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Why Shopify Could Be the Biggest Winner With the Latest Update to Instagram Stories

September 17, 2018, 7:30 PM UTC

Instagram is cutting out another middle man and making it possible to shop directly from one of its most popular features: Instagram Stories.

Since it went into test mode in June, one of the primary stakeholders in the new venture is Shopify (SHOP), an e-commerce platform and software provider for online retailers, point-of-sale systems, and social media brands. Selling via Instagram Stories will be made available to all of Shopify’s merchants, including the techie shoe brand Allbirds as well as Kylie Cosmetics, a beauty business valued at more than $900 million since launching just three years ago by one of Instagram’s most-followed users, Kylie Jenner.

Merchants will be able to enable shopping within Stories from the Shopify dashboard they use to run their stores.

Instagram, which is owned by Facebook (FB), has been steadily building not only the powers of Instagram Stories (which many critics argue was a copycat of Snapchat) but also its advertising and retail revenue streams. Shopify notes it launched Instagram’s sales channel—in which approved merchants can tag products in posts, linking users to purchase and checkout from the account’s online store without ever leaving the Instagram app—in March 2017. Instagram Stories also offers verified users and merchants the opportunity to share links to their online stores via links.

Shopping via Instagram Stories will operate in a similar fashion to shopping through Instagram posts. Merchants can now add shopping stickers to their Instagram Stories, which displays content for up 24 hours and then vanishes. (Although users—for personal and business purposes—can set up Stories from their archives to be displayed on their profile pages indefinitely.)

According to Shopify, approximately 80% of users on Instagram follow a business account, so expanding shopping beyond just Instagram posts to Stories exponentially increases the sales opportunity for online retailers—large and small. And Instagram cites that more than 90 million users tap to reveal tags in shopping posts on the app each month.

“We see many entrepreneurs on our platform succeed on Instagram, as it provides a great space to cultivate and develop a brand,” says Satish Kanwar, vice president of product at Shopify. “The future of retail is wherever customers are, and we want to empower brands to reach those customers in the best way possible.”

The photo-sharing app, which retains more than one billion monthly active users, announced on Monday that it will also soon debut a dedicated shopping channel in the Explore tab, which suggests content based on a user’s interests and likes based on the Instagram algorithm.

While it begins testing starting today, an official debut date for the Explore tab shopping channel hasn’t been revealed yet except that it is scheduled to roll out in the coming weeks.