Instagram's new checkout feature allows users to shop in app
The checkout line is now open on Instagram, with consumers now able to buy products from select brands including Nike and H&M without leaving the app.
On Tuesday, Instagram announced its new "checkout" feature, which means shoppers won't need to visit the retailers' websites to complete a purchase. Some analysts cautioned against a slippery slope in which brands cede too much control of the experience to the platform, though.
Instagram says the program is still in the testing phase, and won't be open to all retailers. For now, Nike, H&M, Revolve, Adidas, Kylie Cosmetics and Zara are among the first group of brands with this new power. Shopping and checkout features are not available in ads, and can only appear in unpaid posts and Stories, which are the videos that disappear in 24 hours.
"The vision is to ultimately have checkout be available to any of the business on Instagram," says Layla Amjadi, product manager on Instagram Shopping. "The whole goal here is to finally fulfill one of the biggest asks we've heard since the inception of Instagram Shopping."
In 2016, Instagram launched the first shopping features—digital price tags that retailers put on images of products in photos and videos and a "shop" button that linked to the web to purchase the items. The checkout is the next step in that evolution of Instagram's e-commerce ambitions, fulfilling the whole customer experiences from discovering the products to buying them.
Instagram is trying to compete in the online retail ecosystem that is filled with rivals from Google and Amazon to Pinterest and Snapchat. Amjadi would not say how many people have made purchases through Instagram Shopping in the past couple years, but she says that 130 million people click on shopping tags every month.
The ability to facilitate the transactions is an important component to advance shopping, because Instagram will be able to retain the credit card information provided by consumers. That means that follow-up purchases become even easier, eliminating the most cumbersome step of entering credit card details. Amjadi says consumers will have the option to save the credit card details or delete them from the system.
Credit cards can be a tough ask for digital platforms, especially with consumers concerned about security and privacy. Facebook, which owns Instagram, has raised concerns about the type of data it collects and how it shares that information with third parties like retailers and advertisers.
Amjadi says that consumers will need to use a pin number to finish checking out as an extra step of security, and also the retailers will only have access to the name and address of the shoppers in order to fulfill the orders. It's up to consumers if they want to include loyalty program information and e-mail addresses.
"We will only share information that is absolutely necessary to get the product delivered to you," Amjadi says.
Retailers could be wary of Instagram because they won't have that direct ownership over the customer relationship. The customers can choose to share their loyalty information and e-mail, but if they don't then the retailer can't retarget them online later.
Michael Froggatt, director of intelligence at Gartner for Marketers, says that brands should use Instagram for generating interest in their products but be careful when it comes to ceding control of the entire sales process.
"Instagram is a lightning fast awareness builder, but the final sale still relies on a handoff to the brand site where the user data can be collected, analyzed and retargeted," Froggatt says. "A fully integrated find-to-buy Instagram would sacrifice the handoff, and resulting data, for speed, which for most established brands, is too big of a risk to take without ironclad data sharing agreements."