Insta-Shopping Checkout

Social commerce enters a new era but are retailers ready for scale?

The launch of Instagram’s “Checkout” feature earlier this year heralded a watershed moment for eCommerce and the entire retail world, but are retailers ready to ride this wave?

Asian social commerce giants, such as Alibaba and Wepay in recent years, led the social commerce charge in recent years, despite early, unsuccessful ventures on the Facebook platform. However, thanks to Checkout and Libra, the Facebook-owned Instagram is stirring up the competition and is getting ever closer to accomplishing its goal of becoming a social commerce behemoth. In June 2019, it finally announced its long term plans to become a retail-based platform rather than a social media network.

The growth potential for eCommerce brands.

Since Checkout’s launch, 130 million people now look at product tags each month on Instagram – a huge uptick from just 90 million last September. Also, as it shortens the customer journey to just two clicks some brands are already reporting a whopping 1,416% in traffic and a 20% increase in revenue. The growth potential according to Deutsche Bank is enormous, with analysts predicting that Checkout could generate as much as $10 billion in 2021 alone. In parallel, the 2020 launch of Libra, by parent company, Facebook could unlock the Instagram Checkout feature to a further 1.7 billion people across the globe who do not have access to a bank account. 

Brands are already reporting a whopping 1,416% in traffic and a 20% increase in revenue from Instagram checkout

Growth potential is further bolstered by ever-growing mobile shopping trends. For example, recent surveys indicate that millennials are now regularly making online purchases anywhere, whether that’s from work, from bed and even from the bathroom (yes, 20% of shoppers have admitted to this). This segment is mobile-first, always connected and expecting transactions to be utterly seamless – something Instagram Checkout can ensure with its two click process. 

There is also the influence of social media on purchases to consider. Eight out of 10 millennials never buy anything without first reading a review, a study has found. As many as 74% of consumers now rely on their social networks to make purchasing decisions. Additionally, 56% of users that follow brands on social media do so to view products. Since its creation, over half of Instagram users follow brands, meaning that it was already the default social network for purchasing decisions – even before it was ready to sell.

Analysts predict that Instagram Checkout could generate as much as $10 billion in 2021 alone.

So what does this all mean for the average retailer?

To capitalise on Instagram Checkout and make an omnichannel future possible, companies need to create a seamless flow across their supply chains. 

Until now, they have had to contend with connecting many different parts: e-commerce, order management systems, warehouse management systems, enterprise resource planning systems, in-store retail systems, and now, Instagram. 

Giving the level of disruption and opportunity that this is already causing in the eCommerce space, retailers should use this time to prepare themselves to fully take advantage of the level of scale this new channel will bring. However to fully capture the growth potential of this new touchpoint, they need to ensure that they get the basics right first.

Retailers must first start by asking themselves if there is a risk that the more practical aspects of the customer experience, such as logistics and delivery could be neglected.

Logistics and delivery are critical touchpoints and elements in the digital customer experience which are often neglected. Regardless of social spend, any loose cog in the supply chain will grind the entire process to a halt, causing customer headaches and damaged reputations.

Every interaction with a customer impacts perception and thus the reputation of a brand, often it can be easy to get caught up with systems and processes so much so that companies can forget about the customer whose loyalty it depends on. With this in mind, it’s vital to create value at every step and interaction and a great way to do this is through the product delivery experience.

Operational failures are at the heart of most negative online reviews. According to the American Express Customer Service Barometer one person tells on average 15 more when they have had a poor service experience. This means that if a company is having issues with its supply chain, deliveries, the ripple effect has the potential to do untold damage to your future sales and reputation, A recent Forbes study revealed that US companies lost as much as $75 billion in 2018 due to poor customer service.

For retailers, Instagram or elsewhere, the customer should have a memorable and personal experience, where they are given the power to decide what is best for them and this includes the shipping and delivery options. Online shoppers should be able to decide how, when and where they receive their order. Investing in every step of the digital customer experience will build customer loyalty, increase word of mouth marketing, convince customers to return to your store and increase their average spend.

The Insta-Shopping feature could well be a watershed moment for eCommerce but if brands try to grow too quickly on top of already inefficient delivery systems then they risk losing customers in the long run to those who get this key component in the digital customer experience right.

Scurri connects commerce and optimises your online ordering, shipping and delivery to be simple, effective and adaptable to your needs. Contact us.

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