Instagram Checkout has arrived and we’re not worthy

Instagram's new checkout feature takes social shopping to the next level, but does your business have the infrastructure in place to handle it? Magnum & Co's Martin Hong explores the benefits and potential pitfalls.

Recently, Instagram announced a new in-app feature that has brands the world over salivating: Instagram Checkout. Now, when you find a product you love in your feed, stories, or explore, you can buy it without leaving the app. It is currently in closed beta, available to only a handful of brands in the US such as H&M, Nike and MAC, but it’s already setting the internet ablaze with promise.

If you’re one of the 130 million Instagram product tappers, rejoice! After your first purchase, your shipping and billing details will also be saved so you can impulse-buy at lightning speed. Plus, you’ll get shipping and delivery notifications right on the app.

For a company that has resolutely resisted letting you link out of its app, this move makes perfect sense – especially from a revenue standpoint. Last year, Facebook’s total ad revenue jumped 38% year-on-year to $55 billion, thanks to its 7 million advertisers across Facebook, Instagram, WhatsApp and Messenger. New formats like Stories ads have already been adopted by over 2 million advertisers, so no doubt a direct-to-purchase ad unit such as Instagram Checkout will see these numbers explode in 2019.

But what’s in it for marketers? On the surface, this new functionality upholds UX’s oft-quoted three click rule to reduce friction in the path to purchase – that’s always music to our ears. As is the undeniable novelty factor. Campaigns like those from Michael Kors and Warby Parker that are quick to leverage new ad unit functionalities and birth new buzzwords like “Frictionless 2.0” are media and award-show catnip.

Yet there’s a reason it’s the usual suspects that have been chosen for the closed beta: the majority of businesses today are simply not equipped to support this new digitally-empowered consumer. We’re still grappling with the challenge of Data Silo 1.0.

A recent survey of 500 IT decision makers in the US and UK found that although three-quarters of respondents agree their organisation has more data than ever, only 2% consider themselves to be “completely effective at data sharing”.

The solution is not going to come quickly. According to the survey, causes for these silos are numerous and complex. It includes inconsistency of systems being used (42%), inconsistent data formats (38%), and a lack of coordinated data strategy (37%). On top of this, over a third highlight a lack of technology integration (36%) and/or legacy technology barriers (36%) as blocking attempts to effectively share data.

Sound familiar? Without first considering the strength of your business intelligence, you could be setting yourself up for failure. Many are calling the challenge of data silos a key priority for 2019. And we totally agree.

Instagram’s latest move is just a reflection of the growth of omnichannel retail – a retail experience delivered across in-store, online, mobile, social and more – all synced to offer the consumer a seamless experience. Is your data setting you up for success or failure?

Are your e-commerce systems speaking to the shop floor to ensure stock levels? Do you offer an in-store pickup service to not only meet the customer’s expectation, but take advantage of additional in-store purchases (we already know they’re impulse-buyers…)? Do you have a dedicated pickup counter to minimise in-store disruption?

Beyond the technical limitations, organisational silos and cross-team miscommunication often means marketers and their agencies are shut out of valuable customer information, making the promise of providing a seamless customer journey more difficult than ever.

This isn’t just a Black Mirror episode or a lecture from a futurist; they’re table stakes to the customer of 2019. Is your business truly ready to deliver?

Martin Hong is Magnum & Co’s head of social and digital.


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