Instagram in Competition with Amazon to Disrupt the E-Commerce Space - Dispatch Weekly

April 1, 2020 - Reading time: 5 minutes

A year ago, Instagram started changing the way its users interact on their platform by introducing checkout, a beta feature available in the US.

Although the feature remains only available to select brands, the initiative is already heralding a paradigm shift for social media users, brand development and shopping in social media spaces.

Checkout allows users to order an item and pay directly within the Instagram app. This e-commerce function is quite distinct from other social media platforms’ integration of e-commerce functionality. Facebook, for instance, offers “shoppable” tags and sales alerts while Pinterest offers lens, which allows users to discover products. These platforms still direct users to the retailer’s website to conclude the transaction.

Instagram on the other hand, has a nifty feature out of checkout. It allows seamless and functional e-commerce transactions, right on the platform. This seemingly small addition is a game-changer in the use of social media, and monumental in disrupting the e-commerce industry, enough to breed rivalry with giants such as Amazon.

80% of social methods users admit to buying some items after seeing them on social media.

Interestingly, social media is already used beyond the original context. People do not only share personal information and cat memes. Today, users find among the plethora of social media content, a reliable tool for product discovery and consideration. In fact, over 80% of social methods users admit to buying some items after seeing them on social media.

In a study by GlobalWebIndex, about 42% of internet users research brands and products that are active on social media. In the same study, about 30% of these people indicated this as their main reason for using social media. People are increasingly looking to interact with brands and discover trends, as opposed to only checking other people’s posts.

Social media platforms have begun to use this to their advantage. Facebook, Pinterest, Snapchat, and Twitter all introduced options for advertisers to make product discovery easier and minimize the processes to visit a retailer’s website. Despite these options, the user experience has been nothing to write home about. Instead, these platforms have an unpleasant showcase of advertisements, posts, updates, news and all forms of social media content. Instagram made it easier and took it a notch higher with its simple interface which is streamlined to make advertising feel more welcome.

Ecommerce sites need a better Content Strategy

On the other end of the spectrum, e-commerce websites are finding it difficult to come up with the right content strategy to make product delivery pleasant or easy.

While Amazon has done a lot to ensure users get what they want quickly, their model is only great for planned shopping, not so good for impulse buying. While you may come across new products, they are only shown as a comparison with your search query.

This strategy for seamless product discovery is where Instagram is making a statement. Its visually appealing interface makes products, especially clothing, interior and skincare blend naturally, and feel native to the platform. In all its entirety, Instagram has undergone updates that give it the ideal online window shopping persona. Also, its algorithm excels at predicting and displaying the right type of content for its users. With its combination of features, the obvious next step for it was to drive into e-commerce, which it did gracefully.

As in other markets such as China, digital shopping expertise has moved towards social. WeChat as an example introduced features that allowed brands to live stream contents that included ‘shoppable’ products. It also integrated products such as finance and logistics to keep social media users, brands and advertisers dependent on the app for many reasons.

While users in other developed markets prefer to have separate apps for different purposes, the trend is likely to change soon. It makes the introduction of checkout on Instagram, a timely add. It not only improves the user experience but also makes the processes more convenient. It further helps brands reduce customer journey to close sales.

Since users spend more time on social media than e-commerce sites, this addition makes users spend even less time on the already less-pleasant e-commerce experience. We should expect a roll-out of financial services on Instagram, to make the process more seamless. However, financial services will most likely be available through Partnerships with already existing service providers.

Instagram is gradually blurring the line between social media and e-commerce and is doing so in a pleasant way. If it becomes deployed worldwide, it may forever change the digital shopping experience with a major effect on e-commerce eggheads like Amazon who are still struggling to make product discovery as easy as possible.

DW Staff

David Lintott is the Editor-in-Chief, leading our team of talented freelance journalists. He specializes in covering culture, sport, and society. Originally from the decaying seaside town of Eastbourne, he attributes his insightful world-weariness to his roots in this unique setting.