Last month Instagram announced the introduction of ‘checkout’ buttons in their recently launched shoppable formats. The beta is currently available in the US market but soon to roll out on other markets too.

Instagram users who tend to engage with shoppable formats, will also be able to buy and checkout without leaving the platform. “Checkout with Instagram” launched in March in the U.S. with more than 20 major brands, including Adidas.

In one of Instagram’s spokesperson’s words on TechCrunch, “We will introduce a selling fee to help fund programs and products that help make checkout possible, as well as offset transaction-related expenses.”, they weren’t willing to share any further information with regards to the fee, however.

For the time being, shoppable ads and checkout are only available as an organic format and not on ads yet. Yet it is seen as one of the channel’s continuous efforts to brake into the ecommercespace. Most tech giants are competing against each other in the space of marketing monetisation. We’ve seen Amazon and Apple going after the ads space, while Facebook is investing on their ecommerce platform.

This focus towards ecommerce for Facebook and Instagram is mainly down to two reasons:

  • Revenue streams for tech companies need to be as diversified as possible to even out risk and ensure continues growth even if one area faces challenges
  • Continue the efforts to prove a measurable ROI for businesses, considering they’ve struggled to compete with other channels in a post-click website attribution world

This is undoubtedly a very smart move for the platform, however, challenges are expected to occur especially on the area of user information stored on the platform. Users will need to provide Instagram with their credit card information which will be stored on the system, possibly used for data collection. But with all the bad publicity on data protection, we’d expect mixed reactions as the feature rolls out in other markets.