Instagram has stepped up its monetisation game again with the March 19th launch of a new online shopping feature. Users of the image-focused social media platform will now be able to buy products directly within the app and with a single tap. For now the launch of the new feature has been restricted to the USA but can be expected to roll out internationally relatively quickly, barring any unforeseen problems.
For now, the new in-app shopping feature can be considered to be in something of a beta-phase and is restricted to the products of 20 brands. These include designer labels Prada, Dior and Burberry as well as beauty brands NARS and KKW Beauty. More brands should be brought on board quickly and eventually it can be presumed any approved retailer will be able to market and sell their products the feature.
So, how does it work? Referred to as a ‘checkout feature’, users will be able to select items from Instagram posts and pay for it in a single process. Until now it has been necessary for shoppers who spot a product they like in photographs on the app to click through to a retailer’s website if they want to buy.
One of the key elements to the new e-commerce function is protected payment information. Users are able to store their card details securely so it isn’t necessary for them to enter details for each purchase. Amazon already makes use of a similar system.
Of course, Instagram will receive a fee from retailers for any purchase made directly through the app. This can be expected to provide a significant long term boost to the social media’s revenue model. Despite a huge user base, Instagram has, like most social media platforms before it, taken some time to arrive at an effective monetisation model for its traffic. Direct e-commerce rather than ads has always been the target but it has taken some time for the relevant features to be developed and integrated in a way that isn’t intrusive or a negative to the user experience.
The strategy appears to be working. Last year around 90 million users a month tapped product posts to learn more details about items for sale presented through images published on Instagram. That has risen to 130 million users a month this year. Instagram users appear to welcome the addition of increased shopping features, rather than be put off by increased commercialisation. Which is good news for the future sustainability and growth of the increasingly influential social media.
This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.