Instagram has taken the next step into e-commerce - but is it a smart move?
Instagram has increasingly become an essential marketing tool for many retailers in recent years, but it looks like the Facebook-owned platform will be taking things one step further with its new ‘Checkout on Instagram’ e-commerce service.
The feature, which will only be available for US-based users, will allow customers to purchase items from their favourite brands. In its initial stages, the service will be rolled out with around 20 major brands, including MAC Cosmetics, Nike, Zara and H&M.
The service will work by users tapping a banner under an organic post and entering their payment and shipping information. They are also able to store their information for future purchases. In return, the photo-sharing app will then charge retailers a selling fee to feature the service on their accounts. This is a step up from a similar service on the app where the user will be taken to a brand’s website by tapping a pop up on a post.
This is the first major step towards the ambitions of their parent company, Facebook, which is hoping to turn the app into a fully-fledged commerce business and pave the way for other paid-for services on Facebook.
Mark Zuckerberg’s retail ambitions will probably raise a few eyebrows, given the ongoing controversies surrounding Facebook and the way it handles its users’ data.
The announcement came shortly after the Facebook CEO announced that the company would shift towards a more privacy focused model. However, it was only a matter of days after the announcement when news broke about the company storing millions of users’ passwords in plain text without any encryption to protect them. There was no evidence that there was any misuse of the data, but the risk was very high, nonetheless.
Unfortunately for the company, this was the latest in a string of data mishaps. Back in September 2018, hackers were able to directly gain access into users account from a bug in the platform’s system and prior to that, it was revealed that Cambridge Analytica, a data analysis company, pilfered the data of 50 million Facebook users and secretly kept it. This is just a couple of examples of the disturbing stories coming out about the social media empire, with others including reports of the company selling data to large corporations and even attempting to influence major elections.
We must question whether it would be smart for Instagram to make the move into retail at this moment in time. Afterall, someone could be forgiven for being reluctant to make any purchases via the app with its parent company being involved in one data violation after another.
The social media giant needs to review their priorities; its users are becoming savvier to their practices and many are choosing to limit their use on the platform or leaving it all together. In a recent survey compiled by US market research firm Edison Research, it was revealed that Facebook lost around 15 million of its US users since 2017 amidst all the controversy surrounding the company. This should be a stark reminder for Facebook to review their privacy policies and take new measures to protect users’ data before they even consider their next business venture.
Instagram reassured users that it will not share their data with the brands that sell via the new feature, but it will take a lot more than that to gain the trust of their users again.