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Web & Commerce · 2019

Instagram Checkout and shoppable posts: what DTC brands should do

Instagram now lets US shoppers buy without leaving the app. Here is what Checkout changes for direct-to-consumer brands, what it costs, and how to prepare.

7 min readPublished April 9, 20197 sections
20192019

Overview

The short answer

Instagram Checkout, announced on March 19, lets a US shopper tap a product tag, pick a size and color, and pay inside the app with a saved card, without ever visiting the brand's website. For now it is a closed beta with a short list of large brands, and Instagram takes a selling fee on each order. For most direct-to-consumer brands the right move this year is to get fully set up on Instagram Shopping tags, treat Checkout as a channel you will test when it opens, and start deciding now how much of the customer relationship you are willing to hand to the platform.

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What launched, and what did not

Web & Commerce · 2019

The announcement covered one feature: native checkout for product posts from roughly twenty launch partners, among them Nike, Adidas, Zara, H&M, Warby Parker, Outdoor Voices and a handful of beauty brands. US users only, US shipping only. The buyer enters a card once, Instagram stores it, and later purchases from any participating brand take a couple of taps. Order status, returns and support messages are handled inside the app.

What did not launch is general availability. There is no application form for most merchants, no published fee schedule and no published timeline. Instagram's own figure is that 130 million accounts tap on a shopping tag every month, which is the demand the company is now trying to capture before shoppers leave the app. Expect the beta to widen in stages, probably via the commerce platforms Instagram already works with.

What every business can use today is the layer underneath: Instagram Shopping. A business profile, a connected Facebook page, a product catalog synced through Facebook Business Manager, Shopify or BigCommerce, and an approval that typically takes a few days. Once approved you can tag up to five products in a feed post, twenty in a carousel, and one sticker per Story. Tapping a tag shows a product detail page and a link to your site.

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Why DTC brands should pay attention anyway

Web & Commerce · 2019

Checkout changes the economics of a channel many DTC brands already depend on for discovery.

Fewer steps. A mobile shopper who taps a tag, waits for a site to load, creates an account and re-enters card details drops out at every step. Mobile conversion rates on DTC sites in the United States commonly sit somewhere between one and two percent against three to four on desktop, and page load is the biggest culprit. Removing the site visit will raise conversion on impulse purchases, especially under $75.

A new fee line. Instagram has not disclosed the selling fee. The reasonable planning assumption is a percentage comparable to other marketplaces rather than the two to three percent you pay a card processor. Model your contribution margin at several fee levels before you decide what to list.

A thinner customer relationship. The payment account belongs to Instagram. You receive what you need to ship the order, but the buyer has not visited your site, has not seen your cross-sells, has not been pixeled for your remarketing, and may not be on your email list. For brands whose repeat rate is their business model, that is the real cost.

Creators become storefronts. Instagram has said shopping from creator posts is coming next, with tags from approved influencers leading to the brand's checkout. That makes influencer partnerships measurable in orders rather than swipe-ups, and it will change how those deals are priced.

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A decision rule for whether to opt in when you can

Web & Commerce · 2019

When Checkout opens to you, run each product line through four questions.

  1. Is it an impulse purchase? Simple products with few variants and prices under about $100 gain the most from a two-tap checkout. Considered purchases with sizing guides, configurations or financing lose less from a site visit.
  2. Can the margin absorb a marketplace-style fee? If your gross margin after shipping is under 40 percent, a selling fee plus discounting pressure can leave very little.
  3. How much of your revenue is repeat? Above a 30 percent repeat rate, the loss of the owned relationship matters more than the first-order lift. Below it, Checkout is closer to pure acquisition.
  4. Is your site the problem? If mobile checkout on your own site takes more than three steps or four seconds to load, fix that first. It helps every channel, not just Instagram.
SituationLean towardWhy
Low price, few variants, high marginCheckout when availableConversion lift outweighs fee
Subscription or high repeat rateTags to your own siteOwned data drives the model
Complex or sized productTags to your own siteSite does the selling
New brand with no audienceTags plus paid, test laterDiscovery is the bottleneck
Questions this guide answers

The decisions behind the topic.

Every piece we publish starts with the questions a business owner actually asks. The full answers are at the end of the page.

QuestionCan my brand get Instagram Checkout today?
QuestionWhat does Instagram Checkout cost?
QuestionWill Checkout hurt my customer data and email list?
04 / 7

Get the foundations right this quarter

Web & Commerce · 2019

Whether or not you ever use native checkout, the same setup work is required.

