March, 21^th, 2019

By Anna Chertkova

Facebook-owned platform became a huge digital shopping mall, having launched on March, 19^th, 2019 “Checkout with Instagram” with more than 20 top brands making it possible to shop favorite labels without leaving the app, thanks to stored payment info.

Below are the 5Ws and 1 important (know)How on InstaShopping.

Who: over 20 top vendors in the US

Adidas, Anastasia Beverly Hills, Balmain, Burberry, ColourPop, Dior, Huda Beauty, H&M, KKW Beauty, Kylie Cosmetics, MAC Cosmetics, Michael Kors, NARS, Nike, NYX Cosmetics, Oscar de la Renta, Outdoor Voices, Ouai Hair, Prada, Revolve, Uniqlo, Warby Parker and Zara.

What: online shopping instead of window shopping

A new online shopping feature launched on March, 19^th in beta-version for US users allows to buy products directly off the platform, thus untapping a new revenue stream for the photo-sharing platform.

“We’re introducing Checkout on Instagram,” the Silicon Valley based division of Facebook said in an online post. “When you find a product you love, you can now buy it without leaving the app.”

Tapping the checkout button will allow shoppers to select options such as size or color and then pay for items without leaving the Instagram app. Previously, people inspired to buy products featured in Instagram posts had to follow links to outside online shopping sites. For now, only organic posts from the launch partner merchants will feature Checkout buttons, and ads aren’t eligible.

When: 2019, the year of changes

According to the Financial Times, Instagram has been taking steps to develop its shopping offering over the past year, perfectly in line with the intentions of Facebook’s chief executive Mark Zuckerberg who voiced his plans to focus in 2019 on monetising Instagram and WhatsApp, apps it bought in 2012 and 2014 respectively.

Besides, Instagram plans to roll out the feature with more vendors “in coming months”.

Where: in-app shopping Checkout

Checkout tags appear on feed posts, Stories and Explore content from the brands in the closed beta that Instagram plans to eventually open to more businesses. When users tap the post to reveal product tags and open one, they’ll see a Checkout with Instagram button instead of the old “View on Website” button.

After users buy something within Instagram, they’ll be able to track it from a new “Orders” section of their profile that shows the status of an order, plus options to cancel, initiate a return or contact the merchant. They’ll also received a notification from Instagram when the order ships.

Why: Checkout-equipped Ads to turn to a gold mine for Instagram

Facebook makes the bulk of its money from digital advertising but has dabbled with e-commerce in the past (Messenger service as a communication platform for shops or brands to connect with customers) having spent five years experimenting with different Buy buttons. Just as Mark Zuckerberg declares e-commerce as a priority of the 2019 roadmap, checkout with Instagram could turn to a gold mine for the Facebook owned platform.

Now that Instagram has trapped people’s attention inside (we are talking 77.6 million Instagram users from the US expected to be over 111 million by end of the year), Instagram’s ad business could also get a boost if Checkout with Instagram convinces brands that the social network produces better return on investment because they are fewer steps before purchase.

How: it’s all about money

With the new checkout feature, Instagram will charge merchants a “selling fee” when a sale is made on the platform, calculated as a percentage of each transaction, rather than forcing users to pay a convenience fee for buying through the app.

Users can pay with PayPal, Visa, MasterCard, American Express or Discover. Information entered for an initial purchase will be stored for future use, according to Instagram.

Instagram also plans to allow merchants to integrate their Shopify, BigCommerce, ChannelAdvisor, CommerceHub and other tools with the Checkout feature.

In the meanwhile, Facebook, its parent company, is nursing plans to introduce new revenue streams, including developing its own digital currency to allow payments on WhatsApp, also part of the happy family since 2014.

The future of online shopping is yet to come.