Using digital technology to enable impulse shopping

As social media utilization has grown, so too have grown means to monetize it. is a platform designed to do just that, interfacing with social media app Instagram to deliver purchase information for items featured in blog posts to consumers. is growing in today’s environment, but does it have the potential to sustain beyond its short-term boom?

Social media usage is increasingly prevalent.

The majority of the world uses social media, and this number is continuing to grow. As of January 2016, there were 2.1 billion people on social media worldwide, which is approximately 70% of Internet users and over 30% of the world’s population [1].

In terms of frequency of use, Instagram is the second most used social media platform after Facebook, with 400 million active users spending an average of 21 minutes per day on the app. Instagram has experienced higher growth than Facebook in recent years, with 106% user growth observed for adults from 2012 to 2015. Instagram is used especially frequently among millennials, with 90% of its user base under the age of 35 [1].

Exhibit A: Instagram Usage [1]


As social media grows, inbound marketing becomes a more relevant way to reach consumers.

As detailed in the HubSpot case, traditional outbound marketing, such as direct mail, is becoming less effective for many businesses [2]. Instead, inbound marketing tactics like search engine optimization and features on social media posts are more frequently driving consumers to make purchases. By creating content that adds value for suppliers’ target consumers, inbound marketing enables much more focused outreach with leads costing five to seven times less than leads generated through outbound marketing [2].

Instagram is a platform frequently used by consumer and retail brands for inbound marketing. Some brands have partnered with celebrity endorsers to gain features, but as a PR spokesperson for handbag brand Botkier noted, “We see higher conversions off those [digital style bloggers] than we do with celebrity placement that we might have paid money for” [3]. These so-called “digital influencers” are becoming increasingly important to brands as studies have shown that “marketing-inspired word-of-mouth generates more than twice the sales of paid advertising, and these customers have a 37% higher retention rate” [4].

So how do style bloggers make money?

Style bloggers take several approaches to generate income, from earning fees for sponsored content in posts they create themselves to official marketing campaigns with content created by product manufacturers. Some influencers have shifted towards actually selling products by collaborating with manufacturers on collections, offering services, or establishing online stores [3]. One of the most common methods, however, is through affiliate links.

Where does come in? is the primary vehicle for affiliate links on Instagram posts. When readers click on affiliate web links included in posts, a cookie is dropped on their computer that tracks purchases on the linked site. This enables bloggers to earn a commission for any purchases made by their readers on retailers’ sites [5]. Instagram does not allow users to include external links in posts, so retail start-up rewardStyle introduced in 2014 to circumvent this restriction [6]. When users “like” an Instagram post, they receive an email with affiliate links for the post’s purchase details, allowing influencers and rewardStyle to earn commission-based revenue from Instagram-influenced sales.

Exhibit B: Sample post [7]


How are they doing? has enjoyed rapid growth in its three years of existence. Within its first year, it generated $10 million in revenue and 75 million emails [6]. Now, it generates $100 million in sales with seven million emails per month. Over 1,000 pieces of content are published daily for 1.9 million users, 75% of whom are 18 to 34 years old [7]. It has partnered with almost every major retailer (e.g., Nordstrom, Top Shop, Neiman Marcus, etc) with commission rates averaging 13% but sometimes exceeding 20% [6]. In terms of how this translates to influencers themselves, RewardStyle expects its top bloggers to earn over $50,000/month in the fourth quarter holiday season [5].

Where can go from here?’s current growth can be credited to its value proposition as the first affiliate links program available for the most popular platform for online blogs, but it needs to continue to innovate in order to avoid becoming irrelevant when Instagram’s popularity eventually fades. One way to achieve this is by continuing to stay ahead of the trends for inbound marketing and online blogging channels as social media trends shift. Another method is to expand partnerships beyond traditional retailers, as has already begun to do by partnering with Starwood Hotels [8]. Finally, it has the opportunity to leverage its massive dataset on consumer purchasing behavior to grow beyond its current offering, which it is starting to do by sharing this data with Google to support its new “Shop the Look” page [9].

Exhibit C: on Google’s “Shop the Look” [9]

lkti-3 has an attractive value proposition for the current market, but it remains to be seen whether or not it will be able to adapt and have a longer-lasting presence as the market develops.


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[1] Aki Libo-on, “The Continued Growth of Social Media v 3.0,” Search Engine Journal, February 9, 2016, [], accessed November 2016.

[2] Jill Avery, Naseem Dahod, and Thomas Steenburgh, “HubSpot: Inbound Marketing and Web 2.0,” HBS No. 9-509-049 (Boston: Harvard Business School Publishing: 2011),, accessed November 2016.

