What does Instagram checkout mean for your business?

Written by Phil Birss: Group CEO.
· 5 minute read

As of right now? Not a great deal. At least not unless you’re one of the 20 selected retailers like Nike and Uniqlo who have been granted early access.

Obviously that’s not what you’re here for though, so here’s a look at how it might affect your social media marketing in the not too distant future…

Firstly, what is Instagram Checkout?

In effect, Instagram Checkout allows Instagram users to purchase from their favourite retailers without even leaving the app. To make the process even smoother, Instagram Checkout will store users details after their first transaction so they don’t have to re-enter them every time they want to make a purchase. 

Instagram Checkout will look to provide the whole ecommerce experience by allowing customers to track, manage and return their purchases through the app, as well as provide customer service functionality. 

Sounds great, what’s the catch?

The most likely catch to Instagram Checkout is likely to be the issue around commissions. Let’s face it, nothing Facebook does is out of the goodness of their hearts, they’re a massive global business with shareholders to report to, so at some stage they’re going to be looking to take their own slice of the pie. The important question will be how their charges compare to those of incumbents like Stripe and PayPal.

There is also the potential dilemma of ultimately paying Instagram twice for the same customer, once to promote your products via ads within the platform, then a second time covering the transaction fee. This isn’t too dissimilar to the current model of paying Facebook or Google for ads and then paying a transaction fee to a third party payment provider, but will certainly test the patience of some marketers who resent paying the same platform twice.

Other potential issues to consider are largely going to come down to data. Firstly, how marketers will track and match up data given they may have to use multiple platforms to report revenue from, especially if they’re used to using Google Analytics exclusively for reporting. There’s also the thorny issue of customer data and whether Instagram will share this with companies, or if it is retained within the platform, thereby impacting marketing databases.

Given Facebook’s propensity to promote it’s own native features, there is also the possibility that those retailers utilising Instagram Checkout may be favoured by the platforms algorithms. This is something that we as marketers will have to keep a close eye on to ensure that we don’t end up falling behind competitors.

It it even worth bothering with then?

Despite the potential hurdles (and costs) posted by Instagram Checkout, I would still recommend strongly considering implementing the platform when it is fully rolled out. The most obvious reason being for its ability to reduce friction in the customer purchase journey. 

Not only does it allow Instagram users to make a purchase without having to leave the app and wait for a website to load, but if they have already bought something in the app then they don’t need to go looking for their card to enter their details again. This will not only reduce drop outs during the checkout process, but also likely increase impulse purchases, especially for FMCG products.

It will also be interesting to see how Instagram Checkout caters to influencers and their link ups with brands. If Instagram can create a smooth experience to integrate the platform with influencers content then it could be an absolute game changer for influencer marketing and help brands better understand their return on investment on the channel. 

Instagram Checkout also provides influencers and businesses with a much better opportunity to monetise their visual content. By reducing the friction in the purchase journey, and being able to more closely track how content impacts sales, there is a great opportunity for brands to better understand the importance of producing quality content to share with their audience, whilst also helping to encourage the FD to loosen the purse strings (we can dream can’t we?). 

The other factors largely rely on Facebook using the data in the right kind of way. Firstly, will they actively promote brands who utilise Instagram Checkout over those who don’t if so it makes sense to get on there from day one. Secondly, will Facebook be using this data to improve the personalisation in the right way. Will they ensure that they increase the relevancy of organic content and ads? Logic would suggest so, in which case it’s a win for everyone involved.

So what do I do?

Not a lot right now. There’s always the risk that Instagram Checkout could fall flat on its face like every other attempt by social platforms to create native shopping experiences. That being said, Instagram has come the closest to being able to facilitate transactions within the app itself with the introduction of ecommerce features such as product tagging proving significant more successful than the efforts rolled out by other platforms. 

I know it’s not much of a conclusion at this stage, but given none of us (unless you’re the Marketing Director at Nike, in which case give us a bell, I’ve got some great ideas for you) can actually use Instagram Checkout at this stage, we kind of just have to wait and see. That being said, from past experience it is always worth investing in new features released by Facebook early on.