How Instagram is becoming a must-have for retailers

Instagram makes it easy for brands to directly engage with customers through things like photo contests

Instagram isn’t only for sharing your #selfies with the world anymore.

Retailers happen to be boosting their digital presence on Facebook Inc.’s social networking photo app for a while now, but two recent examples show precisely how powerful it is.

Fashion brand Stuart Weitzman last week launched an Instagram video campaign that directs product posts Facebook users who viewed the ad.

The week before that, Hudson’s Bay Co.’s Lord & Taylor were built with a dress sell out quickly after 50 fashion influencers were paid to publish photos and tag them #designlab to focus on its new collection.

These two cases support a trend highlighted by think tank L2, which noted that Instagram has the highest browser-to-shopper conversion rate from the social media outlets they track.

Credit Suisse analyst Michael Exstein noticed that this finding is?impressive considering that Instagram doesn’t usually allow retailers to publish active web links in picture descriptions. However, the app makes it easy for brands to directly engage with customers through items like photo contests, where followers include specific hashtags with pictures in hopes of winning gift cards or other prizes.

“The rise of Instagram follows efforts at Facebook yet others to commercialize social networking,” Exstein said in a report.

He highlighted market research showing that while some retailers tend to be more successful than the others in gaining followers and inspiring engagement, social networking and Instagram particularly are clearly powerful marketing tools.

Credit Suisse’s data on 11 fashion retailers discovered that fast fashion providers such as Forever21 and H&M had the biggest Instagram following at more than six million each. This group also demonstrated the greatest levels of engagement, measured because the percentage of followers that like each post.

Privately owned U.K.-based retailer Primark Stores Ltd. led the way in which in this measure at 2.6 percent, followed by Forever21 at 2.4 percent.

In the mall segment, Nordstrom is far ahead of the competition with about 800,000 followers and an average of 15,000 likes per photo. Next, retailers’ Instagram tallies come in from most to least fashionable, with Neiman Marcus, Saks, Macy’s, Kohl’s and JCPenney ranking for the reason that order.

Meanwhile, Exstein discovered that off-price retailers TJ Maxx and Nordstrom Rack fell near the middle of the department store range in terms of followers and engagement.

The challenge, of course, is for retailers to best allocate their money and time amid a growing number of social media choices on the market.

“While this will foster more one-on-one conversations between retailers and consumers, it also challenges the retailer to handle a shifting marketplace and also the declining (but nonetheless effective) impact of media channels,” Exstein said.

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