In June of 2015, we–like everyone else–wrote a post about latest entrant in social commerce– “Pinterest” and its announcement of Buyable Pins program. In case you’re in need of a refresher, the news was…
More than 2 million Buyable Pins will be available to iPad and iPhone users in the U.S. in a few weeks and to Android and desktop users later on.
Price filters will allow customers to sort through pins based on their price range and customers will be able to pick colors, sizes, and more within the Pinterest app. Purchases made through the Buyable Pins will be processed through Stripe, Braintree and ApplePay. Instead of taking a portion of the revenue, Pinterest is charging companies for the implementation of Buyable Pins.
We also conjectured that Pinterest may have an advantage over other social networks that have tried to implement “buy” buttons, since its users are in a buying mindset when using the heavily visual platform. Finally, though, we speculated that retailers might lose out in a specific way: the fact that more sales traffic will occur on Pinterest means that they could miss out on traffic to their sites through other referral software.
So, six months later, what’s changed, and what hasn’t?
Pinterest started offering the new type of pins exclusively with Shopify, but is now working with four additional commerce platforms–Demandware, IBM, Bigcommerce, and Magento–to implement Buyable Pins. Digital Trends reports that this was due to a “positive response.”
We’ve already mentioned that Pinterest is a visual medium, which is often more conducive to online shopping. The Street expands on that concept by noting that Pinterest’s potential for monetizing non-intrusive advertising is exceptional. The company charges advertisers based on re-pins, click-throughs, and a few other metrics, and it doesn’t have the advanced targeting functionalities of Google and Facebook yet.
Several big-name brands–like Macy’s, Kate Spade, Cole Haan, Nordstrom, and Ethan Allen–were early adopters.
TechCrunch reports that as of December 2015, Pinterest has enabled users to monitor price drops for products they’ve pinned. In other words, when users save a Buyable Pin to their board, they’ll get an email and a notification if and when the price is lowered. Through these two forms of alerts, users can click through right to the pin in question and buy the product immediately. This is a useful “sticky” tactic for the site–it encourages users to return again and again.
Pinterest has launched even more functionalities related to its Buyable Pins. One of particular interest is the “action button” for recipes, which allows users who are reading a recipe to immediately purchase the necessary ingredients to make it. However, as of now, this is a hypothetical capability.
Pinterest’s Product Marketing Manager Sarah Shere commented that her company “tried to build a shopping experience that worked for that customer experience — discovering a product, waiting for the right moment, and then completing the purchase in a seamless way.”
One major issue, though, is related to the fundamental nature of Buyable Pins. That is, they can never extend to all the content on Pinterest since they must be confined to what retailers can guarantee is in stock. Furthermore, they’ve only launched in the US so far, so many major markets are missing out. Finally, Pinterest doesn’t take a cut of the sales and instead relies on an advertising revenue-style model. While this may be viable, companies like Amazon have made their fortunes by taking a small percentage of retailers’ profits.
How’s it all panning out for Pinterest? As of December 2015, there were 60 million shoppable pins on the site. One case study reports that 84% of buyable pin orders come from new customers.
In light of all of this, Pinterest grew revenue 500% from 2014 to 2015, and are expecting $2.8 billion in annual revenue by 2018. They’re currently valued at about $11 billion and are poised to do a high-profile IPO this year. A 2015 Shopify study found that 96% of Pinterest users go to the site to research a product before buying.
Despite these positive signs, the reviews are mixed. Retail Dive cites a 2015 Channel Advisor survey in which 64% of US online retailers named Facebook as their leading source of social media sales, while only 7% picked Pinterest.