Should Retail Brands Use Instagram Shopping to Maximise E-Commerce Performance?

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Article Credit: Performancein.com

As the ongoing high street crisis increases competition in the online retail space, retail brands are increasingly trying to reach their audiences where they are – which seems to be on social media. In addition to the ever-increasing drive towards convenience in which customers now expect a more seamless shopping experience, shopping directly through social media seems like the logical next step from shopping on a retail website or mobile app.

When it comes to brands engaging with audiences, visual platform Instagram is at the top of its game. The platform now has one billion users worldwide, 80% of which connect to a business voluntarily. Furthermore, Insta’s biggest audience is millennials and Gen Z with 64% of those aged 18-29 using the platform.

Retail brands are starting to pay attention; more than one million brands are sharing and promoting their products on the social networking app, according to research by SmartInsights, and twice as many brands are posting to Instagram Stories than they are rival Snapchat Stories.

This is all thanks to Instagram’s e-commerce features that allow worldwide brands to promote their products via Instagram accounts, gather feedback, retain customers and entice them to purchase from their website, making it vital for retailers to consider using the social media powerhouse to maximise their e-commerce performance.

Ideal for shopping?

With this in mind, Instagram has been helping to connect audiences and brands for some time,  becoming the ideal platform for shopping. Instagram first introduced in-feed shopping in November 2016, before becoming more e-commerce friendly after launching shoppable product stickers on posts in May 2018, which allows brands to tag products in their post with prices and links for purchasing.

Although it’s currently being tested by selected businesses around the world, this feature offers brands greater opportunity to connect with consumers thanks to the ability to see relevant information about a brand’s product with a single click. Through creative ad formats and immersive product experiences, the platform is helping retailers stand out and inspire action like never before.

For example, American-based lingerie and clothing brand Natori has seen glowing results, stating that using shoppable posts increased its Instagram traffic by 1,416%, while Magnolia Boutique noticed a 20% increase in Instagram revenue – proof that if done right, true measurable results can be achieved.

Instagram Stories

Realising that there are additional avenues for brands to drive sales, most recently in June 2018, Instagram expanded shopping beyond the feed to Instagram Stories, enabling brands and influencers to add clickable shopping bag tags to posts, which reveal more information, prices and links for purchasing. It’s fantastic for brand product narratives, as the path to purchase becomes more sophisticated and engaging.

In addition, brands can include a call to action for selling products using the “swipe up” feature, transporting users to an Instagram post, account or website. However, there is a limited window of time to drive sales via Stories as photos and videos posted to Stories disappear after 24 hours.

Publishing on Stories brings immediacy so audiences no longer need to search for something they’ve seen on a different platform, encouraging users to spend longer on the platform and visit it more frequently. Increasingly users can stay in the know with brands they love and get an insider view of products they like, viewing posts and videos that inspire as much as they drive results.

According to data from Instagram, the research found that a third of the most viewed Stories on Instagram come from businesses, proving that it’s a powerful discovery tool. Take H&M’s new sister brand, Nygen for example, which targeted millennials using Instagram polls on Instagram Stories to inform its clothing designs and create a buzz around the new products. The brand boosted conversion by focusing on user-generated content with more measurable metrics as opposed to focusing on more traditional campaigns.

When commenting on how Instagram has improved American brand Spearmint Love’s e-commerce performance, Shari Lott, founder and CEO said that shopping on the platform “accomplishes one of the most critical tasks in improving commerce performance: it makes it easier to buy.”

Utilising influencers

Furthermore, influencer marketing is becoming the fastest-growing online customer-acquisition method. Due to their vast following and presence, influencers are able to connect their audiences to brands, making them seem more approachable. Influencers can incorporate a call to action on sponsored posts, which not only provides value to their followers but helps brands acquire new consumers quickly.

Instagram influences around 75% of user purchase decisions – much higher than any other platform – and data from Sprout Social revealed that 80% of influencers prefer Instagram for brand collaborations over any other channel.

