Content Marketing, Strategy

Instagram Shopping and the State of “Native” Social eCommerce

The buzz surrounding social selling is deafening, but as we head into 2019, the data sounds a different bell

Aaron Orendorff
March 04 2019

Few eCommerce announcements light up mainstream media like Shopping on Instagram. Each iteration has been accompanied by a fanfare of phrases like “more powerful,” “a lot easier to shop,” and “much higher potential.” Not to mention continued speculation of a standalone Instagram eCommerce platform in the works.

However, hidden within those glowing remarks is a telling subtext. Jonah Berger, bestselling author of Contagious, captured the situation well: “Instagram is a place where you discover new things, brands, destinations for travel and furniture. The challenge at the moment is that discovery is happening, but Instagram isn’t necessarily getting credit.”

In truth, the problem isn’t just a matter of “getting credit.” Instead, it surrounds a question few tech and eCommerce journalists have been willing to face. A question that — when weighed alongside cumulative data — should haunt the dreams of eCommerce marketers: To sell or not to sell?

The Options for Shopping on Instagram

For the uninitiated, “native social eCommerce” isn’t about advertising but, instead, in-app buying via organic posts. Shopping on Instagram has been around since 2016 but was only released network-wide last year. Once an Instagram business account connects its product catalog to Facebook through an approved platform like Shopify or BigCommerce, retailers can sell products in three ways:

Shoppable Posts

The first method is product tagging within organic posts (panel one below). When clicked (panel two), tagged products send users to an Instagram details page (panel three), followed by a direct link to the onsite product page (panel four). From there, shoppers enter a site’s traditional checkout process:

Example of Shopping on Instagram Post

For retail accounts, shoppable posts solved Instagram’s non-link problem, wherein previous options required either paid advertising or a cumbersome “Link in bio” call to action.

Shoppable Collections

Just like other organic posts, as of Nov. 2018 users could begin bookmarking (i.e., saving) shoppable posts, which Instagram automatically collects a Shopping folder:

Example of Shopping on Instagram Collection

Shoppable Stories

At the same time shoppable collections were unveiled, Instagram also released shoppable Stories. Stories have always been the most valuable real estate on Instagram thanks to the ability of verified accounts (and accounts with over 10k followers) to add “swipe up” links. In essence, shoppable Stories functions similarly to shoppable posts by embedding clickable products and prices within them.

Example of Shopping on Instagram Story

Of course, what really matters isn’t so much the options but whether or not anyone is buying.

The State of “Native” Social Shopping

Whether or not Shopping on Instagram works is part of a larger question: Does “native” social eCommerce itself work?

Sadly, recent history is littered with the dead bodies of would-be options. Twitter created and killed its buy button in the span of 18 months. Facebook’s buy button has been “on-again, off-again.” Today the vast majority of Facebook Shops link onsite, despite in-app purchasing options. Pinterest’s Buyable Pins — now known as “Shop the Look Pins” and “Product Pins” — function much like Instagram’s options; moreover, revenue numbers point toward advertising as the network’s growth engine. Lastly, YouTube is pushing YouTube Premium (a paid subscription that eliminates ads) and has yet to offer its own entry into native buying.

As for Instagram, the platform has been tight-lipped about data. When asked directly about Shopping on Instagram during Facebook’s Q3 earnings call, Sheryl Sandberg’s response danced around a single word: opportunity (emphasis added):

“When you look at the Instagram Shopping experience, we’re seeing some really nice growth. We have 90 million people tap to reveal product tags and posts every month to learn more about them, and we’re putting real investments behind this. In Q3, we rolled out Shopping in Stories globally and began testing the Shopping Channel in Explore. And so, we think the opportunities are big.

“As you think about commercial intent in Facebook versus Instagram, there’s so much activity on both. We think there’s a lot of opportunity for people to have commercial intent, if not have it when they start but develop it because they see things they’re interested in, in both. Instagram can be more interest-based in some places than Facebook. So there are places in Instagram like Fashion or like Shopping that have very high signal, and that gives us I think a very strong opportunity there.”

To date, seven independent studies have been conducted on direct social purchasing.

