Now it’s Twitter’s turn to try commerce.
The social network, which boasts 271 million average monthly users, on Monday unveiled a “buy” button that allows users to buy directly from a tweet. The move is an attempt by the social network to generate another revenue stream and satisfy the ever-hungry Wall Street for ongoing growth. And the Street seemed to like the concept: On Monday, Twitter’s shares closed at $52 on the New York Stock Exchange, a 2.6 percent increase.
The tool, built in partnership with platforms such as Fancy, Gumroad, Music Today and Stripe (for order fulfillment, presentation and transactions), is being unveiled with some big names. Burberry is the sole brand from the luxury fashion world participating in the initial launch, with Eminem, Demi Lovato, Pharrell Williams, Soundgarden, Wiz Khalifa, Home Depot and nonprofits like GLAAD, Red and 9/11 Day also part of a select test group.
“When you’re talking about a consumer’s payment info and commerce in general, we’re going to wade very cautiously into those waters — [so] when larger brands jump in they can feel great about the experience,” Nathan Hubbard, head of commerce at Twitter, told WWD, citing Burberry as a brand that is innovative in its use of Twitter. “We’re testing with them, and I think we’ll break some ground with them and set some examples of other ways brands can follow.”
Twitter views commerce as a stand-alone revenue stream. The company thinks e-commerce can parallel its existing advertising business — which has grown to be significant. Revenue for the second quarter jumped 124 percent to $312 million — with advertising revenues comprising about 90 percent of the total top line.
But the social network still trails far behind the behemoth of Facebook, which reported second-quarter revenues of $2.91 billion, mainly driven by advertising. And Facebook has a long head start on Twitter when it comes to commerce, albeit with mixed success.
Facebook commerce, or F-commerce, was a digital buzzword three years ago — but the idea of shopping on the social medium failed to resonate with users on a large scale. Industry analysts have been dubious about the success of Facebook commerce; even though it’s become massive in terms of advertising and has generated more revenues from commerce, retail is not its primary business. During the second quarter, Facebook’s ad revenues reached $2.68 billion, or about 92 percent of the company’s total revenue.
Perhaps it’s because Facebook has more of a personal feel — a user is more likely to use it to connect and communicate with friends and acquaintances — versus logging on to shop, such as with Amazon, or even searching for somewhere to buy something, as with Google. Facebook was created as a place to keep in touch with those around you, and brand presence came later.
Twitter might be different, though, due to the real-time nature and intent with which users are consuming the platform. Although there is a personal element, Twitter is widely used to follow one’s favorite brands, celebrities and organizations of interest, including news outlets.
“Twitter seems to be an ideal platform onto which to introduce a purchasing capability,” said Adam Pressman, a partner in the Strategic IT practice at global management consulting firm AT Kearney. “The key will be to build on the trusted and self-curated approach they’ve enjoyed to date, so that they are providing only the most timely and relevant ads to their customers. Similarly to how Twitter users can manage messaging across devices around their own tweets or from others they are following, one would expect that users will be able to manage what ads they are shown, as well as when.
“If Twitter is able to do that, one can see them to be able to convert followers into buyers while still maintaining the desired experience,” he added. “It may even provide a reason for users to join Twitter or use it more, if highly curated products are added to the offering alongside the already opted-for content.”
He compared potential success with Twitter’s Buy Now to flash-sale sites. The learning curve with flash sales —like using data to see what types of deals work, the urgency of the deal offered and the ability to make it compelling — are the same characteristics that will determine conversion on Twitter.
As for how the new tool works, the first time users click the “buy” button, they will be prompted to enter payment and shipping information. Twitter will store this securely, Hubbard said, adding that after the initial purchase, users will never be asked to enter their information again. Going forward, when consumers go to “buy” an item from a tweet, all they have to do is confirm the purchase and that product is on the way — and this all occurs without leaving the confines of Twitter.
A spokesman for Burberry called the collaboration the “latest step in Burberry’s digital evolution” and an “interesting new way in which our customers can shop with us.” The brand, which has been active on the platform for five years and has 3.12 million followers, was also the first to host an in-tweet livestream, for its spring 2012 show.
Immediately following Burberry Prorsum’s spring fashion show in London on Sept. 15, the brand will offer Twitter users the chance to purchase exclusive nail polish colors that appeared on the runway. A boxed set of three Blue Tones will retail for $63. Later in the testing phase, the brand’s My Burberry fragrance will be available for purchase.
Twitter’s Buy Now option will be the only other destination — besides Burberry’s Runway Made to Order via burberry.com — that will sell the runway nail color.
For Hubbard, the impetus of this test and the reason for starting small is to allow the microblogging platform to scale up to other brands. He declined to reveal what a “small” percentage of users allowed to test the button might be — but he did say he expects to “ramp up really quickly” to 100 percent of U.S. users in a matter of weeks to a month.
Monday’s launch was the culmination of smaller commerce initiatives that have taken place over the past year, from an American Express “Sync With Twitter” program, to Starbucks’ “Tweet a Coffee” campaign to #AmazonCart, which allowed users to add items to their Amazon cards with a tweet.
“[This] is the next step in that evolution; it is a way for our users to get closer to the things that they love and a way for sellers of all types to take the conversations that are already happening between brands, retailers and consumers and turn them into transactional relationships,” Hubbard said.
Twitter is largely starting this initiative with music artists, Hubbard explained, noting that this talent has a long history of maintaining direct-to-consumer relationships — and they have massive social followings. But it’s just one of several verticals that sees a high conversation volume. Sports, retail and fashion are other areas that Twitter expects will perform well when it comes to user response to potential buying opportunities.
“Will people push ‘buy’ to purchase a vehicle? No. Will they buy something directly from a brand that has an exclusive component — anything associated with the moments that happen on Twitter or anything that has a real-time component to it? [Yes,]” Hubbard said.
Ideally, the opportunity to buy will occur in tandem to a consumer’s desire to purchase, Hubbard explained, hopefully increasing the likelihood of a transaction. He called Twitter’s real-time nature a “powerful acceleration” to conversation in the moment.