How Instagram became a social commerce powerhouse

It has been a very busy year for Instagram.

Instagram managed to increase the users and the brands that joined the platform. It even explored how to become effective for social commerce, which means that we’re expecting a very interesting year ahead.

I discussed with Pau Sabria, co-founder of Olapic, Instagram’s latest changes and how it has steadily becomes a social commerce powerhouse. But what’s next?

What makes Instagram appealing for brands?

Instagram is an inherently visual social platform, generating an average of 95 million consumer images and videos a day, and humans are inherently visual communicators.

Instagram has successfully developed a community centred around the sharing of visual user-generated content (UGC) and unlocked a powerful new way for brands to engage with their consumers; just this month, Instagram announced it has reached 600M monthly active users, doubling engagement from 2014. According to a recent study from Salesforce, 47% of high-performing marketers extensively use UGC (vs. 19% of moderate performers and 8% of underperformers).

As the desire for more authentic content grows, Instagrammers are increasingly turning to their peers for inspiration along the path to purchase. By tapping into the abundance of fresh and readily-available consumer content, brands can engage with shoppers in a more honest and meaningful way.

How did Instagram become useful for social commerce?

Instagram has always been known for powering mobile discovery, but the recent introduction of its ‘Shop Now’ feature has uniquely positioned it to make a powerful impact on social commerce.

This is a feature that consumers have been clamouring for and delivers the ability to seamlessly research, review, and purchase products within the platform.

Shop Now could prove to be one of the most successful ventures into social commerce, where other platforms are struggling to reduce friction and gain consumer trust.

How can an ecommerce brand take advantage of Instagram’s popularity?

Instagram is an ideal platform for ecommerce brands and offers many ways to inspire sales and increase customer engagement. Brands should look for ways to take advantage of the platform’s wealth of high-quality and readily-available user content to help supplement branded content within marketing efforts and as part of the ecommerce path to purchase.

Business profiles Instagram

Consumer images are proven to have a significant impact on conversion rates when used through an ecommerce property. To generate this consumer content, brands should encourage their fan base to share photos using a unique branded hashtags and publicise calls to action across marketing channels.

To effectively curate submissions and surface only the most relevant assets, marketers should create a set of guidelines for identifying compelling user content. This will also help them determine if the content is in-line with their brand – whether it’s images of consumers interacting with purchases or simply product shots.

Finally, once a brand has identified content they’d like to repurpose, they should reach out to the specific user for explicit permission to use their content. This level of engagement promotes excitement and builds loyalty among consumers.

What should we expect from Instagram during 2017?

According to a new report from eMarketer, 74.2% of U.S. companies with 100 or more employees will use Instagram for marketing purposes in 2017, which is more than the 66.2% that will be using Twitter. As a platform teeming with high-quality consumer images and videos, Instagram recognises the marketing value social content holds for brands.

In terms of social commerce, we expect Instagram’s ‘Shop Now’ feature to play a pivotal role in the way social media is is impacting shoppers’ path to purchase. This is just the beginning.  Instagram currently hosts the product detail page of the item being sold – much in the same way Instant Articles are hosted by Facebook – but if the platform wants to optimise its ‘Shop Now,’ feature, it will need to further monetize the tool.

While Instagram could theoretically do this by integrating with comprehensive inventory management systems of every brand, we think it’s more likely for the platform to adopt a practice of paid reach for brands, given that the first option is nearly impossible to do at scale.

Which one of all its latest changes should a brand notice first?

Brands should definitely pay close attention to Instagram’s ‘Shop Now’ feature – and more importantly – where it’s headed. We’ve been waiting for this development for a long time, and while it’s currently limited to a certain number of brands partners, ‘Shop Now’ is already transforming the world of social commerce.

As Instagram and broader social shopping continue to evolve, it will be exciting to see consumers’ growing ability to both inspire and drive conversions for their favourite brands.

Last but not least, what’s the ROI of Instagram for a brand?

It’s important for brands to moonlight the platforms their audiences are most active on, especially as consumers are increasingly turning to social for inspiration during the purchasing cycle. Millennials, in particular, prioritise Instagram when engaging with both their favourite brands and each other; the ROI of this type of engagement is realised by customer loyalty.

Further, when marketers begin to use consumer content from Instagram in their own marketing efforts or directly in their own ecommerce path to purchase, they not only save money on content creation, but conversion rates can jump when authentic content is present to leading to more sales and/or a higher average order value.

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