Instagram tests shopping outside of ads with 20 retailers in the US

Ever seen a brand post a photo of a shirt on Instagram and thought, “I want that. How can I get it?” But then realized in order to get it, you need to see if the brand put the shirt’s name in the caption, then switch out of Instagram to your phone’s browser, search for the retailer’s site, then search on the site for the product’s name to get to a page where you can buy it. It’s a hassle. But not for long.

Next week, Instagram will start testing a way for you to be able to see a product in a retailer’s photo and buy it from the brand’s site without leaving Instagram’s app. The test will be limited to 20 retailers — including JackThreads, Kate Spade, Macy’s and Warby Parker — and only people in the US who use Instagram’s iOS app will be able to try it out.

Instagram’s shopping feature is pretty basic and not entirely new to Instagram. The feature doesn’t work for videos, and people have been able to buy products through ads on Instagram for over a year. The new, organic-only shopping feature — which Instagram plans to eventually apply to ads — boils down to a sleek upgrade of the old ad-only version.

At first when you see a shopping-enabled photo, it’ll look like a normal photo, except the bottom-left of the image will have a “Tap to View Products” callout. Tap that, and you’ll see tags laid over up to five products in the photo with their names and prices. Tap one of those tags, and you’ll see a zoomed-in view of that product with its description where the caption would normally be and a link to “Shop Now” where the likes count would normally be. Tap the “Shop Now” button, and Instagram’s in-app browser will open to the product’s page on the retailer’s site.

It’s a three-tap process, but it’s more direct than having to bounce from Instagram to a web browser to the retailer’s site or a search engine to find the retailer’s site and the specific product on it. And probably not coincidentally, it removes the need to get Facebook’s main ad rival, Google, in on the action, to the point where you end up clicking on a Google search ad to get to the retailer’s product page and the retailer credits Google, not Instagram, for the sale.

Instagram’s organic shopping flow tags products in retailers’ photos and links to their sites.

As basic as Instagram’s new shopping feature is, it’s also foundational. It turns Instagram accounts into storefronts. Instagram isn’t the only platform interested in becoming a shopping outlet. So is Facebook. And Google. And Pinterest. And Twitter. And that’s great for retailers who see an opportunity to make their marketing channels work better as sales vehicles.

“It makes it a really exciting opportunity to turn Instagram on the organic side from an engagement channel to a direct selling channel,” said JackThreads CMO Ryan McIntyre.

The data that retailers like JackThreads will be able to gather from Instagram-driven sales can help them hone their merchandising and marketing to attract more customers, such as by looking at which photos drive the most sales, and those photos and the way they present products could be applied to their presentation outside of Instagram.

Instagram will share with the retailers how many people interact with a shopping-enabled photo and how many click to visit the retailer’s site. And from there, if a person who clicks from the Instagram photo and signs in on the retailer’s site before purchasing the product, the retailers will be able to tie that transaction to their CRM database. They could use that link to advertise related products to those Instagram-driven customers on Instagram and other platforms that offer CRM-based targeting, as well as to advertise to people who share similar characteristics as those customers, otherwise known as lookalike audiences.

“We’ll be looking at sales and total basket sizes and things like post-click as they come over, but also looking at the image composition from what actually drives the most activity,” said McIntyre.

There is no money changing hands between Instagram and the retailers testing the product, said Instagram’s director of market operations, Jim Squires. Instagram isn’t getting a cut of the product sales from the retailers, and the retailers aren’t paying Instagram to be a part of the test, he said.

But it’s easy to see how Instagram could turn this into a money-maker. For starters, if it turns out that people are more likely to interact with and buy from this shopping experience than from the one already available through Instagram’s ads, it could swap out the ad-based shopping experience for this one to potentially boost ad-based sales and advertisers’ interest. Instagram’s organic shopping posts use the same back-end product catalogs that Facebook uses for its own shopping service and that Facebook and Instagram use for their shopping ads. Instagram and Facebook could also use the data from Instagram’s organic shopping posts to retarget people who see and/or interact with these posts with related ads on Instagram and Facebook and everywhere else Facebook can show them ads. Instagram isn’t enacting any of this at the moment, but Squires didn’t rule them out for the future.

Speaking of the future, there’s a lot more Instagram could do with shopping. Could Instagram use its parent company’s image-recognition technology to automatically identify specific products in photos and even videos? Could Instagram use that technology to recognize what products are in the photos and videos people are posting or liking and show them ads based on that information? Could Instagram use that technology to create an affiliate marketing program where, if I opt in to the program, any time I post a photo or video with a participating retailer’s product and someone clicks that product to buy it from the retailer’s site within Instagram’s in-app browser, I get a cut of the sale?

No and no and no, according to Squires. At least not yet.