How Retailers Can Capitalize on Instagram Checkout

Total Retail – In March, Instagram publicly announced a new e-commerce feature. Rather than tagging items in posts and redirecting interested parties to an online shop, “Checkout on Instagram” enables brands to sell products to users directly inside the app. The promise is that companies can minimize any extra steps in the transaction process, and therefore decrease the likelihood of abandoned shopping carts. Furthermore, they can better capture consumer interest — while they’re heavily engaged on social media — and thereby increase sales conversions.

Currently, more than 20 brands are beta testing the feature, including Adidas, Burberry, Dior, MAC Cosmetics, Prada, Warby Parker, and Uniqlo. Among these select brands, Adidas has already been generating results. CEO Kasper Rørsted shared on the brand’s earnings call that, in the first quarter of 2019, online sales saw a 40 percent year-over-year jump, which he largely attributes to the new Checkout feature and product launches via the Instagram app.

This makes for a more personalized experience, where people see products that they truly like, which leads to a higher likelihood of conversion —and means increased profits and less wasted ad spend. According to BRP Consulting’s 2019 Real-Time Retail report, 87 percent of customers today want a personalized and consistent experience across all shopping channels.

BRP Consulting’s Real-Time Retail report also notes that 56 percent of consumers are more likely to shop at a retailer that offers a shared cart across channels, yet only 7 percent of retailers currently offer that capability. With Instagram becoming a viable sales channel, there’s an opportunity now to incorporate social media into a greater omnichannelretail experience, where there are no barriers between online and offline channels.
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