If you thought Amazon (US:AMZ) was the most influential force in the modern retail industry, you wouldn’t be wrong. But to assume Amazon is the only digital disrupter ignores the rise of social media and the part these platforms are playing in determining shopping behaviour. The phenomenon has been dubbed the “rise of social shopping”, which even traditional high-street-bound retailers such as Debenhams (DEB) admit is becoming an increasingly important part of their future growth strategy.
What is Insta-shopping?
According to social media management specialist Sprout Social, the latest statistics for the Facebook-owned (US:FB) social media platform Instagram show it has more than 800m monthly active users, with many predicting it could reach 1bn by the end of 2018. That’s more than double the monthly active users of Twitter and over three times as many users as messaging platforms such as WhatsApp. Instagram is predominantly image-driven, and has recently introduced video and television features to take on Snapchat and Youtube too.
One of the biggest changes Facebook has made since buying Instagram for $1bn (£777m) in 2012 is the function ‘Shopping on Instagram’, which was first made available last Autumn. This feature provides businesses with an immediate storefront for customers to explore products with just a single tap. With Shopping on Instagram, brands choose which photos to feature, tag posts with up to five products per image before adding filters or captions to enhance the post’s visibility. Those perusing the app for fun might not be overly aware what this new feature can do for e-commerce, but businesses haven’t failed to notice the difference it can make. New-York-based fashion brand Natori claimed to have seen a 100 per cent rise in revenues derived from the social media app, while mum-and-baby retailer Spearmint Love said it saw an 8 per cent uplift in overall purchases.
It’s all in the stats
According to market analytics specialist Brand Watch, 90 per cent of all Instagram users are under 35 years of age, with the largest demographics based outside of the US and typically male, between the ages of 16 and 24. It estimates that 80m photos are shared daily, and that engagement with brands on Instagram is 10 times higher than Facebook, 54 times higher than Pinterest and 84 times higher than Twitter. More importantly, over a third of Instagram users have used their mobile to purchase a product online, which makes them 70 per cent more likely to do so than non-users.
The coverage is vast. From a random poll of the top 100 brands in the world, 90 per cent have an Instagram account. More specifically, 96 per cent of US fashion brands are on Instagram. On the other side, 50 per cent of Instagram users follow brands, making them the types of social networkers who are most likely to do so.
The numbers suggest that for companies with something – correction, anything – to sell, social media offers up a ready-made, willing and engaged audience. That ready-made customer base is happy to browse, and ready to be told what to buy. Thanks to social media’s preference for imagery, customers are immediately able to understand how garments will fit, what they might look like, and how appropriate they are for different scenarios. It’s a departure from the usual, staged imagery found on retailers’ own websites. Social media platforms help build trends too – something online retailers such as Asos (ASC), Boohoo (BOO), and Zara owner Inditex (Sp:IND) can follow to capture the attention of fashion-conscious consumers.
The powers of ‘Insta-brands’
What social media platforms also provide is a complete alternative to traditional retailing. Rather than opening stores and paying for expensive marketing campaigns, the apps act as their own shop windows. It’s direct to consumer, and success can be instant too.
Réalisation Par, which means 'made by' or 'styled by,' was a fashion brand founded by Australian friends Alexandra Spencer and Teale Talbot in 2015. Ms Talbot told Italian Vogue in March this year: “Social media has meant we have access to a global market and a wide community of followers. We design season-less pieces to make the brand all-inclusive. We don’t have a strict marketing strategy, we just like to photograph our friends and the women who inspire us.” It’s a free-flow business plan to say the least – but one many more traditional retailers probably envy. Ms Talbot told The Times in July: "We see within seconds how popular a certain piece or shape is. We see what people are commenting on, giving us live feedback that we can respond to immediately.”
Earlier this year, as part of a wider transformation strategy, luxury house Burberry (BRBY) announced that it too would move to producing ‘season-less’ collections – in effect, ditching the traditional monikers like Spring/Summer and Autumn/Winter. The company is also moving towards a ‘see now, buy now’ model, which means that customers can shop products online as soon as they are paraded down the catwalk (live-streamed on the group’s website, naturally) rather than wait the traditional six months before new garments and accessories hit the shop floor.
‘BFF’ Marketing
While these brands would have you believe that an attractive photo here and well-placed hashtag there are all that’s needed to drive sales via social media, the truth is a tad more complex. Social media has also given rise to what’s known as ‘BFF marketing’, and that’s largely what social media offers – a marketing database unprecedented in scale. BFF (rough translation: best friend forever) marketing takes a millennial-friendly, chatty and intimate approach, giving customers the idea that the brand is your friend and is designing products just for you. It’s something Boohoo has been particularly good at, especially via its youth-orientated brand PrettyLittleThing. Marketing emails typically open with greetings like “Hey girl!” and “Did you forget something?” to encourage customers to follow through with purchases.
Sustainable, direct-to-consumer US clothing brand Reformation was kick-started with a newsletter in March 2013 that detailed the popular West Coast music festival Coachella – an event some accuse of being designed purely for its potential on Instagram. Thanks to this well-timed and image-heavy push, Reformation found itself instantly profitable. According to numbers published by The Business of Fashion, the brand’s sales jumped from $18,000 in February 2013 pre-newsletter, to $175,000 in March.
