Brands Stretch Their Legs Online

One of the most recent experiments for direct-to-consumer eCommerce is taking place on Instagram, and, if successful, could forge a path for brands that want to sell directly to online consumers.

Adidas, Louis Vuitton, Aritzia and The Kooples are among the early brand participants in Instagram’s policy of enabling consumers to buy items while in Stories, Adweek recently reported. Those brands “now have the ability to include shopping bag icon stickers on images of products that will direct potential customers to more information on those products.”

According to Instagram, some 300 million consumer use Stories daily, often to keep up with their favorite brands, including the discovery of products. “Stories are so impactful as a content format for a variety of reasons due to the in-the-moment, ephemeral feel of the content from a consumer’s perspective,” Kamiu Lee, CEO of marketing services provider Activate, told Adweek. “This format created urgency and exclusivity for would-be shoppers — a key tactic for brands and retailers alike to increase conversion.”

Brands, much like retailers, seem to be waking up to the consumer demand for commerce to happen anytime, anywhere. According to PYMNTS data, for instance, 58 percent of consumers reported engaging in contextual commerce. What’s more, 69 percent of those consumers reported having a positive experience, and 84 percent said they’d do it again, according to the recent Contextual Commerce Report from PYMNTS.

In general, contextual commerce means giving consumers the opportunity to make purchases wherever and whenever they are compelled to do so. A significant part of contextual commerce is helping consumers find new products on Instagram and via other social media.

PYMNTS also found that 58 percent of consumers have taken part in contextual commerce on or off social media. As well, 81 percent of consumers who have engaged in contextual commerce say they make at least some purchases via social media.

To encourage such purchases, brands are likely to employ an aura of exclusivity, according to observers. For instance, Lee “said that brands will likely create exclusive deals using the feature, and will use it to create launch strategies and offer pre-orders. The short life of an Instagram story will “increase interest for consumers given the shortened timeframe.”

Nike has already shown the potential of such a strategy. Earlier this year, the shoe brand pre-released its Air Jordan III “Tinker” sneakers on Snapchat with same-day delivery. The sale was only available to attendees of a Feb. 19 after-party following the NBA All-Star Game and through a collaboration between Snap, Darkstore, Nike’s Jordan brand and Shopify. The shoes sold out within 23 minutes and Darkstore, an “invisible retailer” startup, made the deliveries.

Brands also will likely have to dive further into reviews, a point recently made by Sara Spivey, chief marketing officer at Bazaarvoice, in a blog post earlier this month. “Over 56 percent of online shoppers read reviews before making a purchase, and in 2017, visual CGC saw a 55 percent year-over-year increase in conversion lift and a 96 percent interaction rate amongst shoppers,” she wrote. “Moreover, visual CGC now has the highest revenue per visitor lift of all consumer content.”

The PYMNTS Checkout Conversion Index adds even more support to the idea that reviews are vital for eCommerce — and that sellers still have a long way to go. “A product that has only one review is 65 percent more likely to be purchased than another product that doesn’t have any reviews,” the Index said. “And one-third of eCommerce shoppers will not purchase an item online unless it has positive reviews from customers.”

The stakes are extremely high. “While eCommerce sales in the U.S. are at approximately $390 billion, an estimated $200 billion in sales are foregone due to frictions in the checkout process,” according to the Index, a fact that underscores the importance of reviews (and other factors) in pushing through those sales.

Of course, the brand activities on Instagram will not address all those issues, nor solve all the problems faced online by those companies. But you can be all but certain that the coming months will bring more data and ideas about how brands should sell to web and mobile consumers.