The Instagram vs Amazon Battle Begins

Instagram has taken another step towards becoming a fully-functioning e-commerce business, announcing to the public that they are adding a checkout feature to the Instagram mobile app. Save your payment information on Instagram for when you use the checkout feature so that it is both easier and faster for users to make purchases. As for the retailers selling, they will be charged a selling fee. There are over 20 brands starting to use this new button, with names like Nike, Adidas, H&M, Michael Kors, and Zara taking on the trend.

The new checkout on Instagram will obviously look different than a normal ad on the app. The items that are eligible to be checked out on the app will have a large blue button labeled, “Checkout on Instagram” that is directly underneath. Press it, and you will have to enter your email address in order for the seller to complete the order. After that, once you fill out your delivery information and method of payment, you can review your details one last time before you can finally place the order.

Before, in order to make a purchase on Instagram, you had to use a pop-up web view on the site of the retailer or seller, leaving for a lot of room for users to abandon their carts out of frustration. Instagram is hoping that if users are able to complete purchases while inside the app, it will grow into more of a habit, and more people will shop from Instagram mostly out of ease. They hope this leads to more and more sales – and that it will create a big new business for the parent company, Facebook, who recently signaled that “it expects commerce and payments to represent the future of the company.”

As of right now, the information about your payments is stored within Facebook, but used on Instagram only. It is not hard to imagine if Facebook let you sign in with the same credentials in another app in the Facebook family. (They also have been said to be working on a separate product for payments involving the blockchain and WhatsApp – yes, a cryptocurrency.) Meanwhile, Facebook has stated that they will not share anyone’s payment information with any other users or any retailers.

Instagram has the mentality that shopping represents a huge business opportunity and they are on the right track. Last year, it was reported that Facebook is building a standalone shopping app for Instagram. They also said recently that 130 million people each month are inclined to tap on the product tags in posts about shopping.

In a recent blog post, the company said: “checkout is just one part of our long-term investment in shopping.” They also said they were excited to introduce more new ways that people can enjoy shopping on Instagram.

Conclusion

The company talks in large amounts about their interest in “shopping.” This has much more meaning that easy revenue on people interested in shopping. The Facebook family of apps is trying to gain some e-commerce momentum in comparison to the powerhouse of Amazon. This is the only way to shake things up, by completely changing the game and doing it in ways that Amazon cannot replicate easily.

Question

Do you think Instagram/Facebook has a chance to be successful competing with Amazon in the e-commerce industry? Explain why.