A Healthy Consumer Means More Retail Disruption
Don’t expect shoppers to stick with the retail incumbents, whether on land or online.
Bloomberg, January 27, 2020
Perhaps the most intriguing online retail outlet is Instagram’s Checkout. It was named 2019’s Technology of the Year by Mobile Marketer. Fashion site Glossy describes Instagram as the next big sales channel “for direct-to-consumer companies and traditional retailers alike.”
More than just promoting a brand or product, Instagram is facilitating the sale of products directly to consumers. The company takes its slice of the transaction. Combine this with the lethally accurate algorithms deployed by parent company Facebook Inc. and you can imagine the sort of sales growth that might lie ahead.
To give you an idea of the size of this marketplace, Instagram has more than 1 billion accounts active each month worldwide (Facebook has 2.45 billion active users). Most of them have some form of payment system, including credit cards, Venmo, PayPal or Apple Pay.
So far, Instagram Checkout has been rolled out slowly since the platform introduced it in March. It has been testing product tags in posts since 2016. Again according to Glossy, tags came to “Instagram Stories” about two years later. The fashion site, quoting Instagram, reports that 130 million people tap a product tag to shop or see a price every month.
Instagram is native to mobile, which is where the new generation of consumers spend most of their connected time. Although Instagram hasn’t made a big splash in online retailing yet, the potential is there.
~~~
I originally published this at Bloomberg, January 27, 2020. All of my Bloomberg columns can be found here and here.
