Instagram wants to be a place where people not only discover new products, but buy them.
The Facebook-owned platform is rolling out a checkout button to let people easily buy products in its feed without leaving the app. It's Instagram's biggest attempt to close the loop between product discovery and buying.
Before, people could click to buy things on Instagram's feed but they would have to go to the retailer's site to complete the purchase.
The button is being beta-tested through the end of the year with 23 brands including Adidas, Burberry, MAC Cosmetics, Michael Kors, Nike, Warby Parker, and Zara.
"Our aim is to make it simple and convenient for our users to buy the products that have been inspiring them on Instagram," Layla Amjadi, shopping product manager at Instagram, told Business Insider. "It is not just table stakes when it comes to e-commerce, but also needed given what people were already looking at Instagram for."
Shopping has been an increasing priority for Instagram recently
Instagram has introduced a slew of features that make it easier for brands to tout and sell their products.
Last fall, the company allowed brands to add product stickers to their Stories, and added a dedicated shopping section in its "Explore" portion. Instagram also rolled out product tags in the feed.
Enabling in-app checkout was the obvious next step as brands and users wanted it, said Amjadi. More than 130 million users tap to reveal product tags in shopping posts each month, according to the company. Instagram is charging businesses a small fee to sell through the platform.
The focus on shopping is part of Facebook's effort to maximize profits as the news feed gets saturated with ads, said Meghan Myszkowski, VP of social activation at Essence North America.
It helps Facebook 'further fortify its walled garden'
The checkout feature is being tested on the participating brands' organic posts in Instagram's main feed and is not a separate ad format. Brands can still use "Shop Now" ads on the feed and in the Stories format to direct people to buy from their own websites.
"It is intended for brands to deepen the experience with their existing customers rather than use ads to attract newer shoppers," said Amjadi.
But Phillip Huynh, head of paid social at 360i, sees the expansion as a way for Instagram and Facebook to collect more data on what people buy and compete with Amazon and Pinterest in shopping.
"These data points could help them create on-platform targeting segments to replace the third-party sources that powered Partner Categories, which was shuttered," he said. "It helps Facebook further fortify its walled garden by creating a segment of consumers who have a deep history of interaction with Facebook/Instagram. The main difference is that it would be powered by one of the world's richest sources of interest and engagement data, allowing it to function as a true discovery platform that can drive brands' bottom-line KPIs."
Huynh said that the fact that Facebook is taking a cut of these sales, might eventually make it a significant revenue stream. When that happens, it'll likely be converted into an ad format that Instagram will charge for. He also predicted the checkout button would be integrated into paid products.
'Social commerce' companies are threatened
For Linz Shelton, director of global social media at Michael Kors, one of the beta-testers, the checkout button turns Instagram into an e-commerce department store.
"We have more than 14 million organic followers for our account, so we know that our customer is there and she's there in a shopping environment," she said.
But the checkout button threatens "social commerce" companies like Curalate and MikMak, which built their businesses around hacking and optimizing for the checkout process on Instagram.
"Overall, it doesn't look great for those platforms as their key product would be replicated and potentially streamlined on Instagram for free," said Huynh.
