Instagram’s Future as a Social Commerce App Looks Murkier Than Ever

The platform needs more monetization tools

The future of shopping on the app remains a mystery with experts worried it’ll become just another Facebook. - Credit by iStock
Headshot of Ann-Marie Alcántara

Eight years ago, Instagram was nothing more than a new social media app designed to share grainy photos of food, friends and family. A billion-dollar acquisition and several years later, Instagram is turning into a leading contender in the social commerce space, with the platform evolving from a place for influencers and normals to one where brands can thrive and create whole businesses.

Several data breaches at Facebook, and Instagram co-founders Kevin Systrom and Mike Krieger abruptly leaving the company in September hasn’t done much to dissuade brands and analysts from seeing the future of Instagram as a social shopping hub. However, before the platform gets to that point, many are hoping for new tools to monetize the platform—as long as Facebook doesn’t get too involved.

“When we envision Instagram in the next few years, we hope the experience is clean; see beautiful photography, maybe shop here and there and not a flood of advertising from companies who are just [there] to flood the platform with ads,” said Karla Gallardo, co-founder and CEO of Cuyana, a women’s clothing company.

"At the moment, commerce sites are having a tough time being a fun discovery experience, and the social networks are having a tough time being a transactional commerce experience."
Jason Goldberg, svp, commerce, Publicis.Sapient

Gallardo explained her concern comes from seeing Facebook as once a “place of community” to now a space where “advertising has cluttered the experience.” Gallardo feels this way for good reason; Cuyana uses Instagram as a “brand-building channel.” Instagram, like for many digitally native vertical brands, is a part of any company’s marketing, growth and acquisition strategy, and clogging a platform with ads would drown out brands like Cuyana. At a time when customer acquisition continues to get more expensive and competitive for these brands, more ads mean more clutter on the app and less organic ways to gather customer data without first paying Instagram to get it.

“The power of ecommerce is about relevance and curation and really if [brands are] just doing ads, you’re taking away the power of doing ecommerce on Instagram specifically,” said Matt Tepper, chief strategy officer, North America, Wunderman.

Instagram’s played a large role in the customer journey for Choosy, an on-demand shopping company, with 60 percent of orders coming directly from the app, said Jessie Zeng, co-founder and CEO of Choosy.

While Choosy uses several of the ecommerce features that the app offers such as tagging products in posts and stories, as well as polls, Zeng said she wishes Instagram had more customization features for business pages that set them apart from consumer pages, like reviews, as well as a digital wallet option that stores a customer’s credit and shipping information.

Jason Goldberg, svp, commerce at Publicis.Sapient, agreed that a digital wallet is a key part of making Instagram a more robust social commerce app (especially with the growing amount of data breaches on social networks like Facebook and Google). However, Goldberg also argued Instagram needs more partnerships like Snapchat’s deal with Amazon to create a visual search tool.

“At the moment, commerce sites are having a tough time being a fun discovery experience, and the social networks are having a tough time being a transactional commerce experience,” Goldberg said. “The reality is we need tighter integration and sharing product feeds between the commerce engines and the social platforms.”

Goldberg said Instagram also needs better tracking pixels and tools to share with marketers to help them “understand the ROI for their advertising.” Regardless of what Instagram develops, however, Goldberg said marketers are waking up to the impact that social media apps like Instagram are having on people’s shopping behaviors—a sentiment that Tepper shares, seeing Instagram as driving “decision-making and discovery.”

However, Tepper believes the future of commerce on Instagram won’t be brands convincing consumers to shop with them. Instead, they’ll increasingly use influencers, which are already intertwined with commerce on the platform as is, with a report from Activate, an influencer marketing company, showing 92 percent of marketers and 88 percent of influencers using Instagram for more campaigns, while scaling back on YouTube, Pinterest and Twitter.

Instagram remains quiet on its shopping future. When reached for comment, a spokesperson pointed to the company’s blog post on welcoming Adam Mosseri, the new head of Instagram. However, earlier this year, Carolyn Everson, vp, global marketing solutions at Facebook, spoke about the success of stories across all its platforms—including Instagram—and how it’s “a major big focus” of the company.

For now, it’s a wait-and-see game on where Instagram goes.

“I don’t think any of these platforms were built for social commerce—none of them are well positioned to be the category killer,” Tepper said. “On the other side, it’s hard to build the users that both of these platforms [Instagram and Snapchat] have. I don’t know if any of the current platforms are perfectly set up for social commerce, but I think they’re going to be the dominant players until something better comes along.”

This story first appeared in the October 22, 2018, issue of Adweek magazine. Click here to subscribe.

@itstheannmarie annmarie.alcantara@adweek.com Ann-Marie Alcántara is a tech reporter for Adweek, focusing on direct-to-consumer brands and ecommerce.
Publish date: October 21, 2018 https://dev.adweek.com/retail/instagrams-future-as-a-social-commerce-app-looks-murkier-than-ever/ © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT