The death of traditional retail has long been predicted but 20 years later — e-commerce only accounts for about 9% of U.S. retail. Make no mistake about it, traditional retail is dying — as Hemingway said — gradually, then suddenly. Retail has been far more resilient than most industries facing tech disruption. Why?

If you use disruption theory’s ‘jobs-to-be-done’ framework: retail stores are hired by customers for many reasons. The jobs to be done are: browsing through products, spending time with friends, trying on or testing products, checkout, and instant gratification. If you boil it down — each of those items correspond to an app’s product area.

Browsing through products … discovery/search
Spending time with friends … social
Trying on or testing items … returns
Instant gratification … delivery/logistics
Checkout … payments

If e-commerce is going to replace traditional retail, the user experience of shopping in apps needs to improve. Currently, e-commerce is better at discovery but traditional retail is still better at social. The difference between the new and old systems has to be dramatic too — it can’t be slightly better, it needs to be dramatically better.

Shopping malls are the lowest hanging fruit of the retail experience. They are dying quicklyaccording to Credit Suisse — by 2022 nearly 25% of U.S. malls will close. But there isn’t an obvious replacement for malls yet. Malls bundle retail stores very much like your cable subscription does for TV. Bundling helps in two areas: discovery and social. Apple understood the value of malls for discovery and opened a store in hundreds of U.S. malls to break obscurity in the 00’s. The social experience is obvious: people hang out with friends in shopping malls even if they don’t plan to make a purchase that day.

Enter Instagram

People spend an absurd amount of time on Instagram. As @gnarlycourts says: money follows attention. Instagram users follow their friends, favorite brands, and celebrities. Put another way: everyone who shapes your shopping habits.

Instagram, a Facebook subsidiary, also knows a lot about you. They know who your friends are, who you’ve recently hung out with, what you’re looking at on the internet, and much more. Facebook has built the most sophisticated systems to understand how to serve you relevant ads. They even know how to serve you content to play with your emotions. This sophisticated targeting has many downsides — but their tracking software’s potential in surfacing relevant products for you to buy on Instagram is tremendous.

Instagram already highlights which of your friends like content you both follow. They will specifically call out “nooklyn and 300 users like this” underneath each photo. For video content — they replace likes with views. For shopping Instagram should replace likes/views with which of your friends recently bought items from that account. That will instantly lend credibility to a brand. Out of the social services, Instagram is the only one who can do this. Pinterest can try — but they don’t know enough about you and most of your friends don’t use Pinterest.

Instagram can’t do it alone. That is why their partnership with Shopify is huge. Shopify powers thousands of brands to sell stuff without the hassle of creating their own store. That sounds a lot like a modern Macy’s. Shopify will be an anchor for Instagram’s shopping experience. However, if Instagram will succeed, they will need other companies like eBay and Etsy to sign up as well.

E-Commerce only accounts for roughly 9% of US retail. Considering U.S. retail is $1.256 trillion dollar market, the upside of e-commerce is massive. Instagram can take a huge chunk of that by providing a social shopping experience that they are uniquely positioned to do. Instagram has all the pieces to succeed, they just need more retail partners and embrace their new shopping mall.