Instagram payment system - how will it change consumer shopping behavior?

Will Instagram Become The Next Major E-commerce Marketplace?

The platform’s shoppable links function is evolving with new native payment feature slowing rolling out, which can mean big changes for brands, influencers and consumers.

It’s not groundbreaking news that Instagram has huge influence when it comes to purchasing decisions – thanks to influencers. We follow our favorite influencers because we love their style, relate to them on some personal level or aspire to live a certain kind of lifestyle, so obviously we want to buy the things they are posting about, right?

Instagram is playing a big role in how people are shopping online

According to studies, 72% of users report making purchase decisions based on something they saw on Instagram, and with the shoppable tags feature launched in March of last year, brands have been able to use the platform as a powerful selling tool. But now, Instagram has quietly introduced a new function for select brands and users in the UK and US that has the potential to completely change the way consumers shop online.

Instagram is the most influential social media platform when it comes to shopping.
Instagram is the most influential social media platform when it comes to shopping. Source: www.retailtouchpoints.com.

How will Instagram’s native payment system work?

Instagram native payment system
Instagram native payment system will soon be available globally.

The new native payments function allows you to register a debit or credit card on your profile, set up a security pin, then start buying things without ever having to leave Instagram.

As it stands now for most users, they are directed to a brand’s website to explore a product they like from a post, where they then have to enter their payment and shipping details, prolonging the purchasing process. And let’s face it, when we’re perusing on Instagram, we are usually on the couch Netflix and chilling, and the last thing we want to do is make the effort to get our credit cards!

It’s a good sign anytime you can shorten the customer journey as it improves conversion, so this is a monumental step for not only the Instagram user, but for brands and influencers. This new feature has the potential to make Instagram the next big e-commerce marketplace – Amazon, are you scared yet?

Some users can now book movie tickets and spa appointments on Instagram

One of the first company’s equipped with the feature is Resy, which allows you to make restaurant reservations around the world, who has partnered with Instagram to allow users to book through the app.

In the future, Instagram says users can expect direct payments for things like movie tickets through the app. According to a TechCrunch article, some additional brand integrations include Acuity, Atom Tickets, Booksy, ChowNow, Eatstreet, Eventbrite, Fandango, GrubHub, MyTime, OpenTable, Reserve, Restorando, Resy, SevenRooms, StyleSeat, Tock and Yelp Reservations, with plans to add Appointy, Genbook, LaFourchette, Mindbody, Schedulicity, SetMore, Shedul and Vagaro soon.

Instagram native payments system opens new opportunities for brands and users.
Instagram native payments system opens new opportunities for brands and users.

Brands need influencers now more than ever for conversion

After the success of shoppable posts in the US, the feature has recently rolled out to a number of new markets. Brands can direct their followers to shop the products shown in an Instagram image with one simple click. As it stands now, consumers have to leave the Instagram platform in order to purchase something they see in the post, but if the new native payment feature proves to be successful, consumers will have the possibility to shop their favorite brands right from Instagram.

One of the best things about Instagram shoppable posts is that brands who work with influencers can utilize their shoppable content. Brands can reuse their generated imagery and place it on their own profile, making it shoppable. This also gives brands an additional opportunity to track conversion on an influencer by influencer bases across their owned Instagram feeds. It will also give additional insight into which influencers perform best in terms of sales and engagement while also giving insight into the style of Instagram content that drives visits and conversion too.

According to Barbara Soltysinska, indaHash CEO and co-founder, she thinks that this is the beginning of the mobile retail revolution, and influencers will be on the front line to support brands and influence purchases for the consumer. “As Instagram slowly rolls out their new native payment feature, it means a few things. For consumers, probably even more time will be spent on the platform and less time will be spent on traditional e-commerce sites. For brands, this could mean big changes to their retail strategy, with them leaning even more to influencers to connect with their consumers. And for influencers, this change means more opportunity for them to become true ambassadors for the brands they already love and use.”

As Instagram allows brands to dip their toes into this new e-commerce structure, it also means a whole new relationship level between influencers and the brands they decide to work with. Adweek put it into perfect perspective stating, “As the world has shifted to social media, consumers look at fellow consumers to inform their purchasing decisions. Instead of looking at companies, as they did in the past, they now look at each other and at their favorite personalities.

Although the new native payment feature will help with conversion, it also means less traffic to brands’ websites, meaning that influencers have the potential to be the true catalyst for driving sales, further solidifying the importance of a strong influencer campaign as part of a brand’s marketing strategy. As this new payment feature spreads into other categories past booking services, brands will have to depend even more on influencers to help sell their product. It’s obviously a good thing from them, but what about the consumer? Well, it definitely means more time spent on Instagram, and more than likely, more credit card debt.