What Can Instagram’s New Checkout Feature Offer Publishers?

Social media has long been a bone of contention with publishers.[1] While they see the value in raising brand awareness, building relationships with their consumers, and promoting their products, the lack of metrics proving a direct correlation between social media marketing efforts and sales has been an insurmountable hurdle that prevents publishers from investing their time and money. However, in 2019 Instagram introduced their new Checkout feature, which laid the groundwork to establish these metrics while opening a new sales channel for their business users. In the wake of Indigo’s $7 million revenue drop in their third fiscal quarter of 2019, publishers and sales representatives across Canada are eager to secure themselves from the backlash, and Instagram’s new feature may be the solution they have been waiting for.

Instagram Checkout allows users to store their credit card information on the app and, when they see an item tagged in a post, purchase products with a few quick taps (as seen in the Adidas example below[2]).

 

 

This move comes only one year after Instagram made it possible to “shop” items displayed in a post.[3] The previous model redirected users to the retailer’s online shop, but the transitions weren’t seamless and the high number of clicks required to purchase an item was a potential deterrent for users. Instagram’s new feature will make in-app purchases possible, (ideally) increase conversion rates seen with their existing shopping feature, and see a growth in profit for both the brands and Instagram (who will take an undisclosed transaction fee for each purchase).[4]

In order to make items available for the “Checkout” feature, the brand must have a business profile on Instagram, upload their catalogue to their public Facebook page, and sell physical products from an official store.[5] Arielle Pardes’ Wired article proposes that Instagram is moving to become their customers’ personalized shopping mall.[6] Pardes continues by saying that Instagram is combining the successful features used by online platforms such as Amazon and Pinterest to provide an all-in-one space that predicts consumer wants and provides an efficient sales channel.[7] When linked with Facebook’s (and therefore Instagram’s) extensive portfolio on each of their users, Instagram is in a prime position to create a customized shopping experience fueled by showcasing advertisements and recommending business profiles that complement user preferences.

Instagram Checkout has the potential to be incredibly successful and profitable for both Instagram and their business users. Instagram’s reach alone is staggering: they reached 1 billion active monthly users in June 2018;[8] stated that 90% of the accounts on their platform follow a business in October 2019;[9] conducted an Instagram user survey that showed “60% of people say they discover new products on Instagram” in November 2015;[10] and, according to internal data retrieved in November 2017, over 200 million users “visit at least one Business Profile” a day.[11] In regards to known statistics about the Instagram Checkout feature, Instagram released that “130 million Instagrammers [are] tapping to reveal product tags in shopping posts each month.”[12] All in all, Instagram’s reach and ability to foster connections between consumers and businesses grows every day.

Unfortunately, while the potential is there, the publishing industry may be averse to using it. There is a clear divide in the publishing industry about the efficacy of social media marketing.[13] While a study by research firm Linqia found that “over 68% of marketers cite Instagram as the most important social media network they use,”[14] it’s difficult to quantify the efficacy and benefits of using marketing campaigns on the platform. In the publishing industry, the lack of excess funds and resources encourages publishers to avoid concentrating on social media and instead focus their attention on tried and true methods to reach their audience. The introduction of Instagram Checkout provides an opportunity to gain data and use metrics to determine a return on their social media investments.[15] When combined with Instagram Insights, businesses can see which posts have performed well with their audience in the past[16] and use this data to strategically showcase the products in posts and stories to get the best chance for success. For example, if a publishing house finds that most of their engagement stems from Monday mornings, they can modify their social media schedule to capitalize on the high traffic time and post an image linked to Instagram Checkout. The introduction of a metric-based system that tracks conversion rates on native posts and stories could begin to justify the time and effort publishers have been scared to invest into social media platforms.

Instagram’s Checkout feature may have also come at the perfect time. Sales representatives and publishers across Canada are watching Indigo closely, as Canada’s largest bookstore chain revealed “a revenue drop of more than $7 million and a gross profit decrease of nearly $16 million from a year earlier” in their third fiscal quarter of 2019.[17]Indigo credits these fluctuations to the Canadian postal strike, the minimum wage increase, and store renovations,[18] but it has left many industry professionals uneasy. Instagram Checkout introduces a new sales channel that could diversify publishers’ sales channels and offer a more secure footing in the future.

If publishers wish to jump on this new opportunity, they should do it sooner rather than later. Since publishers are often not very active on Instagram and other social media channels, it may take time to establish a sales channel that can rival their established retailers. However, the initial investment could pay dividends in the future. Instagram Checkout’s potential is enormous, and Adam Mosseri, the new head of Instagram, made the company’s trajectory clear in an interview with Financial: Instagram will soon become a key retailer in the e-commerce landscape.[19] Publishers who use Instagram Checkout could also use the feature as a unique selling point for their consumers and attract more attention to their titles. A quick look at the current publishing landscape shows that almost no big-name Canadian publishers are using the shopping feature Instagram released in 2018, let alone Instagram Checkout. In fact, Canadian independent publishing icon House of Anansi is the most prominent publisher using any form of Instagram “shop.” As seen below, in a comparison with Greystone Books and the Canadian branches of Penguin Random House, Simon & Schuster, and Harper Collins, House of Anansi is the only one that offers a shop on their Instagram profile (seen with the shopping bag icon directly below their username) as well as uses the shopping feature on their posts (as indicated by the shopping bag icon in the top right corner of some posts).

