Author: Natasha Hewitt, 19 May 2017

In the context of the ever-changing online retail and advertising landscape, Instagram has just announced a development which may evolve the way retailers can engage their customers. The social media platform is intending to create a more seamless transition from window shopper to customer, by creating a ‘shoppable’ feature on pictures. Trialled in November last year with a handful of US brands (including Kate Spade and J Crew), retailers will be able to ‘tag’ up to 5 items on each picture, which when tapped will show the price of the item and a clickable link to the retailer’s website. 

Instagram

In contrast to traditional online shopping, where customers actively search for a specific item and then make a considered purchase, Instagram shopping will be approaching passive customers who are using the platform socially. In order for retailers to capitalise on this opportunity, it will be important to engage with their key audience through well-planned, tailored adverts. This will create a more personal relationship between retailer and consumer, making users more inclined to interact with the brand. This gives retailers the opportunity to either capture an online sale, or drive shoppers to physical retail locations.

While this development is not vastly different from existing online advertising, the value that it presents is in the demographic data that can be captured by the advertisements. Instagram interaction data from 2016 shows that there are 600m active monthly users, who are 25% more likely than other social networks to be in the top income quartile. In creating interactive adverts, retailers will have access to customer insight like this, which will create an accurate depiction of the customers that are actively interested in their products. 

In terms of how this can be translated into real world value, retailers making use of this platform can use the customer insight to inform expansion strategies. This can ensure that new locations have high proportions of key target customer groups. FSP’s bespoke analysis of retail destinations provides this level of critical insight enabling retailers to make informed choices when it comes to location strategy. Going forward, retailers must ensure that physical store locations create a point of difference from online shopping, primarily through a focus on customer experience, which can be offered in-store to counteract the ever evolving online retail offer.

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