Why Pinterest is Betting Everything on Social Shopping
When Pinterest released its “buyable pins” feature at the end of June, it was heralded as a significant step forward in the advancement of social media. Instead of merely interacting with others, users are now increasingly able to shop and make buying decisions. Instead of waiting for “buyable pins” to settle in the marketplace, Pinterest is investing even more time and money into the idea of social shopping with three new e-commerce platforms.
As of October 5, Pinterest is adding three new outlets for online purchases: IBM Commerce, Magento, and Bigcommerce. New brands are also being pursued by Pinterest, including Wayfair, Bloomingdale’s, and thousands of storefronts through Shopify. Pinterest hasn’t disclosed its full plans for utilizing and integrating these e-commerce platforms, though it’s reasonable to suspect the company is planning on overhauling or expanding the shopping features of its core mobile platform.
There are several factors that could be responsible for this new investment. First, Pinterest recently released its “buyable pin” growth statistics. Since the feature’s release just a few months ago, use of the function has ballooned to more than 60 million. Merchants are also pleased with the service, noting conversion rates twice as high as those associated with other pins on the platform. These early numbers could be all the data Pinterest needed to know that social shopping is a viable and lucrative commercial opportunity.
Second, Pinterest isn’t the only social media platform in the game, and its competitors are increasing their efforts. For example, YouTube recently announced shopping ads, which will be integrated into the platform, allowing consumers to make direct purchases from retailers. Twitter, which has had its own version of a “buy now” button for some time, is now expanding that purchasing function to be available to any retailer in the United States. Facebook, too, is working on increasing the convenience and availability of its advertised products, so users can complete transactions without ever leaving the app.
The risks of Pinterest’s new strategy seem relatively low. The brand has built much trust and loyalty from its customers in its six years of existence, and because users are already responding positively to buyable pins, it’s reasonable to suspect the strategy can be scaled. However, there is a chance that an overabundance of ads and shopping opportunities could transform the platform into something similar to eBay or Amazon, with the social functions of the app becoming secondary. The transition would be gradual enough to keep most users happy throughout the process, but could alienate the minority who aren’t interested in using the platform to make buying decisions.
The gradual trend in social media has leaned toward keeping users engaged for as long as possible. For example, Facebook has unveiled tons of new features—from in-post search engines to help users find links to in-app publishing opportunities for content producers to universal messaging—to prevent users from ever leaving the app. With Facebook drawing most of its revenue from advertising (and soon to be social shopping), more people in-app for a longer period of time means more money to be made. Pinterest likely sees a similar road to profitability.
While Pinterest’s plans remain to be seen or fully realized, it’s a safe bet that this is only the beginning. Social apps have begun competing against each other for more time in-app, more convenient purchasing opportunities, and greater user trust. Expect to see more features, bells, and whistles rolling out in multiple social apps, all geared toward helping users shop while engaging with others.