Buying
Rewind one year and the idea of shopping directly from Google, Pinterest, Twitter, or Facebook seems very strange. Fast forward to today and these companies are hoping it becomes one of the hottest Internet trends over the next year.
It’s not hard to imagine why this concept would appeal to all four of these massive digital platforms, who hope to cash in on consumers who are increasing buying online. Each of these social networks have announced plans to test or release some form of “Buy Button,” but will there efforts pay off?
Twitter and Facebook have been testing publicly for quite a while with little or no signs of progress. While large numbers of Pinners do buy based on their browsing activities, they are used to heading first to a third party website or even out into the real world to purchase from a local brick and mortar business. How do Pinterest (and Google, for that matter) convince people to buy in app?
There are a few challenges facing these social media giants Including integrating inventory and payments systems from retailers having little or no experience selling outside of their own storefronts. Building trust and the logistics of buying from their site initially can be a roadblock. And what of the companies who are meant to be using the Buy button? What if they don’t want to sell directly from a social app where they lose the opportunity to up-sell, cross-sell, and build a strong customer relationship?
Advertising

People tend to view social networks as “free.” While the only cost associated with using them for individuals is measured in lost time, they are businesses and they exist to make money. Each of the social platforms has the same commodity; the user. They make money through advertisements and they are always looking for ways to ramp up their game, especially on mobile.
While mobile commerce has grown more than three times faster on mobile than on desktop sites, the conversion rate hasn’t. Meaning that while people are looking at merchandise more, they aren’t buying it, or at least not from their mobile devices. The big social platforms seem to think that making it easier to purchase through their app (buy button!) will increase sales, which in turn will increase the demand for advertising through their site.
Aha!

Here’s the rub: purchase information will be stored from the first transaction, either by the vendor, the platform, or by a third party. That data will eliminate the need for the mobile user to retype their credit card and shipping details for any subsequent transactions. Making it easy to shop is the key to repeat business and offering retailers a way to compete with Amazon and other big e-commerce sites, which draw a lot of business away from single site sellers.
HOW PINTEREST PUTS PEOPLE IN STORES
Social media not only drives people to make online purchases; it also drives an equal volume of in-store sales. In the July/August 2013 issue of the Harvard Business Review , we put Pinterest under the microscope to show how it puts people in stores. Data from the US, Canada and the UK demonstrates that for all the worry about how “showrooming” benefits online retailers at the expense of bricks-and-mortar, there is an even bigger phenomenon of “reverse showrooming”: customers who browse online, and buy offline. The Harvard study paints a picture of Pinterest’s impact on in-store shopping that at times stands in sharp contrast to the overall impact of social media on onlline and in-store shopping combined.
Inventory

What’s the big deal?
Huge hurdles exist because selling outside their own website or store causes issues for small stores and for major retailers. If it’s the first time they’ve attempted to sell products through a third party site, they need to sync their product catalog, order management, and payment systems with whichever site they are selling though, in this case Pinterest. Otherwise, they won’t be able to receive, process, and ship the order in a timely fashion.
Platforms also need a way to make sure that Buy buttons only appear on items that are in stock or it loses appeal to retailers and brands, as well as to consumers. Pinterest has plans to work with partners to get updated inventory information, using pings, every 15 minutes and when anyone clicks on that particular Buy button. How well this will work on a mass scale has yet to be proven.
Obstacles

Retailers don’t like single sales and there are legitimate reasons why it isn’t in their best interest. Online retailers have a sales funnel and use it to market additional products or add on sales, especially when the purchase is low cost or has related products that would be an easy sale. Plus, order fulfillment and shipping costs affect product margins more on single item orders than on multi-item orders. Retailers lose the opportunity to show shoppers things like: other shoppers who bought your item also bought, recommended purchases based on your purchases, or simply showing their own ads for upcoming sales or promotions based on a customers buying habits, season, or an impending holiday.
Early success of Pinterest’s initiative will be determined in part on how well Pinterest targets Buy button placements, especially since the majority of Pins won’t represent items for sale. Present Buy buttons to the right people at the right time and the new business could succeed. Push them too aggressively or in contexts that don’t make sense to Pinners and the Pinterest community may reject them entirely. A small subset of bloggers who used affiliate links to monetize their Pinterest efforts are already losing thousand of dollars a month and are upset at being pushed out.
Twitter and Facebook got a head start on implementing Buy buttons, but neither platform has gained a noticeable lead is usage. Twitter has found that some tweets with Buy buttons have led to the sale of hundreds of specific products and, in a few cases, even thousands. However, Buy buttons are still not showing up on the social network frequently and most casual users are completely unaware of their existence.
Facebook is still in testing mode 11 months after first announcing the buy feature, which is typical of the social behemoth. Unlike Pinterest, which is integrating directly with sellers, Facebook is working with Shopify (which helps small businesses set up online shops or stores) to get small businesses selling directly on Facebook. The company isn’t yet working with any big-name brands or retailers and seems to be taking a methodical approach unlike its big competitors even while pursuing similar tactics.
What do you think? Are you jumping at the chance to buy immediately when you find your new favorite sweater on Pinterest or are you more likely to Pin It and shop later?