Early this year, Instagram announced that it is adding a new Ecommerce feature to help connect online shoppers to product drops through its app. Drops, which are a fairly recent Ecommerce trend, work to assist sellers in generating buzz for forthcoming products in the days and weeks leading up to their availability. In addition, the products are usually offered in limited supplies or for a short period of time—thus increasing desirability and demand.
With this introduction of this new functionality, “Drops” will now have their very own home inside the popular photo-sharing app. At the top of the Shop tab, consumers will be able to discover, browse and shop all the latest product launches and view upcoming launches. Dedicated shoppers will also be able to sign up to receive reminders about products they’re interested in and look through products and collections from other drops that recently took place on Instagram.
Importantly, this service also allows consumers to make their Drops purchases directly in the Instagram app. This model will eventually allow Instagram to collect fees on purchases — something that’s become a more critical part of Facebook and Instagram’s overall business model in the wake of Apple’s privacy crackdown on iOS apps that impacts Facebook’s ad revenues. Let’s take a look at a few of the other important implications of this move:
Data is harder for merchants to pin down
As alluded to above, from a merchant’s perspective—this is not all good news. In addition to potentially paying fees down the road, the merchant loses the ability to see how well users interact with their products. The (potential) customers will never have to leave the Instagram (and ultimately Facebook) ecosystem. Instagram, therefore, will know how users interact with the products (how long they look at them, what they click on, what they are interested in), and this knowledge will become more difficult to track for the merchants, retailers, and brands.
Product drops make it easier for users to shop
On the other hand, the feature is good for users, as there is no need to go through a third-party website. For customers, this makes interacting with influencers and shopping on Instagram faster, easier, and more seamless than ever. One of the most positive things for consumers is that they will not have to create an account on lots of different merchant websites.
Instagram becomes a more important player in the Ecommerce landscape
Conversions no longer happen on the merchant’s own site when shopping takes place via Instagram. This means that it becomes more challenging to build up a customer base outside of Instagram by Facebook. Social CRM, therefore will move more towards Instagram. This essentially strengthens the position of IG and Facebook as an essential part of CRM and the customer journey. The dependency on Facebook and its marketing tools will become even more crucial than they already are.
So what about brand awareness?
So what does this new model mean for brand awareness? Does it go down the drain if no proper landing page exists? Well, when a merchant or brand does not have the means to invest in both their traditional brand campaigns and create the right content for IG, the trade-off will become more significant. Substantial investments in social media-specific campaigns and content marketing are required to stand out. The one thing that will be lost for most merchants is the ability to communicate their USPs and campaigns on a different platform (their website, for example), where they can show their own brand identity, imagery and potentially cross-sell additional products more efficiently.
Social commerce is here to stay. And this is a big leap forward.
In conclusion, there’s no arguing that this is a smart move from Instagram. It is something that can make the IG experience substantially better for some users. So far, Instagram has not been able to crack the social commerce code, or at least they have not become the middleman between influencers and merchants, brands, and retailers. This feature might very well change that. In the short term, it is an opportunity for all.
In the long term, though, it’s an expensive and dangerous road to go down for merchants—especially when it becomes more difficult to build up their own customer database and CRM. Nevertheless, this is a move we have seen coming for a long time. It was not the question of when, but how Instagram will start to roll this out. From what we’ve seen in the USA, it’s a force to be reckoned with. Let’s see what will happen here in mainland Europe. We will keep you posted as it rolls out and the various implications make themselves apparent. In the meantime, follow us on LinkedIn, Facebook, and Twitter for the latest digital marketing news.