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What Shopping on Instagram Means for Social Commerce

We’ve long understood the transformational impact that mobile devices have had on the shopping experience. Truly, mobile is more than just a channel. It has allowed customers to search for products and services in real-time, and conduct research to support in-store buying decisions. While this has resulted in an exciting new opportunity for consumer brands, it has also added a layer of complexity in the buyer’s journey. To lower the amount of touch points required to take a user from the point of inspiration to the point of purchase, smart brands have expanded their use of social, recognizing it not only as a place to drive engagement, but conversion and revenue as well.

This week, Instagram made an announcement to enable this trend further, introducing a new shopping functionality that will allow brands to create more comprehensive content experiences within the app. These experiences will support users’ need to research products that interest them, and will drive purchasing capability within the app. According to the company’s blog post, “While browsing and discovery is easy on mobile, finding more information about the specific products you see isn’t always as simple. On a platform known for its power of mobile discovery, today we’re excited to announce an easier experience to shop the products you love on Instagram.”

The initial launch will feature 20 US-based retail brands, including Abercrombie, Macy’s, and J. Crew.

At Olapic, we’ve long been partners with both Instagram and Facebook, and support social commerce through our Tapshop tool. We see this as a fantastic announcement for Instagram, and have three specific reactions to the news that we’d like to share with our audience.

Finally — It has been a long time coming!

We, as an industry, have been waiting for this for a long time. As social shopping has had its false starts while the marketplace adapts, Instagram is uniquely positioned to make social shopping work in a powerful context. In an article for recode, author Jason Del Rey echos that sentiment, saying, “these moves have been a long time coming for an industry that has been talking about this possibility for years.” At Olapic, we’re hopeful that this will create a more streamlined experience for customers and brands, which will increase the conversion rates that our clients achieve using our product, Tapshop.

This is only the beginning.

We expect this to be a critical moment in the maturity of social commerce, but it is only the start of what is possible. For now, Instagram will be hosting the product detail page (PDP) of the product being sold, similar to how Instant Articles are hosted by Facebook. If you want to buy it as a user, you’ll then be taken to the mobile site of the respective brand. This means that the process is inherently manual. If Instagram ultimately wants to own the entire funnel, and profit from the transactions, it will need to integrate with the inventory management system of every brand it integrates with, which is nearly impossible.

Additionally, if brands are able to tag products to other content formats, including both video and dynamic animation like Olapic’s Content in Motion, there could be even larger opportunity to expand the reach and impact on the shopping experience. Either way, it’s clear that there will need to be continued innovation to optimize Instagram’s shopping functionality.

How will Instagram monetize the offering?

We touched on this briefly, but it is still a key question for Instagram moving forward. Today, brands still maintain organic reach on the platform, which is not the case on Facebook any longer. Facebook is monetizing Instant Articles by selling ads against them using its publisher network, which is not a direct option here. Instagram must decide between a few directions, including integrating with comprehensive inventory management systems (which is not as scalable) or adopting a practice of paid reach for brands, which seems like the more logical option. The company has already taken the first step toward the latter direction by switching to an algorithmic feed. As Instagram rolls out the ability to turn tagged images into ad units, it will also enhance the market for complementary services like scheduler or publisher tools.

As Instagram and broader social commerce continue to evolve, we’re excited by the growing capability of customers to both inspire and drive conversions for the brands they love. The combination of technology and changing consumer trends and priorities is leading us to a new marketplace, and smart brands will need to adapt accordingly to thrive.

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