Will Instagram will work as a direct path to purchase for Middle East Retailers?

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Instagram is most used in the GCC by brands wanting to increase awareness and community building, particularly in the lifestyle, FMCG and food sectors. The popularity of Instagram amongst local users should not be underestimated. Saudi users number about 8.8 million (approx 50% of the Saudi Internet population) and UAE users number roughly 2.1 million (approximately 22% of the UAE internet population).

The following table of Penetration Rates shows users of each channel expressed as a percentage of the overall Internet Population:

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With such an engaged audience, the opportunity for commerce is high, however the inability to add hyperlinks in individual posts on Instagram prevents users reaching checkout easily.

Using SimilarWeb to analyse site traffic for 9 regional ecommerce brands, Search, Direct and Referrals were typically the highest driver of visits, with an average of 10% or less traffic coming from all Social Channels. Of that 10%, roughly 80% is accounted for by Facebook. Despite a low percentage of overall site traffic coming directly from Social Channels, the value of that traffic to the CMO is important. There may be fewer site users originating from Twitter for example, but the average checkout amount per user could be higher compared to those that visit the site directly. Users coming from Search channels may need more retargeting before they eventually checkout, thus requiring more budget spent on assets, whereas users on Instagram might spontaneously buy, meaning cost per acquisition is lower.

Whilst we don’t have access to each brand’s analytics, we can make some assumptions based on engagement rates. A recent Forrester report found that brands on Facebook only generated 0.07% fan engagement, and brands on Twitter only generated 0.03% engagement from followers. Brands on Instagram, on the other hand, had an engagement rate of 4.21%.

If we look at the number of followers for these brands across channels, the opportunity for brands to monetize their engaged Instagram followers becomes clear using Forrester’s engagement rates:

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Instagram appears to be the perfect channel for stimulating ecommerce. Given that it is purely a platform for images, there can be no better way to showcase a retailer’s goods. The research firm L2 found that Instagram has the best conversion rate of turning a casual browser into a shopper. The report also found that this is particularly true for luxury brands that post an average of 5.5 times a week, with 92% of them generating more customers.

Importantly, users on mobile prefer to stay native, meaning whatever platform they are using, they don’t want to leave it and come back to it later.

Several applications have solved this problem by building on top of Instagram’s API.  Like2Buy from Curalate is one of them. The current single hyperlink in an Instagram bio takes a user from a highly focused image of a single product (ready to purchase) to the homepage of a website, reversing the purchase funnel. Like2Buy solves this problem by replicating the brand’s photos on their page, but each one of them now being able to link directly to the exact product page on the brand’s website. Importantly, whilst a user is in that interstitial step, she still feels like she’s within the Instagram app. An added bonus is that if a user has liked particular photos from that brand’s Instagram feed, these will show up on the Like2Buy page in a separate column.

The American accounts of Bath and Bodyworks, Victorias Secret and Saks all use LIke2Buy however, their Middle East counterparts don’t. They don’t even link to an online store.  BBW Mena has a link to the store locations on the Al Shaya website and Saks Middle East has a link to a Youtube video.  

Curalate reports an 80% increase in click-through rate from the Like2Buy page to product pages, when compared to a regular link. Studies also show that users who visit a company’s mobile site via their Like2Buy page also tend to spend more time on the site than typical mobile users.

Soldsie is another service that captures impulse buying on Instagram. You can simply comment “Sold” with your email address on a photo and the app sends you an invoice for that product to your email. From that email you then click through to the checkout page on the brand website. The downside of course is that everyone can see your email address. Soldsie claims a 70% conversion rate and 60% of transactions happen after 30 minutes.

Inselly aggregates Instagram photos based on hashtags and makes them searchable by Instagram users. Brands connect their Inselly account to their Instagram account and apply #inselly to their photos. These get replicated and aggregated in an Inselly “store”. Once the Inselly link is set in the bio followers can click on it to shop items. Brands get paid through Paypal.

All these services are designed around the behaviours of Instagram users, and focus on reducing the amount of clicks to purchase. Instagram is essentially the shop window for retailers and local brands should treat it in a similar fashion, expecting to pique user interest and capture impulse buying. More importantly; for local retailers with either little expertise or resources to invest in building their own ecommerce offering, these SaaS platforms allow a quick and easy setup that can be managed by marketing departments or their agencies.

Source: New feed
Will Instagram will work as a direct path to purchase for Middle East Retailers?

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