[3] Marianna Hewitt, “Ask a Blogger: Exactly How Do Fashion Bloggers Make Money?,” Harper’s Bazaar, August 18, 2015, [], accessed November 2016.

[4] Kyle Wong, “The Explosive Growth of Influencer Marketing and What It Means for You,” Forbes, September 10, 2014, [], accessed November 2016.

[5] Hayley Phelan, “How Personal Style Bloggers Are Raking In Millions,” Fashionista, August 20, 2013, [], accessed November 2016.

[6] Catherine Adcock, “How rewardStyle is Disrupting the Fashion and Blogging Worlds,” Success, April 17, 2015, [], accessed November 2016.

[7] RewardStyle,, accessed November 2016.

[8] Alex Samuely, “Starwood Hotels Transforms Social Influencers into Travel Agents,” Luxury Daily, April 15, 2016, [], accessed November 2016.

[9] Rachel Arthur, “Google Is Making Street Style Fashions Shoppable in New Partnership,” Forbes, September 8, 2016, [], accessed November 2016.


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Student comments on Using digital technology to enable impulse shopping

  1. I will admit, your $50k per month statistic has me wondering if I should drop out of school and re-route to fashion blogging… As an avid LTKI user (much to the dismay of my savings account), I had never really considered how dependent it is on the sustainability and future success of Instagram – which is obviously completely out of its control. I wonder if, given its popularity, it could continue to grow and prosper on its own potentially through its own mobile application, instead of relying so heavily on one social media platform. If its current consumers could follow these fashion bloggers in another way (i.e. not via their Instagram profiles), LTKI could eliminate this dependency risk.

    I think the bigger risk for LTKI may be losing market share or transactions to other dedicated fashion bloggers and retailers, especially those that link to other social media platforms as well (Twitter, Pinterest, etc.). I also wonder if they ever begin to lose influencers to companies like ShopSense, which pays commissions based on clicks instead of purchases (as mentioned in the article below), as I’m sure that is more appealing to a decent portion of the blogger population.

    I totally agree with you that they simply need to find a way to stay relevant – whether that is diversifying to other social media platforms or finding a way to be sustainable and profitable on their own. Thanks for the post!

  2. Such an interesting article about how online is catching up to normal retailing. You would think that impulse buying at the cash register of a gas-station or a 7/11 is something that wouldn’t be able to be replicated. But if you actually think about it, the potential for impulse purchases online is so much larger than in traditional retail. The amount of times that I have got lost on and have ended up with a shopping cart filled with a bunch of things that I wasn’t planning on purchasing at the beginning of my experience is a very high number! As far as bloggers are concerned, we worked quite a bit with bloggers and influencers at my last company and the power that they wield is shockingly large! Our traffic and revenue numbers from a well placed blog endorsement were staggering.

  3. Thanks for the post Ellen! I completely agree with you that is enjoying tremendous success at the moment by virtue of it being the first mover. However, I have reservations about the sustainability and growth potential of the lifestyle / fashion blogger market and consequently’s ability to maintain long-term relevance. Given the almost indistinguishable value propositions of these Instagram influencers and the near-saturation of the market, how much more time does have before consumers start looking elsewhere for shopping inspiration?

  4. (LTKI for short henceforth) has clearly managed to solve a pain-point for Instagram influencers (and followers) but I, like the other commenters, worry about its long-term sustainability given its over-dependence on Instagram. To start, LTKI was created as a workaround for Instagram’s restriction on posting external links in captions. From a technical perspective, enabling links in posts is an extremely simple feature that Instagram developers can implement in days, if not hours. In the past year or so, Facebook has been ramping up on developing an ad platform for Instagram, and I imagine that it’s only a matter of time before they offer an elegant way for influencers to share affiliate links on their posts.

  5. This is a great article! It is actually very interesting, because I follow some blog influencers and I always see them reference, though I am embarrassed to say I never figured out if you liked it they would send you an e-mail. I wonder if I am alone in that, or if maybe they have not captured a lot of customers because they are unaware of the technology!

    Regardless, I am shocked that Facebook has seen their success and has not decided to take on this market directly, especially since you can buy products advertised on Facebook. Do you know why Instagram has been slow to allow external links so they can benefit from the commission and traffic they are clearly driving? It will be interesting to see what happens if Instagram does do this. I wonder if can leverage their existing relationship with retailers and offer a lower commission or free access to the data it has accumulated to make themselves stick around.

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