After one year, Instagram’s in-app Checkout feature is growing, adding more brands week by week.
Brands are flocking to test the feature — which is still in closed beta and offered to select brands at this point. Checkout enables customers to buy products directly through the Instagram app. With Checkout, users can store credit card information and shipping data within the app, which allows for a seamless, one-click shopping experience. But at this stage, many brands have yet to see a big sales lift from the new shopping channel.
It’s still early days for the feature, which launched in late March 2019, with more features being added and more brands gaining access over time. On Facebook’s fourth-quarter earnings call, COO Sheryl Sandberg said hundreds of companies are currently testing Checkout in the U.S. Since December, brands including Abercrombie, Olivia Palermo, Rebecca Minkoff, Tobi and Blue & Cream have started to test the feature.
Revolve was one of the initial partners given access to Checkout, along with 25 other brands. Revolve’s new Gen-Z brand, Superdown, which officially debuted in April 2019, is also on Checkout now but was not part of the initial group of brands testing the feature.
“[Instagram Checkout] continues to be small and nascent. It’s something that Instagram’s continuing to iterate on. We’re excited about the long-term opportunity of it,” said Mike Karanikolas, co-founder and co-chief executive officer of Revolve on the brand’s fourth-quarter earnings call in February.
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Karanikolas said on the call that while the feature is proving a success so far, it’s still a “work in progress,” and it’s not a big part of the company’s business at this point.
“We’ll continue to monitor the adoption rate, the contribution to our customer experience and the results, and invest accordingly,” said Raissa Gerona, chief brand officer at Revolve. The company declined to share specific results related to Instagram Checkout.
Michael Stars was part of a later wave of brands to test in-app checkout, adding the feature in December 2019. Sudie Smith, director of e-commerce and digital marketing, said before adding Checkout, the company had set up a shoppable account, meaning followers could tap products that Michael Stars tagged in its feed but were taken to the brand’s e-commence site to make a purchase. Prior to gaining access to Checkout, Smith said Michael Stars saw very few purchases driven through the Instagram app. With Checkout, the company sees about one transaction a day. So far, on the brand’s biggest day on the platform, it saw three separate transactions.
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Adoption of the feature from consumers may be slow now, but Dan Gardner, CEO of digital creative agency Code and Theory, said if and when Instagram opens this feature up to any company, brands will likely see a higher purchase rate through the app. For now, he said, Checkout “hasn’t hit that threshold yet for the consumer.”
“If the [in-app Checkout] feature rolls out to everybody, it will have some level of success. Consumers will get more used to it and [brands will] see a bigger lift happen. Brands won’t necessarily replace [their] own e-commerce channels with Instagram Checkout, but it will be another meaningful way to convert,” said Gardner.
However, Gardner said he is skeptical about higher price-point products and luxury brands selling within the Instagram app.
“Will it convert a $50 item or $120 pair of shoes? Probably. But there will be a price point where there will be fall-off quickly,” he said. Gardner estimated products over several hundreds of dollars likely won’t see a huge sales bump from Instagram.
Instagram is working with brands across price points to test the feature, and there is a handful of high-end and luxury companies using Checkout. Currently, Instagram users can purchase a $5,990 silk strapless gown from Oscar de la Renta, a $2,195 leather bag with fringe from Balmain and $1,200 leather booties from Prada. Dior was an original launch partner for Checkout but appears to no longer be using the feature.
Olivia Palermo added Checkout in October, which now includes her ready-to-wear collection that launched last month. The company has not shared specifics on its sales through Checkout.
“Olivia was asked to be a beta tester in summer 2018 for IGTV. We saw a lot of success with that by being an early adopter there, and so we saw nothing but benefits in taking Instagram up on this offer,” said Derek Conrad, vp of communications at Olivia Palermo. “Before this tool existed, social was a big point of discovery for people. Olivia’s audience looked to her feed as a point of inspiration and discovery, and so being able to remove some of the extra steps to shop her looks has been a huge benefit.”
