Instagram will add e-commerce options to its TikTok rival Reels later this year. Influencers and marketers explain how it will impact their business.

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  • Instagram announced last week that it would expand its in-app shopping features to IGTV (its long-form video feature) and then to Reels (its short-form video feature) later this year.
  • The announcement follows several e-commerce updates on the app this year and comes two months after it introduced Reels in August.
  • It signals that Instagram is investing heavily in both shopping and video.
  • Business Insider spoke with several creators and marketers about the new video shopping features and how they could impact brand deals. 
  • Subscribe to Business Insider’s influencer newsletter: Insider Influencers.

Instagram is gearing up to become a one-stop-shop for e-commerce and content. 

Last week, Instagram added the ability for creators and brands to link to products on IGTV (Instagram’s YouTube-like video feature) using shopping buttons (referred to as tags) that allow users to directly purchase products in-app through Instagram Checkout. It will introduce the same capabilities to Reels, its short-form TikTok competitor, later this year.

For brands, it provides a more direct way to market products to consumers using the app’s video features. And for creators, this unlocks a new way to work with brands and sell their own products, such as merchandise. In September, TikTok also started testing in-video shopping for its creators, the app’s first e-commerce push. 

“I feel like shopping tags are a step in the right direction,” said Anna OBrien, a fashion and lifestyle influencer with over 500,000 Instagram followers and seven million on TikTok. 

“The number one thing I get asked on every Reel I make is: Where did I buy that?” OBrien said. “It’s a no-brainer to utilize this feature.” 

“I think it’s a really great idea,” said Sam Hwang, an Instagram influencer with 66,000 followers. “Reels are way more interactive than a static post will ever be.” While she hasn’t yet used shopping tags on her own posts, she would be open to testing it out on her Reels if a brand were interested.

Instagram has introduced a series of new updates in 2020 that have expanded its e-commerce features, including adding virtual storefronts, allowing creators to sell their own products, and shopping on Instagram Live.

But shopping features are still limited. Creators can only use shopping tags once they’re approved by the brand and only if the brand has enrolled itself in Instagram Checkout (the e-commerce platform within the app that allows users to directly purchase products). 

“So if I want to showcase a small business, I can tag [their account], but my users won’t be able to shop those pieces,” OBrien said. 

Shopping tags on Instagram can appear as in-photo tags or a product button in a story slide that directs users to Instagram Checkout. In the case of IGTV, a shopping button appears at the bottom of the video with a collection of every product mentioned, which users can click on and purchase without leaving the app.

Before Instagram introduced its own shopping features, the only way to direct users to products from brands was through links, which were often set up as affiliate links that sent users to a separate website or app. Affiliate links are a way for creators to make money through sales and typically they’ll earn between 1% and 20% in commission.

These links are often found in Instagram Stories or bios, but cannot be used in captions on photos or videos. Some creators may include a shortened affiliate link in a caption on a post or Reel, but the link is not functional in the app. 

Unlike affiliate links, though, Instagram’s shopping tags do not yet offer a commission model for creators. However, Instagram is exploring how it can expand affiliate marketing features on the app, head of Instagram Adam Mosseri said recently

Shopping opens up new ways to make money from video content

Brands are actively testing out sponsored video content on Instagram and the rise of short-form video on TikTok and Reels is a big driver of interest.

But brands and marketers are still asking: Does short-form video drive traffic and ultimately, sales?

Shopping features could help guide the industry as it struggles to understand the return on investment (ROI) when it comes to video. As more brands partner with influencers on these shoppable videos, metrics like how many followers click on the product link, and how many actually check out, will start to answer the question of how well short-form video converts.

And for creators, this opens up opportunities to charge additional fees for that direct conversion to sales.

“We would add an incremental fee for this as it’s much more sales-driving than even a swipe up on an Instagram story,” said Becca Bahrke, director of talent at the influencer-marketing and talent-management agency Socialyte.

Because there is no affiliate model included in Instagram’s shopping features yet, influencers won’t be able to easily get a cut of sales. So incremental fees are a way to monetize these shopping features.

Brands could also try and approximate an affiliate model themselves.

For instance, if an influencer has demonstrated the ability to drive traffic back to a brand, a potential brand deal structure might include a percentage of sales that convert in-app, said Qianna Smith Bruneteau, the founder of the trade association The American Influencer Council.

“The rate of commission for a sale is going to depend on the merchandise being sold, similar to commission rates paid by affiliates,” Smith Bruneteau said.

Swipe-up links vs. shopping tags: an unclear winner

But while some creators are excited about the potential of shopping tags, others said they had not performed as well as affiliate links in their experience.

“I actually tend to see more success or conversion from swipe-up links in stories or link in bio than product tags,” said Alyssa Coscarelli, a fashion and lifestyle influencer with over 340,000 Instagram followers. She was part of Instagram’s initial beta-testing of “Shopping from Creators,” the app’s first rollout of shopping tags.

“I think my followers are still more comfortable shopping through the brands’ websites than through Instagram shopping tags,” she added. 

Swipe-up links expire though, which Hwang said gives shopping tags an advantage. 

Unless an influencer saves their story post in a “highlight” on their Instagram feed, that post will disappear and a follower won’t be able to access that product through the influencer’s affiliate link. Shoppable tags, on the other hand, can be included on posts that remain indefinitely.


For more stories about how influencers are using Instagram, read these Business Insider articles: