Instagram Ecommerce: The High-Growth Business Case for the Only Social Network that Loves Products

Instagram Ecommerce: The High-Growth Business Case for the Only Social Network that Loves Products

“It is a silly, idiosyncratic piece of software,” wrote Robinson Meyer at The Atlantic, “but so simple. It says: Here is a picture. Here is a picture of a weird bird my friend saw. … It is a place to look at pictures and video.

It does not do much else. It doesn’t need to.”

That unassuming description perfectly captures why Instagram has exploded from 300 million users at the start of 2015 to 600 million today. It also captures why Instagram demolishes every other network when it comes to brand engagement and product posts.

Where other platforms have been flooded by “click here” shares, updates, and ads, Instagram is as close as you could get to a self-contained network. Even with the URL option they recently added, Instagram’s native feel is its strongest attribute.

For ecommerce retailers, this presents a huge opportunity and a unique challenge.

If you haven’t considered Instagram as a tool, you should.

If you’re skeptical, read on.

Over the next month, we’ll be exploring everything related to Instagram for ecommerce: how to get started and get selling, how to hire and outsource, how to generate leads and hack your hashtags, and (of course) how to create profitable content.

To do this, we’ll bring in experts, like the jaw-dropping folks over at Foundr Magazine whose approach to Instagram has been a cornerstone of growing a monthly readership of over one million. We'll also get direct input host of influencers and ecommerce leaders generating staggering results with Instagram.

Today, however, let’s start with the most foundational question: What’s the business case for Instagram ecommerce? Why should you hitch your brand to their rocket?

Three reasons.

1. Everybody Hates Branded Social Content

As proof, consider Beckons recent revelations that “while branded content creation is up 300% year over year, consumer engagement with that content is totally flat.” Turns out, a mere 5% of “branded content” drives 90% of engagement. Stats like that are the primary reason Joe Pulizzi has called for a ban on the term.

Andy Crestodina hits it on the head:

“Most branded content is advertising under a thin layer of information or entertainment. Scratch the paint, find an ad. It’s the brand putting itself first.”

Ecommerce content -- especially on social media -- is a chief offender. Far too many streams are dominated by one heavy-handed pitch after another. It’s not that you shouldn’t advertise on social. Of course, you should, but be cautious.

Going native on social means separating your product posts from your people posts.

On most social channels, favor relational content that’s fun, inspirational, educational, and thoroughly audience-centric over promotional content by at least a 10:1 ratio.

The exception is Instagram.

Chubbies Shorts, for instance, gets away with posts chock full of products on Instagram:

A post shared by Chubbies (@chubbies) on

 

But on Facebook, of their last 11 posts, only one is related directly to ecommerce. Here’s a sample of just two non-product, people posts:

What makes Instagram the exception?

2. For Ecommerce Engagement … Instagram Loves Brands

By design, Instagram is a genuinely social network. That can’t be said for behemoths like Facebook, Twitter, or LinkedIn. It’s one of the few personal and deeply relational safe havens online.

And yes, this even applies to brands. While Facebook has moved to a decidedly pay-for-play (i.e., exposure and interactions) model, Instagram hasn’t.

Done right -- which we’ll cover in the next two points through this series -- that means your brand can expand its base through your customer's own networks naturally. And the stats on this front are staggering.

Across the board -- as quintly points out -- brands on Instagram crush it:

Image Via quintly

Just to give that a bit more visual emphasis, here’s how those same numbers break down in bar-graph form (the bottom line, pun intended, is Instagram):

Image Via quintly

In fact, the disparity is so stark, TrackMaven had to create two versions of their “Average Interactions Per Post” graphic: one, with Instagram, and the other, without.

Image Via TrackMaven

Image Via TrackMaven

Finally, for those of you that like your glaringly obvious advantages in written format:

“The average engagement ratio per brand is 10 times higher on Instagram than on Facebook (for now).”

Instagram allows you to reach thousands of potential customers at virtually zero cost. Naturally, there are paid options on Instagram and creating great content isn’t without internal costs, but compared to Facebook’s plummeting organic reach, Instagram (again) stands out:

Image Via Convince & Convert

Rather than rely on expensive platforms or devote large sums toward your marketing budget, any user with a bit of guidance and a willingness to reach out can make Instagram work. Plus their business tools enable “companies of any size [to] be recognized with a business profile, get insights about followers and posts, and promote posts to drive business objectives.”

All this begs a very important question for the skeptically inclined: That’s great, but is Instagram a vanity metrics platform? 

Far from it.

3. For Ecommerce Sales … Instagram Moves Units

This is where the business case for Instagram is strongest.

Officially, Instagram offers four ad types:

  1. Photo Ads that promote specific posts to a targeted audience,
  2. Video Ads that follow the same promotional and targeting options but include up to 60 seconds of “sight, sound, and motion,”
  3. Carousel Ads that you can add multiple photos and videos to, which users swipe through, and
  4. Stories Ads that let you promote entire Instagram Stories at once.
    Image Via Instagram

    Ads are the only method on Instagram -- outside of verified accounts -- that let you include a call-to-action button and link: Learn More, Sign Up, Shop Now, or Install Now.

    Image Via Instagram

    Unofficially, the market for influencers on Instagram is huge … and fraught with danger. Because of that, we’ll walk through hiring and evaluating influencer ROI later in this series.

