Instagram’s “checkout” retail feature worth more than $10bn a year
Instagram’s new “checkout” feature could be worth more than $10 billion in annual revenue according to a recent study.
According to a research note published by financial giant Deutsche Bank, the Facebook-owned company’s new retail venture could be much more successful “than originally anticipated”.
The social media platforms checkout feature, which was launched in March, allows users to buy items directly from retailers’ and influencers’ feeds without ever leaving the app.
Analysts announced a month after the venture was first revealed that the venture could be worth up to $10 billion a year, however it is now thought this figure could be even higher.
“Per our survey, we found that the purchase frequency and purchase AOV (Average Order Value) are actually higher amongst Instagram shoppers than we originally anticipated,” the analysts wrote.
“While it may take time to scale the product catalogue and transaction velocity on the platform, we think this can provide Facebook a powerful media- and long-term revenue and engagement opportunity”.
Deutsche Bank said that 18 per cent of respondents were “very likely”, or “somewhat likely” to purchase on Instagram using the feature.
In a further sign of interest, a combined 83 per cent of respondents who have already used the feature said they were likely to use it again in the next six months.