Tech

Leila Abboud is a Bloomberg Gadfly columnist covering technology. She previously worked for Reuters and the Wall Street Journal.

Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

As fashion month draws to a close, with Paris the last stop, there has been only one talking point: which designers follow Burberry and move to a "see now, buy now" model.

The British luxury brand is preparing to make its products available straight after a catwalk show instead of the usual six-month wait. But even if other big fashion houses were to follow suit, one piece of the puzzle is still missing -- their favorite social network isn't fully on board. If the "clickable catwalk" is to work, it needs a clickable Instagram.

The Facebook-owned photo-sharing app is beloved by fashionistas because of its glossy magazine-style photos that can be filtered to perfection. And brands from Dior (8.9 million followers) to Marc Jacobs (4.2 million) as well as retailers such as H&M (12.8 million) and Top Shop (6.3 million) are salivating at the chance to turn those followers into sales.

Instafashion
Retail and luxury brands have won armies of Instagram followers
Source: Instagram

But Instagram, which has 400 million active users compared to 1.6 billion for parent company Facebook, doesn't have an easy, immediate way to shop. Asos is among the retailers that have found workarounds such as sticking links in the top of their profiles, but that's hardly "buy now." An Instagram direct-purchase button is the holy grail. 

The limitations are probably down to the fact that Facebook, which bought Instagram in 2012 for $1 billion, is early in its monetization strategy for the platform. There's a genuine worry that inundating Instagram with marketing could wreck its carefully honed designer vibe. But change is coming.

Facebook's formidable ad-sales machine launched a series of new Instagram formats in September -- dubbed "Learn More"; "Install Now"; and "Shop Now" -- which in the industry jargon are known as direct-response ads, meaning they prompt users to do something, such as download an app, instead of just project a brand message. The "Shop Now" ads drive users to retailers' websites, using a so-called in-app browser so technically they remain in Instagram-land.

As a result, analysts have started predicting Instagram ads will turn into a big revenue generator for Facebook, a sharp contrast to its minimal contribution in years past. EMarketer sees $600 million in ad sales from Instagram this year, reaching $2.8 billion or 10 percent of overall group ad sales by 2017. Barclays' analyst Paul Vogel is even more bullish, predicting Instagram revenue of $1.3 billion this year alone.

Instapotential
Photo-sharing app Instagram's share of Facebook's advertising revenue may soar
Source: eMarketer, 2015 estimate and forecasts for 2016-2017

Advertising agencies that work closely with Facebook and advise fashion brands say Instagram could well launch some sort of direct-purchase function by the end of this year. A spokeswoman for Instagram declined to comment on its plans.

Instagram does need to get on with it. Other social networks look to be further ahead. Twitter has had a buy button since September and people can store their credit card information on the site to make purchases faster and easier. The venture-capital backed Pinterest, which allows users to collect photos in boards to organize home decoration or cooking projects, is the furthest ahead on the e-commerce front. Its so-called "buyable pins" show up in search results for anything from a dining room table to a sweater.

Meanwhile, in a world that is notoriously fickle, the fashion pack is always looking to the next bright shiny thing. A number of retailers, including Burberry and Gucci, used Snapchat's video sharing to promote their brands during fashion month. With a user base of 100 million, Snapchat is arguably even less mature in terms of e-commerce, but has been courting advertisers with the argument that the app is the best way to reach 13 to 34 year olds.

So get moving, Instagram, otherwise you might find that fashion is clicking on another platform's catwalk.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the authors of this story:
Leila Abboud in Paris at labboud@bloomberg.net
Andrea Felsted in London at afelsted@bloomberg.net

To contact the editor responsible for this story:
Jennifer Ryan at jryan13@bloomberg.net