Adidas has seen a major sales boost from Instagram’s ‘Checkout’ feature.
The sportswear company is one of 20 brands that have been participating in a beta test of the feature since March. ‘Checkout from Instagram’ lets users shop for products, purchase them, and track their shipment directly from the app. Instagram charges participating brands a selling fee, which is primarily to cover refunds and shipping costs. (Details of how much brands pay haven’t been released publicly.)
That fee is apparently well worth it, considering Adidas has seen a 40% jump in first quarter online sales year over year, Digiday reports. (That’s compared to a 24% growth from the third quarter of 2018 to the fourth quarter of 2018.)
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Overall, including online and offline sales, Adidas brought in a total of $6.57 billion in Q1 2019, with a net profit of about $707 million — a 17% increase in net profit from last quarter, per CNBC.
Adidas’ CEO, Kasper Rorsted, revealed these figures in an earnings call last week, and said that the upswing in online sales is largely due to Instagram.
“There was no doubt that Instagram had a positive impact for our online business in the first quarter,” he said. “Product launches and Instagram’s Checkout tool were the two most important things for our online sales business in the first quarter.”
Those product launches Rorsted mentioned were actually part of Adidas’ overall Instagram strategy. Over the course of Q1 2019, Adidas purposefully launched more exclusive items in lines that do well on the platform. Rorsted specifically mentioned Adidas purposefully released more shoes in its Futurecraft athletic line, which the company noticed sells well on Instagram.
Going forward, Adidas’ plan is more of the same: continue pairing up Checkout with a steady string of releases in lines Instagram users love.
“Our growth online is very dependent on which product launches we have within a given quarter,” Rorsted explained. “What we’re focused on is ensuring we have the consistency of launches.”
Like Adidas, other brands participating in Checkout tend to produce items that mesh with Instagram’s overall vibe of beauty, health, and wellness content — Dior, Huda Beauty, Kylie Cosmetics, Nike, Warby Parker, and Zara, to name a few. Those brands haven’t yet spoken publicly about the effect Checkout has had on their online sales.
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For users, there are a few limitations to Checkout. As of right now, only Instagram users in the U.S. can snap up their products, and because Checkout is still in beta, users can only purchase one item at a time.
Instagram hasn’t said if or when the Checkout beta will be expanded to include more brands. It did announce back in March that it plans to roll out more shopping features in the latter half of 2019.
