The Power of Instagram to Drive Sales

It’s hard to believe that Instagram has been in the social game for less than a decade. Now with over 1 billion active monthly users, the network is catching up with its longer-established counterparts – and there’s no sign of it slowing down!

Instagram: A marketplace in its own right

As consumers seek more and more convenience in their shopping habits, we have seen a dramatic rise in social search. Instagram is no longer just a site to generate brand awareness. It is a marketplace in its own right, directly driving sales for retailers. Indeed, almost a third of consumers are now shopping through social channels.
To showcase this sales potential, Facebook commissioned new research on Instagram, asking 21,000 users in thirteen countries how they use the platform. The study, released this month, found that 54 percent of people surveyed made a purchase either in the moment or after seeing a product or service on Instagram. This is particularly true for fashion brands: a recent report by the Office of National Statistics showed that more consumers than ever are shopping online in this category.

Social media is important in product discovery

Even if a retailer’s social media presence is not directly driving sales, it is still incredibly important for building brand perception and presence. 83 percent of those surveyed said they discover new products or services on the Instagram. In addition, 81 percent said they actively research them there.

Instagrammers use the platform to help with the above – Facebook (2019)

By showcasing products on Instagram, whether this be the brand’s own content or content produced by their customers, retailers are giving potential purchasers a real-life view of what the products look like. This could be pivotal in helping the customer make a decision to buy. Indeed, 46% of those surveyed said they purchased a product or service after seeing it on Instagram.
With recent updates now allowing brands to ‘tag’ products in their content, the path to purchase from the platform is smoother than ever for customers. Added to this the ‘swipe up’ option in Instagram stories and it is likely that Instagram’s role in the sales funnel will continue to grow in importance.

“I really like the price tag feature because I always want to know more information before making my purchases.” 
– Sunyoung, 37, South Korea (Facebook study)

Zara uses ‘Shopping by Instagram’ to drive conversions [Source: Zara IG]

Engaging with customers

The study also highlighted that people have a desire to hear from brands in their own voices. Therefore, brands need to create interesting, relevant content for their followers.
Brands should make their social stand out and actively engage with customers. A great way to do this is to encourage customers to share pictures of themselves wearing or using the product. By creating a #hashtag, such as ‘AsSeenOnMe’ by ASOS, retailers can encourage customers to share their purchases with them. Thus, they are actively engaging with them. These hashtags should be included in their post-purchase emails.

Topshop features images by customers showcasing their products [Source: Topshop IG]

Social media’s role in post-purchase communications

More than half of customers (64 percent) are likely to follow a brand on social media after making a purchase. Therefore, it is important to include links to social channels at every step.
Research shows that shipping confirmation emails have a 80-90 percent open rate. This is the time when a customer is highly engaged with the brand, so retailers should make sure they strike whilst the iron is hot. Including an Instagram feed in shipping notifications is a great way to give customers inspiration for their next purchase. This is particularly true for fashion brands.
In addition, by reposting a customer’s content, retailer’s are creating a two-way relationship with them. This means the customer is more likely to become loyal to the brand. Research shows that existing customers are 60-70 percent more likely to repeat purchase. As a result, creating these relationships could increase profits by at least 25 percent.

Conclusion

A well-thought-out social media strategy is clearly more important than ever for brands wanting to capture new customer and retain existing ones. By including social media in post-purchase communications, retailer’s can connect with customers in an immersive way and create lasting two-way relationships.
In order to facilitate this and utilise the power of Instagram, retailers should take control of their post-purchase communications, rather than handing it over to the logistics partners.

About the Author: Katharine
Katharine is Marketing and Communications Manager for parcelLab’s UK & Nordics market. An avid shopper, Katharine is passionate about helping retailers understand the importance of efficient post-purchase communications. When she isn’t looking for the latest trends for our blog, Katharine loves discovering new restaurants in London.