Home decor style guides on Pinterest. Photo: Pinterest
Business

Pinterest, Instagram, Facebook and the challenges on what it takes to be an e-commerce platform

E-commerce already makes up about 16% of the total interactions on Instagram. But competition is heating up as players like Pinterest launches new shoppable features

Earlier this month, social network Pinterest, well known for the inspirational approach with décor ideas and fashion tips, launched a shop tab in its lens camera results, a feature that shows matching in-stock products similar to the photo taken or uploaded. “Over the years we’ve greatly improved the results that appear when you snap a photo with Lens camera search, to match related suggestions and products to buy. There are 3x as many visual searches using the Pinterest camera than last year,” said the company.

Since early 2018, when Instagram launched its shoppable posts, a series of new and enhanced features leveraging sales conversion started to be integrated by social media platforms. And what was once pure inspiration got replaced by actual shopping experiences.

“With e-commerce already making up almost 16% of the total interactions on Instagram, we predict that 2020 will be the year that social commerce takes off,” stated Yuval Ben-Itzhak, CEO at the social media marketing platform Socialbakers, in the company’s Instagram and Facebook Trends Report. “We will see more and more customers making purchases directly from social media platforms as opposed to heading to an e-commerce app or to an online store after discovering a product on social media.”

Pinterest seems to agree: its shop tab feature is actually being leveraged in more than a single way. In April, the company announced new methods for shopping directly in its app – whether by pins, on boards, from search, or through new browsable recommendations for home decor. “97% of top searches on Pinterest are unbranded, meaning people come to Pinterest to shop for generic terms and not specific brands, leveling the playing field for businesses of all sizes to be discovered,” said the company.

“As we continue to make improvements to the shopping experience on Pinterest, we’ve increased the number of shoppable Product Pins by 2.5x since last year, while driving a total increase in traffic to retailers by 2.3x. And, the number of Pinners engaging with shopping on Pinterest has increased 44% year over year,” Pinterest stated in a press release. Media: Pinterest.

While these shopping interactions are available only in the US for now, Pinterest forecasts that this will soon reach Latin America, according to information sent by the company to LABS. “What is already available throughout Latin America, including Mexico, Brazil, Argentina or Colombia, is the possibility for brands to upload their catalogs on Pinterest, thus creating what we call Product Pins, and consequently offering a shopping experience for the user,” Pinterest stated.

“Users see the platform as a space where they can find new ideas, get inspired and create community, that is why we have decided not only to develop new content, but we have also sought alliances with different partners in order to that connection becomes purchases,” Mariana Sensini, head of growth at Pinterest Latin America, told Mexican newspaper Expansión. Liverpool, Palacio de Hierro, and Gaia Design are some of the Mexican retailers partnering up with Pinterest to bring shoppable experiences within the platform. In Brazil, Camicado, Mobly, and Sephora are also betting on the strategy.

“We don’t know exactly why, but Latin American consumers are adapting more rapidly to these functionalities than Americans,” Adrián Bravo, Regional Lead for Latin America at Socialbakers told LABS. “Latin Americans, especially Mexicans, spend much more time on digital channels than some other regions. Worldwide, we lead video content consumption in digital.” According to Bravo, the adoption time for new features such as Facebook Shops in Latin America is exponentially faster than in markets like Europe or the US – something driven by this social media-oriented behavior found in the region.

READ ALSO: Instagram expands its Shopping feature to more businesses

Facebook Shops, as mentioned by Bravo, is another sign on how shopping features are gaining ground amid social media platforms. Launched in May, Shops is a free feature that allows businesses to set up a single online store, with some level of customization, for customers to access on both Facebook and Instagram. At the launch’s occasion, Mark Zuckerberg said that Facebook has been working with partners like Shopify and BigCommerce “so that small business can easily integrate into a strong, open ecosystem of tools to help them manage their customer journey end-to-end, and it’s up to the business to decide what level of integration they want.”

Photo: Facebook/Courtesy.

For the user [Facebook and Instagram Shops] are great because now you can create really good content that is aimed at the upper funnel. That means you are explaining the value that a consumer will get out of a product, then you will go smoothly and understand what are the product’s features, and next, you can go up to the lower funnel and make the purchase within the app. You don’t need to go anywhere else.

Adrián Bravo, Regional Lead for Latin America at Socialbakers

Canadian e-commerce platform Shopify was also targeted by Pinterest. In May, the social network launched an app to enable Shopify merchants a quick way to upload catalogs to the social media platform, turning products into shoppable Product Pins.

“As we make Pinterest more shoppable, Shopify is the perfect partner for bringing access to catalogs, Product Pins, and shopping ads to merchants so they can get in front of the millions of Pinners looking for unique products that match their taste,” said Jeremy King, SVP of Technology at Pinterest. The novelty is available for Shopify merchants in the US and Canada, and according to Pinterest, it will reach countries where their ads are available in the coming months, including Australia, France, Germany, Italy, Spain, and the UK.

“With the new Pinterest app on Shopify, in just a few clicks, retailers can take the products on their virtual store shelves to the recommendations Pinners see as they shop. Merchants are adapting to new realities and looking ahead to the future of retail, which is why we’re focused on making both our ads and organic features available and impactful to businesses of all sizes.” Jeremy King, SVP of Technology at Pinterest. Image: Pinterest

Blurred lines

As social media interactions evolve and embrace the shopping journey to the point that users no longer need to leave the app to buy, Socialbakers’ exec agrees that lines of what essentially makes a social network and an e-commerce platform are getting mixed. 

“All social media channels realized that they are now getting more revenue out of their e-commerce clients. Naturally, they are investing more to convert the platform in an e-commerce tool, not just a marketing channel tool,” Bravo explains. “For the user, it gives you the idea that you still on Facebook or on Instagram doing purchases, but actually they are connecting through the back of your website, doing all the checkout process, the payment process, within Facebook or Instagram, but actually on your e-commerce platform.”

Instagram post on mass retailer Target’s account. Image: Instagram

These built-in shopping experiences are dragging the attention of players in the likes of US retail giant Target, that, in May, started selling products directly on Instagram. “One of the main reasons why Facebook is putting more attention on e-commerce capabilities, it’s because of clients such as Target.” For Bravo, platforms like Shops are easily manageable when it comes to small and medium businesses that deal with a reduced number of articles.

“But it’s completely different when it’s something like Target. You have users with different geographical regions, different interests, consumer habits, actually looking for those millions of products,” he ponders. “I don’t foresee in the very short term that someone like Target could manage to have millions of products in a platform like Facebook Shops.”

READ ALSO: Retail will move towards full integration of ‘anywhere-channel’ in post-pandemic

From the moment you spot a nice product by scrolling through Instagram to the very point you go to the checkout, a seamless shopping experience within the platform depends on matters like inventory. “The inventory’s challenge is in the information accuracy of which exact item is this, of which color, size, pattern, quantity, and so on,” says Ana Paula Ribeiro Tozzi, CEO and Head of Retail at AGR Consultancy. For the expert, inventory and alternative payment methods such as payment links, since users not always are willing to provide credit or debit card data when online shopping, are key matters for retailers to thrive on social commerce.

“E-commerce website has been downgrading. It is no longer the most important piece of the business to actually have an e-commerce platform,” says Bravo. “For many industries, it will be more important in the long term to have Facebook Shops up and running and just have the e-commerce website as a backing platform than as a real storefront activity.”