Social Commerce: The Code Hasn’t Been Cracked Yet

Instagram’s shoppable posts show promise, but consumer reluctance remains

Author: Rimma Kats

March 22, 2017

Social networks continue to try to crack the code of social commerce, betting that there must be something that will persuade users to include shopping and purchasing as part of their social experience.

The latest effort is by Instagram, which began testing new commerce features in November, with retailers like Kate Spade & Co. and Warby Parker participating in the trial period.

The new shopping experience allows sellers to tag products within an image as available for purchase. And consumers who see the post can tap on the image for pricing and product information.

If they want to buy the item, they simply click on the “Shop Now” banner, which redirects them to the brand’s site.

The effort basically coincided with Twitter’s decision, announced in January, to abandon its buy button, saying it couldn’t justify investing in the feature, and that targeting and scaling had proved difficult.

The core challenge is that consumers have resisted using buy buttons and other commerce features within social platforms.

The reality is that most people just aren’t that interested in making purchases while they are within social environments.

“Many companies have tried social commerce, but the reality is that most people just aren’t that interested in making purchases while they are within social environments,” said Debra Aho Williamson, principal analyst at eMarketer.

“One thing Instagram has going for it is that it is a popular platform for following accounts related to fashion,” she said. “That means users might be slightly more inclined to be in a purchasing mood when they use Instagram, compared with when they are on other social properties.”

Consumers have sent mixed signals on social commerce.

A September 2016 survey from Sumo Heavy—a digital commerce strategy, design and development consulting firm—found that roughly one in five US internet users have at least tried purchasing a product on a social site.

That’s a relatively low interest level, but given the sheer size of the social audience, it’s a meaningful group.

“These new shoppable posts have potential,” said eMarketer analyst Krista Garcia. “Instagram is wise to initially roll out this format to fashion and beauty brands, since that's a more natural fit for the platform.”

Instagram is great for highlighting products in context, Garcia said, and influencers can have a lot of sway there. “But I do think these tagged posts might have limited application for brands and retailers that are less lifestyle-focused,” she added.