and Outdoor Voices. This new feature is not available in ads, and can only appear in unpaid posts and Stories, which disappear in 24 hours.

The update comes as no surprise, as Instagram has steadily been competing in the online retail ecosystem dominated by the likes of Google, Amazon, and Pinterest.

What this means

This feature strengthens Instagram’s position as an e-commerce platform. Prior to this update, many shoppers were frustrated with the fragmented checkout process that required them to switch between apps, webpages, input login and payment information, and so on. The disjointed path to purchase led many would-be customers to abandon the process, continuing to scroll through their Instagram feed in hopes of a more seamless customer journey—or at least, a product worth all that effort.

Now, the experience is significantly improved. With the launch of an in-app checkout feature, Instagram is closing the loop on its e-commerce offerings, making it possible for brands to dramatically expedite the customer journey from product discovery to purchase.

The new feature displays a “Checkout on Instagram” button when the customer clicks on a product tag within an image. Once the customer has saved their purchasing information within Instagram, they will be able to buy products via the checkout button directly, and manage their orders in the app. Customers have the option to save their payment details or delete them from the system.

As additional security measures, customers will need to use a pin number to complete checkout, and retailers will only have access to the name and address of the customer (not their Instagram profile) to fulfill orders. Customers have the option of including any loyalty program information and email addresses.

Industry reaction

Predictably, shoppers are rejoicing over a significantly easier customer experience. In contrast, retail marketers are wary: By hosting the checkout process within their app, Instagram claims some ownership of the customer relationship away from the retailer. As a result, retail marketers may be limited in their ability to collect meaningful customer data to inform remarketing efforts.

Our prediction

“Shoppable” posts on Instagram draw the attention of more than 130 million users each month. That’s a big opportunity for retailers, but the downside of integrating Instagram as an e-commerce platform is that the retailer then loses the chance for engaged customers to browse through other products on the brand’s website, as well as the ability to gather valuable customer behavior data.

Marketers know that customer data is everything. While the viewability and high engagement on Instagram make it an attractive (and likely successful) acquisition platform, marketers need to consider how to compensate for the loss of insight into how those customers discovered their products, other product interests, and overall relationship with the brand.

What IgnitionOne can do

At IgnitionOne, we gather customer data across all engagement channels, working with partners to enable marketers to deliver a unified omnichannel strategy. The IgnitionOne Customer Intelligence Platform enables marketers to build custom audience segments for precise targeting across channels, including Instagram.

Our Customer Intelligence Platform provides marketers with a unified, comprehensive view of each customer’s products of interest, level of engagement, and stage in the customer lifecycle. With these in-depth insights, retail marketers can target their most engaged customers with personalized content on Instagram that features their products of interest.

With Customer Intelligence, marketers reach their most valuable customers with effective messaging at key moments of consideration. When it comes to building an omnichannel strategy that makes the most of marketers’ data, IgnitionOne has the technology to power effective marketing decisions that maximize efficiency and drive customer engagement.

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Learn more about how IgnitionOne can enhance your omnichannel marketing efforts.

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