Is Instagram Still a Viable Platform for E-commerce?

Instagram has long been a go-to platform for brands looking to connect visually with customers. For small and mid-sized e-commerce businesses, it offered the perfect blend of free organic reach, shoppable posts, influencer marketing, and a built-in checkout system. But with recent shifts in user behavior, algorithm updates, and rising ad costs, many Atlanta-based sellers are asking the same question: Is Instagram still worth it for e-commerce? 

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Let’s take a closer look at how Instagram’s role in online shopping has evolved, and weather it still makes sense for growing brands. 

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The Rise of Instagram Shopping: A Game Changer for E-Commerce 

Instagram changed the e-commerce game when it launched shoppable posts in 2018. Suddenly, small businesses could turn followers into buyers without needing them to leave the app. The addition of features like Instagram Shops, Product Tags in Reels and Stories, and In-App Checkout made the platform  feel like a virtual storefront. 

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According to a Meta report, 70% of shopping enthusiasts use Instagram for product discovery, and 44% of people use it specifically to shop weekly. This positioned Instagram as a powerful sales channel, especially for fashion, beauty, lifestyle and home goods. 

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In Atlanta, small e-commerce brands began leveraging these tools to drive both awareness and conversions. From handmade jewelry businesses in Grant Park to boutique skincare brands in Decatur, Instagram offered a visually immersive way to reach local and national audiences alike. 

Current Trends: Is Engagement Declining? 

While Instagram was once a goldmine of engagement, recent trends paint a more complicated picture. 

• Overall Engagement Rates: In 2025, Instagram experienced a 16% year-over-year decrease in engagement, with the average engagement rate per post across all industries standing at .43%. 
• Content Performance: 
  
  • Carousels: These posts have emerged as the most engaging content type, averaging a .55% engagement rate per post.
  • Reels: Despite their popularity, Reels have an average engagement rate of .50%, while images trail slightly at .45%.  

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These figures suggest that while Instagram remains a significant platform, the organic reach and engagement that small businesses once relied upon have diminished. 

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Challenges: Algorithm Changes & Ad Costs

Instagram’s evolving algorithm has made it increasingly challenging for businesses to achieve organic visibility. Posts without paid promotion often struggle to reach a substantial portion of followers, compelling many brands to invest in advertising to maintain their presence. 

Advertising Costs: 

• Cost Per Click (CPC): On average, Instagram ads have a CPC ranging from $.70 to $1.00. 
• Cost Per Mile (CPM): The average CPM for Meta platforms (Facebook and Instagram) is approximately $7.75 as of February 2025. 

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For small e-commerce businesses targeting the Atlanta market, these rising costs can strain marketing budgets, making it imperative to optimize ad spend effectively. 

The Role of Influencers in Instagram Sales 

Despite engagement challenges, influencer marketing remains a valuable strategy on Instagram. Collaborating with influencers, particularly those with highly engaged audiences, can enhance brand visibility and credibility. 

Engagement Rates by Influencer Size

• 1K-5K Followers: Average engagement rate of 5.60%. 
• 5K-20K Followers: Average engagement rate of 2.43%. 
• 20k-100K Followers: Average engagement rate of 2.15%. 

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For Atlanta-based businesses, partnering with local micro-influencers can be particularly effective, offering authentic connections with niche audiences and fostering community engagement. 

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Alternatives: Should Businesses Diversity to Other Platforms? 

Instagram is still valuable, but it’s no longer a one-stop shop for e-commerce success. In 2025, smart small businesses are spreading their efforts across multiple platforms, not just for better reach, but also to reduce their dependence on unpredictable algorithm changes and ad costs. 

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Here are four platforms gaining serious traction this year: 

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TikTok: The Viral Sales Engine 

TikTok isn’t just for dance trends anymore. With over 1.5 billion active users globally, TikTok has become a top channel for product discovery, especially among gen Z and younger millennials. 

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In 2025: 

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• 55% of TikTok users say they’ve bought something direct;ly from the app. 
• The newly improved TikTok Shop feature allows in-app checkout with fewer clicks than Instagram. 
• TikTok’s algorithm still rewards creative content over follower count, making it easier for smaller brands to go viral. 

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For Atlanta-based businesses, TikTok also offers localized reach through trends like #AtlantaEats, #ATLStyle, or #GeorgiaMakers, helping brands connect with local audiences while building national visibility. 

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Pinterest: Searchable Inspiration with Purchase Intent

Pinterest may not be as flashy as TikTok, but it remains one of the best platforms for long-term traffic and high purchase intent. 

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In 2025: 

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• 83% of weekly US users say they’ve made a purchase based on content they saw on Pinterest. 
• It functions more like a visual search engine than a social feed, giving products a much longer shelf life. 
• Categories like home goods, fashion, DIY, wellness, and food thrive on Pinterest, especially when paired with SEO-optimized product pins. 

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Pinterest is a great option for Atlanta-based makers and sellers with aesthetic, niche, or seasonal offerings that benefit from visual search. Think handmade home decor, locally sourced skincare, or eco-friendly gift boxes. 

YouTube Shorts

YouTube shorts is YouTube’s answers to Reels and TikTok, and it’s booming. With over 50 billion daily views globally, Shorts allows brands to share fast, engaging videos that lead back to long-form content or a storefront. 

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In 2025: 

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• YouTube added native shopping buttons to Shorts, allowing viewers to click and buy in real time. 
• It integrates seamlessly with Shopify and other platforms, making it ideal for product demos, tutorials, and reviews. 

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Small businesses in Atlanta with strong brand stories or visually engaging products (like fashion, kitchen gadgets, or cosmetics) can use Shorts to quickly grow an audience and drive traffic to their main store. 

Email & SMS: Still the Best-Owned Channels 

While flashy platforms come and go, email and SMS remain a staple in 2025 for one major reason: you own the relationship. 

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• Email ROI is still strong, with an average return of $36 for every $1 spent. 
• SMS open rates hover at around 95%, making it a direct line to your best customers. 
• Tools like Klaviyo, Mailchimp, and Postscript make it easy to segment, automate, and personalize communication. 

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Atlanta-based brands are seeing big wins from collecting emails and phone numbers at pop-up markets, on Shopify sites, or through Instagram lead magnets, then re-engaging customers outside of the noisy social media feed. 

Future Outlook: Can Instagram Shopping Stay Relevant? 

Instagram isn’t dead, it’s just maturing. As it becomes more saturated and algorithmically driven, it’s better suited for brand awareness, storytelling, and influencer partnerships than for consistent direct sales. 

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To stay competitive in 2025, small businesses should:

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• Use Instagram to build trust and visibility 
• Invest in carousel posts, Reels, and Stories 
• Run targeted ad campaigns with clear ROI goals 
• Diversify to other platforms where attention and engagement are rising 
• Focus on owned channels to build long-term customer relationships 

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