Nation & World

Instagram trying to monetize its cool factor

Photo-sharing app has 1 billion active uses

Bloomberg photos

An employee walks past branded posters displayed at the Instagram office in New York. Once, Instagram was a simple photo-sharing app. Now, retailers are salivating over its potential as a place to sell everything from dresses to furniture.
Bloomberg photos An employee walks past branded posters displayed at the Instagram office in New York. Once, Instagram was a simple photo-sharing app. Now, retailers are salivating over its potential as a place to sell everything from dresses to furniture.
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It’s the first day of class at Instagram. Students check in at two security desks and sign nondisclosure agreements before heading up to the photo-sharing app’s Manhattan offices. The 20 or so guests, almost entirely women, stride past the cluttered workstations of Facebook engineers and into a conference room.

In attendance are executives and marketing managers from various fashion and beauty companies. Birchbox, a seller of makeup and bath products that’s raised $100 million and jump-started the subscription box craze, sent six. Another group from Madewell — J. Crew’s sister brand — sits up front. Big names from denim brand Ayr and Soludos take their seats.

Even famed designer Cynthia Rowley makes an appearance, along with the president of her label. So does her daughter, Kit Keenan, an Instagram influencer who has been featured in Teen Vogue and Refinery29.

They’ve all come to learn how to make piles of money using the ubiquitous app. But the folks at Instagram have a lot to learn from them, too.

Vishal Shah, director of product for Instagram Business, told the assembled crowd that he wants to figure out how the platform’s most avid users buy things.

“Shopping isn’t a linear journey,” he said. “It’s not even a funnel, in the typical sense. We actually refer to it as the noodle.”

That noodle is about to become the way a big part of the world consumes.

sales potential

Once, Instagram was a simple photo-sharing app, a way for iPhone shutterbugs to show off their latest cool pics. Now, its visual nature and 1 billion active users have sellers salivating over its potential as a place to sell everything from dresses to furniture.

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Of those users, 150 million interact with the 25 million or so businesses that have a presence on the app. Instagram has counted a few retailers — including Macy’s and J. Crew as partners — but the platform remains an afterthought for other big names.

Hype around the dawn of “social commerce” has dissipated of late. Online shoppers have been slow to close their retail apps in favor of social ones. Even now, 54 percent of online buyers never make purchases that begin on social media, according to a 2017 report from visual search company ViSenze.

Smaller businesses are the ones that have found creative ways to hawk their wares on social. Young entrepreneurs are starting online stores that use Instagram to funnel shoppers to their websites. Vintage clothing retailers post outfits and reward the first commenter with permission to buy each one-of-a-kind item, creating a mad dash for dresses and pumps. If you’re too slow, it’s gone forever.

facebook savior?

Instagram doesn’t facilitate these purchases, however. It’s all done manually by entrepreneurs. There’s a gap between Instagram and the retail world-a tech entity hoping to understand an industry more concerned with fashion cycles, inventory and merchandising than how to use a flashy new feature on the app.

The company has been studying expanding niches to find out how expert users create commerce — and spreading what it learns.

The class at its New York offices is meant to bridge that gap.

“We really wanna invest in this,” said Susan Buckner Rose, director of monetization product marketing at Instagram. “Really, what we want is for these businesses not to just have an Instagram presence but be able to leverage all these tools.”

Maximizing Instagram’s already huge presence is a good thing for Facebook, which owns it. The photo-sharing app provides its parent the opportunity to regain some of the cultural cool it lost long ago. In fact, some consider Instagram to be Facebook’s savior, given its younger audience and concomitant marketing advantages.

On Facebook, there are neo-Nazis and St. Petersburg trolls. On Instagram, there are sunsets and avocado toast.

the future

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Instagram, in other words, is a carefree getaway from the daily grind. For many, that’s what shopping is, too. Bingo.

But it’s not alone in making this connection. The company is encroaching on territory coveted by Amazon and traditional retailers eager to grow online sales.

But still, the process of buying something can start on Instagram but not end there. Merchants on platforms such as BigCommerce and Spotify can tag products in their Instagram posts, and little boxes designate what’s available for purchase. You can click to find the product description, which appears with more information. Then, you click through to the retailer’s own website, where the item is listed, and complete the purchase there.

Back at the classroom, Shah listened, saying, “Nothing specific to announce right now but know that we’re thinking about it.”

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We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.