Another year, another social commerce rebirth.
Instagram is rolling out new features to entice users to buy through its platform. According to TechCrunch, the image-sharing app has low-key launched a payments system to a limited user group using stored credit card details. For now, payments are limited to things like booking appointments with salons and making restaurant reservations through Resy, indicating the company thinks services are better suited to this medium than goods—at least initially.
This is just the latest ecommerce offering Instagram has introduced over the years. “Shoppable Tags,” where brands can add clickable pricing info to pictures that leads users to product pages, debuted in 2016. But shopping on Instagram is still niche, despite its popularity among vintage clothing aficionados and direct-to-consumer brands rarely seen outside of social media feeds.
There is no question that social media plays a significant role in discovery and influence. According to "The eMarketer Ecommerce Insights Report," conducted by Bizrate Insights in April 2018, 20.4% of US internet users across all age groups said they heard about something on social media and bought it in the past month. And nearly half of respondents ages 18 to 29 engaged in this behavior.
But how many buy directly through a social platform? On Instagram, less than one-fifth per a December 2017 Cowen and Company survey. Most buy through a brand website, which makes sense since to date Instagram has been set up that way. As with the Bizrate data, younger internet users were the most likely to perform social media activities. Nearly one-quarter of those ages 25 to 34 completed purchases via Instagram.
In the same study, 20% bought directly on Snapchat and 18% bought directly through Facebook, roughly the same amount who make purchases via Instagram.
A GlobalWebIndex survey from Q4 2017 found 41% of Snapchat users, 40% of Instagram users and 35% of Facebook users had used a mobile payment service in the past month. That seems a bit high, though the survey was worldwide and usage of mobile payments is higher in Asia-Pacific than North America.
Instagram isn’t the only social platform experimenting with ecommerce. Facebook has been flirting with payments in Messenger since 2015, when it launched peer-to-peer payments. It has also been testing native payments since 2016, but that feature is still in closed beta. In February, Snapchat launched a merchandise section, Snap Store, where users could buy Snapchat-related items using a stored credit card. Currently, the only item available is a dancing hot dog keychain that goes for $9.99. This clearly isn’t a revenue stream for Snap, but enabling one-click purchases could just be the beginning for a larger venture.