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Originally introduced in as a "Shop Now" button for ads, the feature has evolved significantly:

The button on Instagram is a core feature of Instagram Shopping , designed to turn the platform from a discovery engine into a direct digital storefront. It primarily appears in three locations: within a merchant's profile shop , on shoppable posts (tagged images/videos), and within sponsored advertisements . Evolution and Functionality

Instagram Adds ‘Shop Now’ Button for In-App Impulse Buying - WSJ

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