Influencers can build a loyal community, making the promotions feel more organic. Posts often lead to soft sell; when users don’t think they’re being targeted, they’re more likely to purchase. Plus, user-generated content has a 4.5% higher conversion rate, which increases to 9.6% if they interact with the photo.

Is it all worth it?

Instagram’s new commercial tools and shopping features have created a more seamless shopping experience, much to consumers delight in searching for convenience. Dave Gilboa, CEO of online retailer for prescription glasses Warby Parker praised shoppable content for making social marketing more streamlined. Instead of convoluted explanations of what the image contains, and respective prices, or having the community ask about pricing or availability, shoppable postsmake all that information a self-serve, actionable experience for consumers.

Earlier this year, UK online fashion and beauty retailer ASOS has sung Instagram Stories’ praises, saying the number of people viewing its content on the platform almost doubled in just six months. It even managed to cut costs thanks to “digital marketing efficiencies and a high return on advertising spend.”

ASOS CEO Nick Beighton said in an interview with The Drum that “on one level, Instagram Shopping could turbocharge the experience for 20-somethings but on another level, it could be a real threat.”

The threat Beighton indicates could lie with retail brands streamlining the process in a bid to sell more, creating a throw-away culture as consumers feel like they have to constantly buy new products in order to stay at the top of their game. Purchasing this way could be seen as turning impulse into cash, although Instagram said these options are about turning “discovery into action.”

“Instagram users are savvy and use the platform for inspiration for the latest trends and must-have products,” commented Rakhee Jogia, VP of strategic partnerships and supply at Rakuten Marketing.

Jogia continued that there’s already a desire for users to shop directly on the platform with several actively using functions such as rewardStyle’s ‘LiketoKnow.it’ to purchase products they find on Instagram.

Nonetheless, Jogia agreed that Instagram is creating a more seamless shopping experience for retailers and consumers, adopting multiple strategies such as hashtags and video campaigns, socialising their websites, leveraging social Stories and utilising links in product feeds to connect audiences with brands.

“They are responding to changing customer behaviour and the desire for visual and user-generated content,” said Jogia; “Instagram understands that their users use the platform for discovery and making impulse purchases. They have removed friction in the buying process by allowing purchases to be made within the platform.”

However, Instagram’s most recent features based on the user responses, like the mute button, indicate that perhaps everyone is becoming a little overwhelmed?

In terms of using Instagram as an e-commerce platform, some retail brands have been hesitant to ‘sell’ on it, with Jogia highlighting some the key challenges they often face, for example, with data management. Jogia adds that consumers may be concerned about Instagram’s payment process and whether their data and payment details are secure.

“Brands need to ensure their back-end operations and customer service team are set up for sales and enquiries from Instagram Shopping. They need to provide a seamless retail experience to consumers which mirrors the website,” she said.

Furthermore, Jogia suggests that retailers should be more open to testing, integrating the shopping experience in a way that feels organic to the brands’ audience and adds value to them.

“Keeping the customer at heart is key as the platform becomes more commercial,” said Jogia.

What’s next for Instagram Shopping?

Instagram Shopping and the platform’s e-commerce features make it a great channel for retail brands to drive highly relevant engagement and provide opportunities across the entire buying journey. In order for retailers to raise brand awareness and maximise ROI, they should use the right combination of Stories, Feed and influencers to promote products and drive sales. Although, it will be interesting to see whether influencers can fully integrate Instagram Shopping via the affiliate channel.

“Instagram Shopping reflects the ever-changing way consumers discover products and spend their time online, which continues to shift to mobile. Allowing all stages of the buying process to happen seamlessly within Instagram will ultimately only improve the customer experience,” concludes Jogia.

Reportedly, Instagram is considering developing a standalone app for retailer brands going forward, which would enable the platform to maximise the potential of shopping without annoying current Instagram users’ experience and pushing too many promotions on the main app. The future certainly looks bright for Instagram Shopping.

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