In 2017, Open Influence surveyed 514 social media users — a dangerously small sample size — and found that 65% reported making a purchase directly from a social media post:

Social media platform on which social media users in the United States last made a purchase directly from a social media post as of October 2017Share of respondents
 Never purchased an item through social media34.6%

Also in 2017, ViSense doubled Open Influence’s sample size and discovered that 45.4% had made “a purchase that begins on a social media platform” (20% less than the previous finding) — even with the bar for attribution lowered to “begins”:

Frequency with which social media users in the United States make a purchase that begins on a social media platform as of August 2017Share of respondents
Once a month32.1%
2-3 times a month9.9%
Multiple times a month4.4%

In the same year, OnePoll asked a slightly different question: “Which of the following things would make you more likely to buy a retail product through a brand’s social media channels?” The ability to buy directly through social media ranked last, at 36%:

Which of the following things would make you more likely to buy a retail product through a brand’s social media channels?Share of respondents
UGC such as images from customers who previously bought the product50%
Easy payment system with information already saved (like Amazon Pay)49%
Recommendations of other products I'd like39%
Ability to buy directly through social media36%

ClickZ discovered a similar sentiment when they collected data across eight verticals on “sources that influence purchase decisions of digital buyers.” Product reviews ranked number one — 80% average — and social media, last — 28%.

In 2018, Avionos released a study that somewhat replicated Open Influence’s, but this time 45% of respondents said they hadn’t made a purchase from a social media channel in the last year:

Which of the following social media channels have you made a purchase from in the past year? Select all that apply.Share of respondents
Lifestyle blogs4%

In Dec. of 2018, eMarketer shared Bizrate Insights’ revelation that a mere 6% of internet users claimed to purchase products through social media “regularly,” 17% “have used before, but don’t use regularly,” and 77% haven’t used it in any form. Lastly, SUMO Heavy conducted two studies — the first in 2016 and the second in 2018. Despite the rush of new social shopping features between those time periods, the findings of both were identical:

Share of online consumers in the United States who have purchased products directly via social media (2016 and 2018)Share of respondents

Aggregating the studies and normalizing for sample size reveals that only 33% of users have ever made a “native” social purchase. That number drops to 20% when ViSense’s “begins on” study is excluded. For the studies that offered data on Instagram Shopping, less than 11% of respondents reported having used it.

As a final test, I put together a list of the top direct-to-consumer (DTC) and digitally native vertical brands (DNVBs) from Andy Dunn’s The DNVB Encyclopedia, 2PM’s 25 Top DNVBs, Vogue’s These Are the 50 Digitally Native Brands You’ll See Everywhere in 2019, CB Insight’s 12 Of The Biggest Direct-to-Consumer Success Stories, and IAB’s 250 Direct Brands to Watch (using the top revenue and social footprint categories).

The result was 146 brands. Of those …

  • 120 had Shopping on Instagram enabled (82%)
  • Notable outlines included Fashion Nova, Pura Vida Bracelets, hims, Function of Beauty, and BarkBox
  • Most striking, not a single account had a Shoppable Story live when researched between Dec. 18-27 and again Mar. 2-4, including the brands featured on Instagram’s official Shopping on Instagram pages

Admittedly, these numbers may rise as users get accustomed to buying on social or as networks improve their buy-button experience. Unfortunately, on Instagram in particular, the networks are banking hard not on native eCommerce, but instead on ad revenue. The margins for social selling simply can’t compete with the margins for marketing.

To Sell, or Not to Sell?

Despite the buzz, Shopping on Instagram is still an experiment. The same is true of “native” social selling in general. Amidst the excitement, Adweek’s Ann-Marie Alcántara penned what is perhaps the most forthright headline to date: “Instagram’s Future as a Social Commerce App Looks Murkier Than Ever.” Her conclusion? “For now, it’s a wait-and-see game on where Instagram goes.”

The risks of buying into social selling lay on three fronts: (1) alienating followers with a feed flooded in promotions, (2) damaging organic reach and engagement, and — most importantly — (3) thinking of social shopping as a magic bullet. Forward-looking brands would be wise to test new releases rigorously and focus on maximizing social commerce where it performs best: paid advertising (most notably, low-cost awareness ads coupled with dynamic retargeting sequences).

In the end, there’s still nothing that compares to treating social media as intended — building, entertaining, and serving your audience. Treating the people you serve and sell to like humans, not commodities.

Aaron Orendorff

Previous the Editor in Chief of Shopify Plus, Aaron Orendorff is now the founder of iconiContent, where he’s busy “saving the world from bad content.” He’s also a regular contributor at Mashable, Entrepreneur, Lifehacker, Fast Company, Business Insider, Content Marketing Institute, and more. Connect with him on Twitter or Facebook.

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