Data Story
We have consistently envisioned a future where content and shopping co-exist seamlessly. The early signs are forming.
Likefolio described "shoppable content" as a fairly new technology where consumers can not only be exposed to a new brand or product, but also take the next step and add the desired item directly to their shopping cart or even complete the process without ever leaving the app that hosts the content."
Shoppable content did not come about overnight, as this is the compounding of technology and consumer interest. Instagram and other platforms have empowered self-creators and provided a platform for large brands to engage with their customer base. Demand for shippable content on Instagram is +51% y/y, leading all platforms.
Think about the evolution. For shoppable content to emerge, it required the combination of image recoginition, software connectivity between brand product pages and the platforms (APIs), digital payment adoption by consumers and businesses, and the receptivity from consumers to engage/shop in this way. We think that as this behavior pattern continues, the unlock could be enormous.
Potential Investment Implications
From an investment perspective, we believe the implications may go far and wide. Much depends on consumer demand for this way of buying. Think about the consequences for the traditional department stores or malls where consumers visit for discovery. Or how about the opportunity this presents for brands with strong social followings? Or how about the feedback loop this has for advertising demand for these platforms? If a brand can advertise and have a consumer convert on the platform, the return on ad spend becomes clear. Changes in IDFA (identifier for advertisers) are an accelerant to this. All and all, we believe that shopping on platforms such as Instagram is inevitable.
Disclaimer: See the disclaimer page. Not a recommendation to purchase or sell any securities mentioned.