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E-Commerce Trends

What Instagram Shop Tags Mean for E-commerce

Last week, Facebook-owned Instagram launched its beta test of shop tags within photo posts to explore whether inspiring visual content coupled with ease of purchase can transform casual scrolling into real e-commerce opportunity.

With Instagram making its platform more friendly to retail brands looking to sell products, rather than build communities, where are the future opportunities for e-commerce marketers? How much potential is there to drive sales from this channel? Here we unfold the possibilities of Instagram’s latest foray into social commerce.

Shoppable Posts Are Here

Here’s a quick refresher of the news on shop tags: As of last week, Instagram has been testing shop tags with 20 U.S. retailers. Shop tags, which users tap to reveal in native posts (outside of ads), allow retailers to tag up to five products with more detail and prices, all with the intention of providing users more information to consider products. Users can then shop the products by clicking a “Shop Now” link that funnels to the retailer’s checkout page.

Shop tags, which users tap to reveal in native Instagram posts, allow retailers in the beta test to tag up to five products with more detail and prices, all with the intention of providing users more information to consider products.

On this initial test, shoppable posts can only be viewed on iOS devices by a group of users in the U.S., but Instagram will explore rolling out shop tags globally and to Android devices. If successful, the social platform plans to make shop tags available in video posts and photo carousels. Instagram hasn’t detailed when shop tags will be made available to more retailers outside of the initial 20 in the beta test.

Instagram Opportunities

With 300 million daily active users, many of whom are millennials, Instagram could prove to be a wealth of untapped opportunity for retailers. According to an internal Instagram study, 60% of users say they learn about products on the app. That’s great news for retailers who are actively posting about products in their feeds already.

Instagram’s users are more receptive to engaging with brands than they may be on other social channels: 68% of users engage with brands regularly.

Instagram’s image format has always made it a popular place for passive consumers to discover retail products shown in context. Users scrolling their Instagram feeds are looking to be visually inspired, and whether that inspiration comes from a friend, an influencer, or a brand is of little consequence to users. In fact, Instagram’s users are known to be more receptive to engaging with brands than they may be on other social channels: 68% of users engage with brands regularly.

Instagram gives brands the opportunity to bring products to life and show them to a warm audience. But before shop tags, users were limited in how much they could learn about products within an image post. Users would be forced to leave their feed to find out more about a product, most often by following an external link in a profile bio. Now with shop tags revealing item name, price, and other details about products within posts, Instagram is giving consumers a path from product discovery to purchase consideration without having to leave their feed.

User Experience First

Rather than rushing to monetize shop tags, Instagram is taking a measured approach to learn its users’ preferences and preserve its user experience. Instagram is striving to match its capabilities with user behavior and make the mobile shopping experience as seamless as possible.

With this buyer consideration time in mind, Instagram plans to make saving products for later purchase available. For retailers, this means Instagram could be a place to spark interest early in the purchase funnel.

From its own research, Instagram has gathered that most mobile purchases typically take more than one day to be completed. During this time, shoppers are considering the product and its features, and they may not be ready to jump straight to a checkout screen. With this buyer consideration time in mind, Instagram plans to make saving products for later purchase available. For retailers, this means Instagram could be a place to spark interest early in the purchase funnel.

Realities of Scale

While Instagram is a boon for product discovery on mobile, most retailers will probably not be rewriting their e-commerce playbooks — at least not yet. The reason? Instagram is not yet positioned to convert customers on a grand scale. With shop tags only available within posts, not ads, most retailers would be hardpressed to generate high purchase volume from impressions served on the channel.

For reliable returns on ad spend and growth, retailers will want to stick to their roots in dedicated shopping channels where users show clear intent to purchase, like in Google Shopping. Ad retargeting formats like dynamic ads, available in both Instagram and Facebook, allow retailers to find and market to users that are most likely to purchase — making those ads a stronger option for generating returns on social media.

Instagram is a boon for product discovery on mobile, but most retailers will probably not be rewriting their e-commerce playbooks for Instagram — at least not yet.

Instagram’s value is that it provides a native, unintrusive way to showcase products to consumers. As an e-commerce tool, however, Instagram functions better as one of a variety of tactics used to generate growth.

Could shop tags be a game-changer for Instagram? Maybe, but results remain to be seen.

How To Prepare

How closely you follow Instagram’s developments and incorporate features as they become available will depend on your business and your audience. If you’re brand with a millennial target audience, it’s smart to experiment. Whether it’s shop tags or another e-commerce feature that Instagram eventually adds to the mix, you want to consider how Instagram can fit into your marketing strategy sooner than later, and keep abreast of new developments.

Shoppers from any source will increasingly land on your product pages from a mobile device, so mobile-friendly checkout pages are an absolute must.

Instagram is a mobile-first experience, so if you one day hope to use its e-commerce features, consider an optimized mobile checkout process a high priority.

Even if you don’t envision your brand using Instagram in the near future, there is no better time to prioritize your mobile checkout process. Shoppers from any source will increasingly land on your product pages from a mobile device, so mobile-friendly checkout pages are an absolute must.

What will be next for Instagram in its e-commerce push? If parent company Facebook’s success in social selling is any indicator of Instagram’s potential, we can likely expect big things to come. We’ll be keeping an eye out for the results of the beta test of shop tags. Stay tuned to our blog to hear the latest.

Tags : e-commerce marketingFacebookInstagramInstagram shop tagsshoppable postssocial commerce
Dave LeDonne

The author Dave LeDonne

Dave is Director of Product at Sidecar. He likes thinking about the future of tech, e-commerce, and Sidecar. He also spends time playing music, cooking, and repeatedly throwing tennis balls for his dog, Gipper.

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