Instagram Checkout: A Gift for Challenger Brands

If you’ve ever scrolled through Instagram and found a product that you wanted to buy, you probably fumbled through links, were forced to register an account, add payment details or download a separate app to purchase it.

Clunky, right?

To fix this struggle, Instagram introduced Checkout, a feature that lets users buy products in the app instead of linking externally. Checkout is only available as a beta test to a few brands right now, like Kylie Cosmetics and Warby Parker, and will likely be useful for merchants big and small in the near future.

One of the most important features of Checkout is that shoppers will only have to enter their billing and shipping information once. Like Amazon’s checkout process, having this information saved will make it easier and faster for shoppers to make their purchases.

The ease of Checkout is especially important for challenger brands.

First, keeping the shopping within the app limits comparison shopping because the customer is directed straight from the item to the checkout process.

Second, the seamless checkout process removes a lot of the barriers to purchase for customers, making it easier for challenger brands to complete the sale. A lengthy or otherwise tiresome checkout process can turn a would-be customer into an abandoned purchase. Online cart abandonment rates were 69 percent in 2017, and in a 2018 study by Baymard, 34 percent of shoppers surveyed said they dropped their transaction because the website required them to create an account to check out. Additionally, 26 percent said they dropped because the process was too complex or because the site was too slow.

Instagram’s Checkout should help fix this. By creating a scroll-tap-buy process that’s short and sweet, brands can ensure more shoppers follow through with their purchases.

Third, there’s one battle that challenger brands fight in the early days of gaining market share. It’s the battle to simply get on the shelf at a store. Even with a great product, there is a lot that goes into convincing a store to move name-brand products over on the shelf to make room for your product. Checkout makes a two-fold growth strategy that encompasses both online and offline purchase, an even more viable one. With Checkout in the near future, Challenger brands won’t have to completely build their own online checkout process from scratch.

So why is Instagram doing this? Money, money, moneeyy. They’ll be taking a small cut of each sale, partnering with PayPal to process the transaction. But having a direct pipeline for a customer to see an eye-catching ad and then purchase the item with just a few taps may encourage brands to invest more in paid content on the network, a win-win for Instagram.