Business development · 20 March 2019

Instagram launches Checkout function allowing users to purchase in-app

Could Instagram’s in-app checkout reduce cart abandonment?

Photo-sharing platform Instagram has taken further strides into ecommerce with the launch of an in-app checkout tool.

The “Checkout on Instagram” button, currently in its beta testing stage in the US, allow users to purchase items through Instagram shopping posts without leaving the app for the first time.

Users can also store their payment information within their Instagram app to make regular purchases.

Customers will then receive notifications about shipment and delivery inside their app, enabling them to keep track of purchases.

“Checkout is just one part of our long-term investment in shopping,” the company announced in a blog post. “We’re excited to introduce even more ways for people to enjoy shopping on Instagram this year.”

The app expects Checkout to generate more sales for business pages

Who is participating?

At least 20 brands are participating in the pilot, launched this week, including: Nike, Adidas, Dior, H&M, MAC, Michael Kors, Prada, Uniqlo, and Zara. “More will be coming soon,” the company added. 

Benefits to independent retailers

The launch of an in-app checkout could reduce checkout abandonment for retail business owners. Where brands often see users exit their purchase early in frustration of being taken to a separate site, Instagram now expects the function to complete a purchase within its app to generate an uplift in sales.

When asked by TechCrunch whether business owners could expect additional service fees to be charged, a spokesperson said: “We aren’t sharing the specific number right now. We are testing a selling fee with businesses during the closed beta. It will not change the price of the items for consumers.”

Short-sighted and a threat to brand trust

Despite the benefits championed by Instagram, retail experts have warned that businesses could see their online conversions suffer.

“While the implementation of an ‘instant purchase’ function is a logical progression for Instagram, it’s short-sighted, and could be detrimental for brands looking to boost online conversions in the long-term,” Chris Greenwood, CIO at nursery retailer Mamas & Papas.

“Retailers should be spending more time perfecting their on-site route to purchase, not incentivising purchases on other apps that they have no real ownership over.”

Meanwhile, Neil Cotty, CEO at Global Freight Solutions explained why a UK-rollout of Instagram Checkout could be more complicated than expected.

“From experience, we know the online checkout is only part of the customer experience, there’s a huge consideration around shipping and delivery too. If Instagram Checkout were to come to the UK, the issue of lack of transparency around duties and taxes, given current uncertainty around trade, could cause significant problems for retailers selling through social media sites,” he said.

The result could be a loss of trust in brands online.

He added: “Data from GFS and IMRG shows over half of shoppers have abandoned an online purchase at checkout stage because of delivery-related reasons. As such, there can be little doubt that a lack of transparency at checkout could damage a brand’s reputation with its customers.”

Is ecommerce the future of Facebook?

Instagram also announced this week that 130 million users tap on product tags in shopping posts every month.

Zuckerberg previously hinted that Facebook’s future business model would be based around ecommerce functionality.

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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