Instagram Checkout: Industry Reaction

Alyssa Clementi

Instagram has rolled out its new Checkout feature, which allows users to purchase products directly from the app. The feature, which is in beta testing in partnership with 23 brands, is now available to U.S Instagram users. We reached out to the industry to gauge its reaction to the new announcement

John Bruno, VP of product management at Elastic Path

"So often eCommerce disruption happens through organizations with the means to disrupt. Today on Instagram, you can already highlight products and link out to your own commerce experience. Any time you can reduce the friction and steps between the decision to buy and executing on the transaction represents a powerful shift for the consumer. Retailers struggle converting on mobile, but with Instagram owning payments—the mobile friction point—conversion will increase."

Eli Finkelshteyn, CEO and co-founder of Constructor.io

"Instagram’s new in-app shopping follows closely on the heels of Google’s testing shoppable ads in its image search. Both announcements highlight a growing trend: Companies realize that owning the location and medium where users find the products they want to buy is key to getting those users’ dollars."

"Shoppers hate repeatedly entering their account information on retailers, especially on mobile. Currently, when they find something they want on Google or Instagram, they’ll go straight to Amazon where most already have an account (and payment information stored) to see if they can find the product there. This is good for Amazon but not for Instagram or Google where the product was initially discovered. With this new shopping functionality, those same shoppers can buy what they want even more easily, without Amazon ever being involved."

"Content sites like Instagram already help users find products they may want to purchase are realizing that they can help both themselves and eCommerce companies (not named Amazon) by providing a simple and quick path to purchase."

"In a world where more than half of users start their product search at Amazon and 74 per cent go to Amazon when they’re ready to buy something, more and more companies are realizing that owning and being incredibly good at search and product discovery, is key to capturing eCommerce dollars."

Scott Ings, VP of product at Apptimize

"This is a really interesting change for Instagram to make because it could have a substantial impact on how users view the product and the brand. Many users are of course influenced by what they see on Instagram and even go into the app thinking that it might lead to some eventual purchase. But at the same time, users certainly don’t think of Instagram as an e-commerce product and have already shown some uncomfortableness whenever Instagram or Facebook blurs the line between “influencers” and paid advertisements."

"The new feature could be promising as an additional revenue source for Instagram, but there is also the risk of alienating users by causing the brand to be perceived as more commercial than social. This type of uncertainty is why we see top apps consistently running experiments for major features and experience changes. You really can’t know which effect is going to be more dominant until you put it out to users and measure what happens."

From the brand’s perspective, this change also presents a pretty interesting opportunity to try something new and see what works. Many apps have tried removing barriers to purchase with really good success. For example, Hotel Tonight used Apptimize to remove a registration requirement for their mobile app and saw a 15 per cent increase in the number of total hotel bookings. This was pretty counterintuitive at the time because just about every app and website made users register so that they could be remarketed to via email. But Hotel Tonight found that the benefits of streamlining the buying process more than made up for it."

"On the other hand, removing barriers can be a double edged sword. It’s possible that brands will find that they are losing out on an opportunity to create long-lasting awareness and loyalty with customers. Since customers won’t go to the brand’s website at all, brands might find that they’re paying for a one-time customer as opposed to a customer who interacts with their website directly and who might be stickier in the long run and have a higher customer lifetime value."

"Brands should definitely test the different options against each other and have very solid metrics for success to truly understand the long term financial benefits and/or tradeoffs."