 

 

When a user goes to House of Anansi’s shop, they are greeted by individual listings of their books, merchandise, and a subscription box.

 

 

Even though House of Anansi is not using the newly introduced Checkout feature, they are ahead of the game in comparison to other prominent Canadian publishers. In an analysis of their social media engagement, House of Anansi also scores higher than the three multinational publishers listed above (House of Anansi scored at low engagement at 1.6% compared to Penguin Random House Canada’s 0.98%, Simon & Schuster Canada’s 1.3%, and Harper Collins Canada’s 1.02%), yet surprisingly Greystone Books surpasses everyone with a low-engagement score of 3.36% (Appendix 1). Whether House of Anansi’s higher score is attributed to their superior social media management or their shop is unclear; however, they are in a better place to maximize the potential sales channel offered through Instagram Checkout due to their higher engagement score. If Greystone Books were to introduce a shop to their Instagram account, they would likely fare even better than House of Anansi. That said, all of the prominent Canadian publishers can do more to reach their users based on this quick analysis, and now they can use concrete metrics to determine a return on their investment.Before publishers can capitalize on this new sales channel, they must first break their previously steadfast mindset concerning social media. Publishers need to invest more resources into their social media platforms in order to gain a larger audience for their sales channels, as well as bring more attention to the authors and books they promote on their channel. Instagram Checkout is opening the doors to another sales channel, one that Canadian publishers should not ignore with its reach and Indigo’s recent shaky revenue reports.

 

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[1] Sybil Nolan, and Alexandra Dane. 2018. “A Sharper Conversation: Book Publishers’ Use of Social Media Marketing in the Age of the Algorithm.” Media International Australia 168 (1): 153–166. https://doi.org/.o0r.g1/107.171/1737/2193829787X8X1817878833008.

[2] Constine, Josh. 2019. “Instagram Launches Shopping Checkout, Charging Sellers a Fee.” Tech Crunch, March 19, 2019. https://techcrunch.com/2019/03/19/instagram-checkout/.

[3] Pardes, Arielle. 2019. “Instagram’s New Shopping Feature Makes It a Digital Mall.” Wired, March 19, 2019. https://www.wired.com/story/instagram-in-app-shopping-feature/.

[4] Pardes, Arielle. 2019. “Instagram’s New Shopping Feature Makes It a Digital Mall.” Wired, March 19, 2019. https://www.wired.com/story/instagram-in-app-shopping-feature/.

[5] Martin, Sara. n.d. “Shopping on Instagram: What It Is and How to Use It.” Metricool. Accessed December 1, 2019. https://metricool.com/instagram-shopping-how-to-use-it/.

[6] Pardes, Arielle. 2019. “Instagram’s New Shopping Feature Makes It a Digital Mall.” Wired, March 19, 2019. https://www.wired.com/story/instagram-in-app-shopping-feature/.

[7] Pardes, Arielle. 2019. “Instagram’s New Shopping Feature Makes It a Digital Mall.” Wired, March 19, 2019. https://www.wired.com/story/instagram-in-app-shopping-feature/.

[8] “Instagram | Business.” n.d. Instagram | Business. Accessed December 1, 2019. https://business.instagram.com.

[9] “Instagram | Business.” n.d. Instagram | Business. Accessed December 1, 2019. https://business.instagram.com.

[10] “Getting Started.” n.d. Instagram | Business. Accessed December 1, 2019. https://business.instagram.com/getting-started/.

[11] “Getting Started.” n.d. Instagram | Business. Accessed December 1, 2019. https://business.instagram.com/getting-started/.

[12] “New to Instagram Shopping: Checkout.” n.d. Instagram | Business(blog). Accessed December 2, 2019. https://business.instagram.com/blog/new-to-instagram-shopping-checkout/.

[13] Sybil Nolan, and Alexandra Dane. 2018. “A Sharper Conversation: Book Publishers’ Use of Social Media Marketing in the Age of the Algorithm.” Media International Australia 168 (1): 153–166. https://doi.org/.o0r.g1/107.171/1737/2193829787X8X1817878833008.

[14] “The State of Influencer Marketing 2019.” 2019. Linqia. https://linqia.com/wp-content/uploads/2019/04/Linqia-State-of-Influencer-Marketing-2019-Report.pdf.

[15] Subramanian, Krishna. 2019. “How Instagram Checkout Can Help Influencer Marketing Explode.” Forbes, July 23, 2019. https://www.forbes.com/sites/forbestechcouncil/2019/07/23/how-instagram-checkout-can-help-influencer-marketing-explode/#7901b9c23252.

