According to a new report by Hubspot, Instagram's shopping tools are enabling a higher return on investment than any other marketing strategy on the platform. But success isn't guaranteed. The same study finds that while 48 per cent of sellers are enjoying higher than projected orders - putting their fulfilment operation under pressure - 38 per cent struggle to make sales. So, why do some brands and sellers fall short of expectations while others thrive? What is the key to successful selling on Instagram?
Enabling direct sales to consumers has become something of a priority for Instagram over the past two or three years and there are a number of options for brands. In addition to Instagram Shops -essentially storefronts -companies can sell to their consumers via buttons on newsfeeds and stories. Then there is Live Shopping, where items in a store are promoted from a real time video. Meanwhile, Guides Shopping provides brands with the option of offering product roundups and advice, again linked to sales opportunities. Finally, we have "Creator Shopping" which brings the all-important influencers into play.
When Hubspot questioned 580 Instagram marketers, it found that "Shops'' represented the most popular of the options, with 47 per cent of marketers having used that particular channel. However, all the tools have been fairly extensively used by brands. And in an indication that at some stage we may move to a China-style future, Live Shopping currently delivers the biggest ROI.
A New Frontier
But Instagram commerce remains something of a new frontier for marketers. While there is interest, there is also a degree of caution. Amy Stenson is Social Media Manager for social media agency, The Audit Lab. As she sees it, there is a learning curve for brands. "Many clients are quite new to the shopping features on the platform and they need a lot of help," she says.
Sjef Kerkhofs, a partner at full-service social media agency, Daily Dialogues sees a similar circumspection. "Normally, clients approach us intending to use Instagram as a channel to reach and inspire their audience. It's mostly looked at as a channel to gain awareness and to boost engagement," he says. But as Kerkhofs points out, by focusing exclusively on awareness, brands may be missing out on revenues. "Social media is sort of a 'funny' channel. It's one of the only channels in which you can go from awareness to conversion within a few - sometimes even a one -post format. So, what starts as a channel for awareness, can quickly change into a channel that also brings home cash." But here's the potential problem. Instagram is not necessarily seen by its users as a place to make purchases. Any strategy that introduces direct sales needs to be handled with care.
A Race To The Bottom Line
Colin Jacobs is Managing Director of Immediate Future,a social media consultancy that was founded 17 years ago. Its clients include X-Factor, Sony, Fujitsu and Centre Parcs. He argues that many advertisers are not approaching Instagram commerce strategically. "There is a response to an immediate need," he says. "And at the moment, that need is an expedited race to the bottom line." Now, a race to raise revenues is not necessarily a bad thing in these economically turbulent times, but Jacobs' point is that brands are not necessarily thinking through their strategies, both in terms of wider marketing objectives and the specific opportunities provided by Instagram itself.
Jacob says brands should begin by thinking about their customers. "The best place to start is by asking who are our customers? Where are they on social media? And how can we serve them?" he says. Amy Stenson agrees. "The successful strategies are those that have factored in their target audiences meticulously," she says, But is it enough to simply put sales-focused content online and assume that sales will jump. Jacobs believes that for Instagram commerce in particular and social media shopping more generally, the inbound strategy of attracting people to a platform should be underpinned by an outbound campaign to build engagement .This, he says, is the approach taken by brands in China and the result has been an explosion of sales via "live Streaming." The kind of explosion, in fact, that we haven't seen in Europe as yet. But let's assume that you successfully attract the customers. What converts them from browsers - simply swiping and scrolling between videos- to buyers"
On Instagram, you have to nurture your user. Inspire them, rather than inform them. And then make them convert," says Kerkhofs. But what does that mean in practice? Anna Stella is CEO of BBSA, a marketing outsourcing agency, with a client list that includes Holiday Inn, VW, the European Union and Upwork.She stresses the need for clarity of purpose. When the goal is to make sales, the Instagram user should be aware of that intention. "I think what really works is being clear that you want to sell," she says. "You are not just posting random stuff." That said, the content has to entertain, engage and inspire. Simple sales messages won't necessarily work. "One thing that works is to show what is going on behind the scenes," adds Stella"It's also important to tell stories and ask people questions."
Differentiation may be a problem, though. For instance, travel brands are popular on Instagram but in a picture sharing media Colin Jacobs questions how much blue sky and yellow sand can consumers take. The challenge is to do something that looks a bit different.He cites holiday resort company Centre Parcs as an example of a company that gets it right for its audience. "They show a lot of pictures of family activities in their resorts," he says. It's content that the audience can relate to.
Bring on The Influencers
And of course, brands don't have to do everything under their own banner. As ever, influencers have a role to play. Influencers or 'creators' are the 'gold' on social media. Not only for brands but also for the channels themselves. It's not for nothing that they invest billions into keeping influencers active on their platforms," says Kerkhofs.
He cites the example of a Daily Dialogues client, the lingerie and swimwear brand client, Hunkemoller. "It is a perfect example of a brand that gets that message. In multiple countries, they work together with local influencers. To promote campaigns, but also to develop joint promos and collections. Works like a charm."
But does Instagram work for everyone? Well possibly, but as things stand some brands do better than others -travel and fashion are particularly popular,as are football and other types of sports clubs. But does that translate to sales? Colin Jacob says relatively low-cost products can do well in terms of direct conversions. With higher cost goods, Instagram may be a staging post on the way to a conversion. But why use Instagram? After all, brands have their own websites. Well, the nature of the medium makes it particularly useful for creating a buzz around new products - as the Hubspot report points out. It's also a platform discovery."90 per cent of people on Instagram discover new products. And it's a way place to show new products," says Stella.
It's that ability to introduce customers to products that may be Instagram's biggest strength.