    Shwood Eyewear from Portland, Oregon is a perfect example. Over 63,000 people follow Shwood and they contend that Instagram is “crucial” to their marketing and “by far the easiest and most cost-effective way to engage with people interested in [their] brand.”

    A post shared by Shwood Eyewear (@shwoodshop) on

     

    As Shwood told Instagram analytics specialists Iconosquare:

    “The real power of the platform is in how it provides a direct, two-way, link between our followers and us. We can alert people who are interested in new products or projects and, by the same token, people can directly reach out to us with questions or issues they are having.”

    The foundation of their success comes from regularly posting high-quality images 1-2 times a day:

    A post shared by Shwood Eyewear (@shwoodshop) on

     

    Beyond that, they also run contests, partner with other companies and products, ensure they’re tagged by press whenever a related story crops up, and actively engage with their retail accounts.

    Nike saw huge success when they launched PHOTOiD, an HTML5 app that let fans upload or select an Instagram photo of their favorite shoes, customize them, and then repost the pic across social media.

    Image Via Nike

    Nike PHOTOiD generated 100,000 shoes created in the first week and an 8% click-through rate to buy. All with zero media spend.

    In 2015, fashion designer Michael Kors grew their ecommerce sales by 73%. They credit this rise to omnichannel marketing, the linchpin of which was Instagram.

    The previous year, Michael Kors augmented their already popular #InstaKors with an ecommerce twist. After signing up onsite using both email and Instagram, whenever someone liked an #InstaKors posts, they’d receive an email linking them to that product:

    Image Via Michael Kors

    Not only did the original experiment earn them coverage on Harper's Bazaar and Fashionista, but today Michael Kors’ Instagram profile links visitors directly to a mirrored version of their Instagram feed onsite where they can browse and buy in native fashion:

    Image Via Michael Kors

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    Perhaps some of the most startling numbers come from a recent Military Hippie case study, who “went from generating roughly $1,500 in sales in October 2016 to $400,000 in November 2016, $1.25 million by the end of 2016, [and] $272,000 in the first week of January 2017.”

    Their secret?

    “We became Facebook and Instagram advertising masters.”

    On the paid side, the wins are everywhere.

    Indonesian marketplace Bukalapak ran ads to drive downloads of their app and reduced cost-per-click by 39%. Pet Love ran app ads as well, which they targeted by using data from Facebook, and reduced cost per install by 30%. Fully 98% of that campaign’s website traffic came from new customers. Antique and vintage jewelry seller Suzy’s Timeless Treasures -- with just two years on the network -- credits Instagram with a 25% lift in sales.

    Truth be told, however, the on-Instagram wins are minuscule compared to the combining Instagram with onsite ecommerce.

    What do I mean?

    Yotpo’s exhaustive benchmark study -- The Future of User-Generated Content -- analyzed over 500 million online shoppers and found that people who viewed user-generated content (UGC) were 166% more likely to purchase than people who didn’t.

    Image Via Yotpo

    In a host of their own case studies, one of the dominate threads is Instagram. Vanity Planet, for instance, increased checkout rates by 24% adding Instagram UGC directly to their product pages:

    Image Via Yotpo

    Yotpo also works directly with Instagram’s “Shop Now” ads, but augments the usual paid elements with UGC -- like pictures and reviews -- you can curate and include in ads with just a few clicks:

    Image Via Yotpo

    Alternatively, taking a page out of Michael Kors’ mirroring approach, Shopify app Showcase integrates Instagram with your storefront to create “Shop Our Instagram” landing pages:

    In fact, Pura Vida Bracelets adopts this approach on their homepage:

    Image Via Pura Vida Bracelets

    Why bring Instagram onsite?

    Because your customers are far better at selling you than you are. The secret to this comes back to tapping into UGC from Instagram by capturing the images and comments your own customers create.

    Whether you’re a commercial giant like Nike or a new entry into high-grow, high-volume ecommerce, Instagram connects. Any company can promote products, engage with their customers (as well as their customer’s network), save money, and make money.

    What’s Next for Your Instagram Ecommerce Take Over?

    Now that we’ve laid out the business case for Instagram ecommerce, here’s where we’re heading in the coming weeks:

    1. How to Set Up Your Instagram Profile for Ecommerce: 30+ Examples to Inspire the Only Three Choices You Get
    2. How to Create an Organic Ecommerce Instagram Strategy: Thou Shalt and Thou Shalt Not
    3. How to Supercharge Your Instagram Sales Funnel (Because We Built a Multimillion-Dollar Business Doing It)
    4. The Rules for Creating Quality Ecommerce Content on Instagram: Service Before Sales
    5. Instagram Influencer Marketing: Three Steps to Unleash the Power of Social Celebrities in Ecommerce
    6. Tips, Tricks, and Pitfalls from the Very Best at Instagram Ecommerce

    (I’m especially excited about that last one.)

    The benefits of Instagram are massive. But kicking off a new platform or optimizing it if you’re already there can feel daunting. In everything, remember Robinson Meyer’s assessment of what makes Instagram uniquely social:

    “It is a silly, idiosyncratic piece of software. But so simple. It says: Here is a picture. Here is a picture of a weird bird my friend saw. … It is a place to look at pictures and video.”

    “It does not do much else. It doesn’t need to.”

    About the Author

    Aaron Orendorff is a content marketer at Shopify Plus as well as a regular contributor to sites like Mashable, Lifehacker, Entrepreneur, Business Insider, Fast Company, The Huffington Post and more. You can connect with him on Twitter or Facebook.