Key takeaways:
- Starting in beta on 9 May, users will be able to purchase products featured in some influencer posts without leaving Instagram.
- An estimated 80 per cent of fashion, luxury and beauty brands work with influencers. An influx of transaction data will change who and how brands work with them.
- E-commerce isn’t seen as a major new revenue stream for the company. Rather, showing Instagram drives sales is designed to bolster its $9 billion advertising business.
It’s been four years since Eva Chen left magazine publishing to become director of fashion partnerships at Instagram, and now it’s adding a feature Chen wanted even before her tenure began: the ability to buy an influencer’s outfit directly on the platform.
Starting 9 May, US users can tap on a photo of influencer Katie Sturino to see that she’s wearing a $45 TechSweat crop top from Outdoor Voices in size XL, check out other influencers who have worn it and buy it without leaving the app.
This follows last month’s rollout of Checkout on Instagram, which allows users to make purchases from select brands within the app, as well as announcing a new advertising product that invites brands to promote influencers’ posts. Allowing users to shop from influencer posts was the natural next step.
Initially, users will only be able to shop the posts of about 50 influencers and publishers — “creators” in Instagram parlance — including Chiara Ferragni, Gigi Hadid, Kim Kardashian West and Vogue (which, like Vogue Business, is owned by Condé Nast). The Checkout function will only work for US users purchasing from about 20 brands involved in the beta, including Nike, Dior and Warby Parker.
“This is just the beginning of innovation for Instagram in terms of shopping,” Chen tells Vogue Business.
The feature promises to help influencers close the loop between inspiration and purchase, and to help brands better assess just how much their influencer marketing spend is converting to sales. (Nearly 80 per cent of fashion, luxury and cosmetic brands work with influencers, according to Launchmetrics estimates.) Product-specific tagging will also help the 130 million people who tap product tags every month more quickly identify — and potentially purchase — those products, Chen points out.
According to Chen, Instagram has built a “large” Shopping team, who are releasing new features every quarter.
This doesn’t mean that Instagram sees e-commerce as the future of its business. Rather, the goal is to make its advertising products more attractive by showing that they can drive sales. In Facebook’s last earnings call, Mark Zuckerberg maintained that advertising would remain the company’s source of revenue “for the foreseeable future”.
“Commerce, at best, is an ancillary revenue stream,” says eMarketer principal analyst Andrew Lipsman. “Even if it’s $1 billion, it certainly won’t displace advertising” — which, for Instagram, was $9 billion in 2018.
The company will have to work to appeal to advertisers without alienating users, who are increasingly pushing back against like-driven culture.
Chen acknowledges that Instagram has changed. “We all know the classic shot of avocado toast, a little cappuccino situation and a perfect pair of designer sunglasses on a white marble countertop. There is nothing wrong with that image, but there was a point where there was a lot of that,” Chen admits. “What I’ve seen is talking a lot more about what they went through to make that avocado toast.”
It also remains to be seen if an indifferent “like” will convert into an enthusiastic “buy.” Chen thinks it will — even for high-ticket purchases.
Luxury brands have been “insanely eager and flexible” to integrate Checkout, she says, pointing to an Instagram-savvy class of designers that includes Louis Vuitton’s Virgil Abloh, Burberry’s Riccardo Tisci and Pyer Moss’s Kerby Jean-Raymond. “When Kerby does a drop with Reebok, it sells out within minutes,” Chen says. “He’s been incredibly astute in the way he uses Instagram to sell new product.”
Lipsman, of eMarketer, foresees a somewhat narrow “sweet spot” of what people will buy on Instagram: “It has to be a differentiated purchase but a low consideration kind of purchase, and there’s not a lot of overlap.”
Last September, Burberry began monthly limited-edition product drops on Instagram and WeChat, testing items such as T-shirts, keyrings, streetwear and leather goods. Its £990 Small Title bag, part of the February 2019 drop, was the most expensive so far, and it sold out in the Americas within hours. The brand is seeing “great results”, says Rachel Waller, Burberry’s VP of digital marketing, who says that adding in Checkout will make the process smoother and quicker.
Jimmy Duvall, the Chief Product Officer of BigCommerce, whose software enables brands to use Checkout, says more seamless conversions will lead to more effective advertising. An influx of transaction data will also require brands to adjust their marketing strategy and spend.
Revolve, which is known for its strong ties to influencers, has already seen an increase in engagement as it ramps up posting frequency with shopping tags, says marketing manager Alisa Harada, who adds that the data and insights about shopping habits will continue to inform digital marketing strategy. “We only expect things to pick up as new features are added.”
“In the last four years, the demand for creators and questions from businesses around fashion creators has increased. People are seeing that influencers are doing exactly that: influencing,” Chen says. “And there is room at the table for everyone.”
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