[16] “Help Center—Instagram for Businesses.” n.d. Instagram. Accessed December 1, 2019.  https://help.instagram.com/788388387972460?ref=fbb_ig_shopping_setup#.

[17] Alter, Alexandra. 2019. “How a Canadian Chain Is Reinventing Book Selling.” The New York Times, May 1, 2019. https://www.nytimes.com/2019/05/01/books/booksupdate/indigo-books-canadian-chain.html.

[18] Alter, Alexandra. 2019. “How a Canadian Chain Is Reinventing Book Selling.” The New York Times, May 1, 2019. https://www.nytimes.com/2019/05/01/books/booksupdate/indigo-books-canadian-chain.html.

[19] Pavlova, Victoria. 2019. “Instagram Wants To Be A Shopping App And That’s Not All.” Forbes, June 30, 2019. https://www.forbes.com/sites/victoriapavlova/2019/06/30/instagram-wants-to-be-a-shopping-app-and-thats-not-all/#3060c2c563c9.

[20] “Houseofanansi.” n.d. Instagram. Accessed December 3, 2019. https://www.instagram.com/houseofanansi/.

[21] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[22] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[23] “Greystonebooks.” n.d. Instagram. Accessed December 3, 2019. https://www.instagram.com/greystonebooks/.

[24] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[25] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[26] “Penguinrandomca.” n.d. Instagram. Accessed December 3, 2019. https://www.instagram.com/penguinrandomca/.

[27] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[28] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[29] “Simonschusterca.” n.d. Instagram. Accessed December 3, 2019. https://www.instagram.com/simonschusterca/.

[30] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[31] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[32] “Harpercollinsca.” n.d. Instagram. Accessed December 3, 2019. https://www.instagram.com/harpercollinsca/.

[33] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

[34] Morales, Eduardo. 2019. “How To Properly Measure Your Instagram Engagement Numbers.” Medium, February 22, 2019. https://medium.com/better-marketing/how-to-measure-instagram-engagement-and-why-its-important-d368486a984a.

 

Appendix

Appendix 1

Social Media Engagement Rate Calculations:

House of Anansi[20]

Post 4: 63

Post 5: 72

Post 6: 64

Post 7: 87

Post 8: 280

Post 9: 68

Post 10: 88

Average Number of Likes = (Likes from Post 4 + Likes from Post 5 + Likes from Post 6 + Likes from Post 7 + Likes from Post 8 + Likes from Post 9 + Likes from Post 10) / 7[21]

= 722 / 7

= 103.14

Engagement Rate = (Average Number of Likes / Number of Followers) x 100[22]

= (103.14 / 6,427) x 100

= (0.016) x 100

= 1.6%

 

Greystone Books[23]

Post 4: 58

Post 5: 22

Post 6: 38

Post 7: 67

Post 8: 54

Post 9: 60

Post 10: 65

Average Number of Likes = (Likes from Post 4 + Likes from Post 5 + Likes from Post 6 + Likes from Post 7 + Likes from Post 8 + Likes from Post 9 + Likes from Post 10) / 7[24]

= 364 / 7

= 52

Engagement Rate = (Average Number of Likes / Number of Followers) x 100[25]

= (52 / 1,549) x 100

= (0.0336) x 100

= 3.36%

 

Penguin Random House Canada[26]

Post 4: 104

Post 5: 142

Post 6: 311

Post 7: 185

Post 8: 273

Post 9: 1,200

Post 10: 149

Average Number of Likes = (Likes from Post 4 + Likes from Post 5 + Likes from Post 6 + Likes from Post 7 + Likes from Post 8 + Likes from Post 9 + Likes from Post 10) / 7[27]

= 2,364 / 7

= 337.71

Engagement Rate = (Average Number of Likes / Number of Followers) x 100[28]

= (337.71 / 34,400) x 100

= (0.0098) x 100

= 0.98%

 

Simon & Schuster Canada[29]

Post 4: 146

Post 5: 535

Post 6: 200

Post 7: 108

Post 8: 202

Post 9: 124

Post 10: 112

Average Number of Likes = (Likes from Post 4 + Likes from Post 5 + Likes from Post 6 + Likes from Post 7 + Likes from Post 8 + Likes from Post 9 + Likes from Post 10) / 7[30]

= 1,427 / 7

= 203.86

Engagement Rate = (Average Number of Likes / Number of Followers) x 100[31]

= (203.86 / 15,700) x 100

= (0.013) x 100

= 1.3%

 

Harper Collins Canada[32]

Post 4: 221

Post 5: 229

Post 6: 291

Post 7: 304

Post 8: 395

Post 9: 201

Post 10: 451

Average Number of Likes = (Likes from Post 4 + Likes from Post 5 + Likes from Post 6 + Likes from Post 7 + Likes from Post 8 + Likes from Post 9 + Likes from Post 10) / 7[33]

= 2,092 / 7

= 298.86

Engagement Rate = (Average Number of Likes / Number of Followers) x 100[34]

= (298.86 / 29,400) x 100

= (0.0102) x 100

= 1.02%

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