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With countless independent, traditional, and direct-to-consumer brands on its roster, Verishop is focused on delivering what is missing from today’s social media. Millennials and Gen Z want to shop online; they want to window shop. And most importantly, they prefer their ideas shared with their audiences. So imagine a platform with personalized shopping content and a machine-learned curation driven by photos, videos, and social sharing. It’s the most powerful marketplace for modern and traditional brands alike.
Verishop founders Imran and Cait Khan believe social commerce is the future. On November 9, the Snapchat and Amazon veteran duo announced the launch of Verishop’s social platform. Content-driven commerce sales is not a fresh strategy; 2PM has covered linear commerce at length. Verishop’s approach is unique, however. The industry’s typical strategy tends to begin with an extensive period of audience development. As consumers spend more time engaged, monetization follows by way of advertising, commerce, and partnerships. Verishop took an alternative, more difficult approach.
Based on what we’ve seen from others who have tried to combine social and shopping, we thought we needed to nail an amazing commerce experience first, before layering on the social elements.
Verishop is one in a hopeful generation of third-party marketplaces. This new cohort includes competitors like Italic and Verticale. Despite the next generation’s current momentum, the most powerful marketplace isn’t one of them. Audience is the weighted advantage in social commerce, which makes the most powerful eCommerce marketplace Instagram.
The Revenge of Zuckerberg
With nearly 24 million Instagram followers, internet personality and YouTube creator James Charles isn’t a fan of Instagram’s new direction. In a recent response to Facebook’s Head of Instagram Adam Mosseri, Charles wrote:
This update may be your worst one yet. Yes, there has been an explosion in both online shopping and short form content. That is because the respective platforms – Amazon and TikTok – are staying in their lanes and growing with their communities.
Instagram is literally doing the exact opposite. You guys are so focused on competing and ripping off features from other popular apps that you have completely lost focus of your app’s intent in the first place – sharing photos! You have replaced the two most important buttons in the app, upload and notifications.
Instagram today is, in fact, a far cry from the platform that once was. Notifications and uploads are now secondary to short-form content and the shopping tab. The focus has shifted from creativity to capitalism. In Sarah Frier’s “No Filter”, she explains the push and pull between Instagram founder Kevin Systrom and his company’s acquirer, Facebook’s Mark Zuckerberg. While Systrom remained on post-acquisition to manage the appeal of the mobile application, Facebook executives held a growth-at-all-costs mentality.
Listen to our interview with Sarah Frier here.
In the book, Frier covers the evolution of the platform’s business strategy and the second-order effect on its creators. Some of these changes were not driven by good business sense, according to her New York Times best seller. Zuckerberg began to view Instagram as a competitor within its own ranks. Instagram grew in popularity and Zuckerberg’s anxiety rose with it. But just two years after Systrom’s 2018 departure and with nearly 1 billion users, the latest iteration of Instagram is the truest reflection of what Facebook believed that Instagram should be.
Here’s a look at the evolution:
James Charles’ frustration was short-sighted. Facebook’s path from photography application to commerce engine was due partly because of the creative class that Charles belongs. Built with WooCommerce, the YouTube creator’s “Sisters” apparel sells well into the eight-figures in merchandise, annually. Another recent example is Jeffree Star and Shane Dawson’s success in November 2019. The two YouTube creators sold $54 million in cosmetics in under 60 seconds. I explained:
As audience interest shifts from corporate media to individual entities, podcasts and Youtube followings and email lists will grow. With these growing audiences, the probability is that flash sales will continue crashing sites. And those service providers will build fool proof systems to prevent the next mishap. [2PM 1]
With Shopify’s integration and a new technology from Facebook in the form of “Facebook Pay,” Adam Mosseri’s team is presenting a vision of the future where retailers can spend less building their own shopping experiences and devote more to building within Instagram’s ecosystem. With approval, Facebook pay allows users to transact without being forwarded to Shopify or anywhere else. Other payment processors will soon follow.
The balance of creative and commerce
In this way, Instagram, and not Amazon, is building the closest analog to China’s Tmall with a collection of modern and luxury goods that appeal to younger and more affluent audiences. Facebook is building the anti-Amazon. Mosseri and team have developed a resource that serves as a marketing engine and audience development tool. They’ve taken Verishop’s product pipeline and presented it all at once to an existing audience. That audience development is the weighted advantage when building self-contained eCommerce engines. The difference is that while Verishop holds inventory, Instagram does not.
Creativity is, of course, important. And with platforms like Instagram, YouTube, Triller, TikTok, and Snapchat constantly changing to fit its business needs, there will come a time when artists like James Charles or the droves of talented TikTok creatives will reach their zenith. And platform leverage may shift away from the technology companies that are benefiting from their work.
Eventually, the best of them will build their own platforms.
Last week, I sat with the chief executive of Barstool Sports and we discussed linear commerce at length. Erika Nardini is an industry executive with an unparalleled foresight into the push and pull of digital creativity and monetization. For Barstool Sports and its 9.1 million followers, Instagram is a major acquisition tool and media asset. Nardini suggested that the most astute of the creator class will collect their content on their own self-contained media platforms, free from algorithm changes and undesired user experience developments. Her concern stemmed from a persisting worry that the edges of content suitability typically generated the most traction on these digital media platforms. And she’s observed that over the years, more of the content has been censored or minimized. I suggested that Barstool build its own curation platform for viral content as a hedge against Instagram’s shifting rules and strategies.
If Instagram is truly to become a commerce engine, creativity is its life blood. The creative class that Kevin Systrom once-envisioned has become one of the most powerful commerce engines in the world. Unlike platforms like Verishop, the audience and the creativity is already there. But the downside is that while commerce demand can be influenced by a number of inputs, content-driven commerce is its most fickle. “Instashop” is the first platform at scale that can be commerce-driven solely by the power of audience.
Instagram’s linear commerce strategy is the most efficient path to competing with the likes of Amazon, Alibaba, and the new crop of markets like Verishop. But to maintain that path, platforms like Instagram will have to keep its best content creators happy. Mosseri may have to redefine his platform’s rules and engineering strategies to do so. The irony of Instagram leaning so heavily into eCommerce is that it will be more reliant on good content and big personalities than ever before. Charles may have the power to sway design decisions after all.
By Web Smith | Editor: Hilary Milnes | Art: Alex Remy | About 2PM