March 1, 2021

Instagram sales will be a double-edged sword for merchants



Direct sales through Instagram will be a double-edged sword for small traders, who on the one hand may increase transactions, but on the other hand they will lose access to valuable information from their customers, E-commerce expert William Harris told Efe today. .

If the social network owned by Facebook takes forward its plans to become a sales portal as well as a platform for sharing images, as recently revealed by the new head of the service, Adam Mosseri, users could buy products directly without having to leave Instagram

"From the perspective of a 'small' seller, it is possible that sales will increase, but also that information about the client will be lost due to not obtaining as much data as currently," said Efe Harris, e-commerce strategist at the specialized firm. Elumynt, who he himself founded.

The expert explained how, at present, when an Internet user sees in Instagram something that he likes, he accesses the website of the selling company and adds it to his shopping cart, the merchant obtains enough information to "persecute" that customer through messages and personalized ads on, for example, YouTube and Pinterest, among many other platforms.

However, if in the future the entire transaction – including payment – takes place on Instagram, the merchant will lose access to that data and will only be able to return to the client with the social network as an intermediary, which will significantly hamper his strategy advertising

At the end of June, in his first public interview about the future of the company since he took office, in October of last year, Mosseri explained to the Financial Times that his project for the firm is "to connect conscientiously the nodes between buyers. , sellers and the large number of influencers "Instagram.

The idea of ​​the manager is that the platform of photographs, which has about 1,000 million users in the world, take advantage of its eminently visual nature to go beyond its current showcase function for brands and creators and also become a store in which to buy those products.

"I think it will still take a few years (to become a relevant player in e-commerce)," said Harris, who predicted that although a hypothetical irruption of Instagram in the online commerce sector would shake the industry, its impact "would not be greater than the one that, for example, the entrance of Walmart had for Amazon ".

"The 'big department stores' on the Internet with well-known names like Amazon, eBay, Jet, Walmart and Target, plus Wish and Google Express, are in vogue, Instagram would not revolutionize the market, but would mean the appearance of another good option" additional to the existing ones, said the expert.

Although proportionally it still represents a small portion of global transactions, e-commerce grows year after year and in 2018 it reached a value of 2.86 trillion dollars worldwide, having experienced an increase of 18% with respect to to the previous year, according to Digital Commerce 360 ​​data.

The sector is still dominated by a few big players, mainly Chinese Alibaba and JD.com and Americans Amazon, eBay and Walmart.

A hypothetical breakthrough with Instagram in this field would hardly have effects for Alibaba and JD.com, since Instagram, like Facebook, are banned in the Asian country, but Amazon, with an overwhelming dominance in the rest of the world, could suffer the consequences.

The company led by Jeff Bezos has been, so far in 2019, the portal in which almost half of all online transactions have been carried out in the United States (47% according to eMarketer), a juicy portion of the cake that Instagram could threaten.

The application of photographs has already started a pilot program of direct sales in March, although limited to just over twenty brands (including Zara, Burberry, Michael Kors, Nike, Adidas, Prada, Uniqlo, Dior, Oscar de la Renta and H & M) and in which the payment is processed with PayPal technology.

(tagsToTranslate) sales (t) Instagram (t) weapon (t) double (t) merchants



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