Dive Brief:

• Next week, Instagram will start testing shoppable photos that can be tagged with pricing information and product descriptions, and will link directly to brand websites for purchase, the social media platform announced in a blog post today. 

• With the move, Instagram aims to play a much more prominent role in product discovery, a natural fit for its consumer base. The platform cited eMarketer research that found 84% of smartphone users in the U.S. “browse, research or compare products via a web browser or mobile app.” 

• 20 U.S.-based retailers are participating in the test phase, including Kate Spade, JackThreads and Warby Parker.

Dive Insight:

With the move to bring shoppable functionalities to its photos, Instagram is evolving its platform beyond the simple sharing of photos and video into a virtual browsing catalog. The new functionality stakes out Instagram's growing role in product discovery, especially on mobile devices. 

The closer integration of e-commerce for brands appears to be a smart move given Instagram’s focus on lifestyle curation and aesthetics. The platform now reaches 500 million monthly active users, an audience that skews toward younger, mobile-savvy demographics.  

Various social media platforms and retailers have been chasing the idea of integrating social activity with shopping for several years. There are few runaway success stories so far but given how much time consumers are spending on social media, efforts to find the right formula are likely to continue.

One challenge social media brands face in commerce is whether or not users trust them enough to share sensitive financial information. This is likely why Instagram is directing users off its site and onto retailers' sites to complete a purchase. Instagram's parent company Facebook is also ramping up commerce offerings on its Messenger platform. 

Though Instagram's service is only entering a test phase, it has the potential to not only up Instagram’s utility, but also provide a boost to retail marketers, who can lessen friction on the path to purchase with direct links from posts on the platform. The move should be a boon as well to social influencers, who are highly active on Instagram and could use the new functionality to more directly link product and purchasing information in their posts. 

Instagram put out an internal survey that found the "vast majority" of purchases take a day or longer to facilitate, with only 21% of purchases occurring on the same day as consumers begin shopping — a metric the platform is clearly looking to boost in its platform. 

“This test is going to change the scope of what we, as retailers, are capable of offering on mobile,” said Ryan McIntyre, the CMO of JackThreads, in the company blog post. “Instead of having to transition over to the JackThreads app, our customers will be able to shop seamlessly from their social media feeds — allowing us to reach guys where they’re already hunting for what’s new.”