Is Target’s Latest Move A Key Moment for Post-COVID-19 Retail?
In March of 2019, Instagram began rolling out a closed beta test of Instagram Checkout, a new service that would allow brands to sell their goods without users having to leave the Instagram app. While the app has allowed brands to link to their own eCommerce sites outside of the app for some time, integrating shopping and checkout into the app adds a new wrinkle, and an extremely promising one at that.
Initially limited to just 25 brands, the closed beta included names like Nike, H&M, Michael Kors, Warby Parker, Burberry, Doir and Prada. The fit for these high-fashion brands was a very natural one, marrying a highly-visual, influencer-driven platform with ecommerce. It very logically moved the point of sale right on top of the point of influence.
Last week, Instagram Checkout took a huge leap forward from “promising” when Target became the first mass retailer to jump onboard the platform. Customers will now be able to purchase products directly from the retailer via their @Target and @TargetStyle Instagram accounts.
Target coming onboard will no doubt have many other retailers watching closely, and could be a first step to swinging the doors wide open for Instagram Checkout.
Over the past couple of years, we’ve seen an emerging trend among retailers to create a more experiential retail environment. Last April, we wrote a blog on Macy’s bringing on Story founder Rachel Shechtman to help them build 1,500 sq. ft. themed feature sections in their stores that would dramatically change the feel of the store every two months. And in September, we talked about Target’s partnership with Disney to revitalize a portion of the in-store experience.
In a post-COVID-19-crisis world, with brick-and-mortar hampered and eCommerce soaring, Target’s latest move shows how and where experiential retail may need to evolve. In this case, they have flipped the script entirely. Instead of trying to attract the customer with the store experience, they are moving the store into an experiential environment created by the customer.
In case you’re still doubting Instagram’s power as a platform, let’s take a look at the latest statistics. According to Hootsuite, Instagram now boasts 1 billion users per month, half of whom use the app every day. Users spend an average of 28 minutes per day on the platform and 1/3 of the most-viewed stories are from businesses. Target’s two Checkout-enabled accounts, @target and @targetstyle, have 4.4 million and 2.2 million followers, respectively.
Much remains to be seen, but if brick-and-mortar has indeed suffered a degree of permanent damage during the COVID-19 crisis, eCommerce tactics like this are one potential path that would allow retailers to differentiate their brand experience from the more transactional eCommerce experience of Amazon.
As pointed out by Retail Prophet Doug Stephens in his op-ed The End of Amazon, “We, as human beings, don’t merely shop to acquire products. Not all the time anyway. We also shop to discover new things, to socialize with friends and to entertain ourselves. We shop for the thrill of the hunt and the associated dopamine rush to our brains when we find it.”
The psychological factors highlighted by Stephens here are in lock-step with the Instagram experience: discovery, socializing, entertainment and small doses of dopamine rewards when we find something that we enjoy.
If Target is able to find success with this platform, it could open the floodgate to other retailers. It’s not difficult to see how this could translate from fashion and home goods to other categories like consumer electronics or furniture. With the growth of online grocery, it’s not hard to imagine how this might be incorporated into a glamour shot of a dish with ingredients ready to buy and be delivered to your front door.
According to Instagram COO Justin Osofsky, “We want to make it easy for people to instantly shop every product they discover on Instagram. That’s why we collaborated with Target to set up a virtual store that makes discovery to purchase seamless right in the app with Instagram Checkout.”
Given those words, there’s little doubt Instagram has big plans for bringing these options to other retailers in the near future. Keep an eye on this new and developing option for eCommerce, as the stars seem to be aligning for tremendous growth.
What do you think about the potential for Instagram checkout? Do you see opportunities for your category here? We’d love to hear what you think. Sound off on social media now and join the conversation.