The Power of Instagram's Shopping Feature

By: Valeria Ramos

It is no secret that online shopping has been steadily replacing traditional, retail stores. Just last month, Barneys New York filed for bankruptcy following a decline of consumer traffic as people continue to add to cart from the comfort of their couches.

Although not on par with Amazon, Instagram is becoming an online shopping giant, providing its one billion users with customized ads and in-app checkouts for its stoppable posts.

Not longer is Instagram just home to selfies and travel pictures. Our feeds are now filled with shoppable content from brands we follow and brands Instagram recommends based on our browsing behavior.

If it sounds like this app is trying to take your money, well, that's because it is. Instagram makes undisclosed commissions on each purchase, charging brands a fee to enable shoppable posts.

Already an essential marketing tool for brands, these shopping features make Instagram a more powerful player in both the tech and retail space. In fact, Instagram reports that 130 million people tap on product tags in posts and Stories every month.

In-app checkouts, shoppable posts, and custom ads are just a few ways Instagram is generating more money for parent company Facebook.

As of 2019, Instagram is estimated to make up 20 percent of Facebook’s total revenue, according to a financial services company, Jefferies. 

As physical stores continue to close their doors, we're wondering what Instagram will take over next.