  • Clean catalog. Titles, descriptions, images and prices in the Facebook catalog should match the site exactly. Rejections are usually caused by missing product pages, policy-sensitive categories or mismatched prices.
  • Square and vertical imagery shot for tags. Products should be visible and tappable. Lifestyle shots with the product small in frame perform poorly as tagged posts.
  • Tag consistently. Brands that tag most of their product posts, and use the product sticker in Stories a few times a week, see shopping traffic compound. Occasional tagging does little.
  • Shop tab merchandising. The Shop tab on your profile is a storefront. Arrange collections, keep bestsellers at the top and remove sold-out items.
  • Measurement. Set up the Facebook pixel and UTM parameters on tag links so shopping traffic and revenue show separately in Google Analytics. Instagram Insights reports product views and taps; your analytics must report orders.
  • Paid amplification. Shopping posts can be promoted as ads with product tags, and dynamic product ads on Instagram already pull from the same catalog. Budget a test at $30 to $100 a day for a month and judge it on cost per purchase, not engagement.
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Mistakes we see

Web & Commerce · 2019

Treating it as a social media task. Catalog quality, inventory sync and checkout are commerce problems. If the social team owns Instagram and nobody owns the catalog, tags break and products disappear.

Launching with the full range. Start with ten to twenty hero products that photograph well and ship easily. Expand once the operational kinks are out.

Forgetting returns and support. Inside Checkout, the buyer messages you through the app and expects marketplace-speed answers. Someone has to staff that.

Measuring the wrong thing. Likes on shoppable posts tell you nothing. Track product page taps, click-through to site, orders attributed to Instagram and, over time, repeat rate of Instagram-acquired customers against other channels.

Ignoring your own mobile checkout. Instagram's bet is that your checkout is slow and painful. Prove it wrong and you keep the margin and the customer.

Sigma Extreme

Platforms this usually involves

We work with the stack that fits the journey rather than forcing a fixed toolset.

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How Sigma Extreme approaches this

Web & Commerce · 2019

We treat Instagram Shopping as part of the commerce stack, not a social add-on, and run it in four stages. In discover we audit the catalog, the mobile checkout, current Instagram performance and unit economics by product line, so the decision about native checkout is made on margin rather than hype. In plan we choose the launch range, agree the content cadence and tagging rules, define the measurement setup and model the fee scenarios. In build our web team fixes catalog sync and mobile checkout while the creative and social teams produce tag-ready imagery and the Shop tab, and growth sets up pixel, UTMs and a paid test. In improve we review shopping taps, click-through and orders monthly, prune what does not sell and prepare the application and operations plan for Checkout when it opens.

Running brand, growth, web and technology together matters here because a tagged post only converts when the photography, the product data, the landing page and the ad budget all agree. When those sit with different vendors, the channel stalls at the first broken tag.

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How we've done it before

Web & Commerce · 2019

A representative engagement was a direct-to-consumer apparel brand that had a large, engaged Instagram following and almost no attributable revenue from it. The work started with the unglamorous part: a catalog that had drifted from the Shopify store, a mobile checkout that took five steps, and no separation of Instagram traffic in analytics. We rebuilt the product feed, cut checkout to two steps with express payment options, produced a library of square product imagery, and set a tagging routine for feed and Stories backed by a modest dynamic product ad budget. Within a quarter Instagram moved from an awareness line in the report to a measurable acquisition channel, and the brand had a clear view of which products would justify a selling fee when native checkout becomes available. You can read more about that kind of work in our e-commerce case study.

Sigma Extreme

Related case studies

Representative delivery patterns showing how this connects with the rest of the system.

Next step

If you want to know whether Instagram Checkout will help or hurt your margins, and get your shopping setup ready either way, we can audit the catalog, the checkout and the numbers. Talk to us and we will start with the product economics.

Request a proposal →
FAQ

Frequently asked

Can my brand get Instagram Checkout today?

Not unless you were one of the launch partners. Checkout opened in March as a closed beta with a couple of dozen large US brands, and Instagram has said it will expand over time. Any business with a business profile and an approved Facebook catalog can still use shopping tags that link out to its own site.

What does Instagram Checkout cost?

Instagram charges the seller a selling fee on each order, which it has not published and which varies by partner. Expect it to be in the territory of marketplace commissions rather than card processing fees. Shopping tags that send people to your own site remain free apart from your usual payment processing.

Will Checkout hurt my customer data and email list?

Partly. When someone buys inside Instagram, the payment relationship is with Instagram and you receive the order and shipping details rather than a full account signup. Brands that rely on post-purchase email flows should plan how to invite those buyers onto their own list rather than assume it will happen.

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