Last month, reports emerged that Pinterest is readying a “buy” button, which is expected to launch in the coming months. Pinterest has yet to confirm the button officially, but the industry seems pretty sold on it. It’s widely expected to be on the way.
Do you see the buy button as a game changer? Share your thoughts in the comments.
A Pinterest buy button makes sense, as its social peers Facebook and Twitter are already trying out their own. It makes even more sense when you consider that it’s already well established that Pinterest users like to shop, and that ecommerce businesses are already utilizing the platform with Product Pins.
Shawn Budde, CEO of payments company 2Checkout, thinks a Pinterest buy button will actually change the future of ecommerce.
“I think the challenge for anybody who is trying to sell stuff online is how to get paid,” he tells WebProNews. “Throughout all of history, getting paid is what creates friction in commerce. The Pinterest buy button is a better way of monetizing traffic because it means you can always get paid more. Banner ads require so much work for the merchants, between doing the ad and sale, and they don’t even work that well. With pay-per-click, you at least buy a visit on your website because Pinterest gets a cut of every sale, rather than asking a merchant to bet that a pageview will lead to sale.”
“With the buy button, Pinterest is moving closer to marketplaces like Etsy or eBay that make it easier for smaller merchants to transact, and thus make it easier for more people to participate in ecommerce opportunities,” he adds. “They help level the playing field with bigger merchants who have access to tools that eliminate friction, such as the best fraud systems, and payment methodologies. The buy button will help small, independent merchants turn interest in their products into revenue.”
Budde believes buyers will shop in the moment, regardless of where the seller is located, and that this could potentially push ecommerce to a level of globalization that has yet to exist. He says problems with currencies across borders might be the thing holding us back. This connects to his point about friction.
“Any time a transaction crosses borders, it gets more complex,” he says. “The whole premise of the EU was essentially to eliminate those borders and to make transactions simple. It is an ongoing complexity that is absolutely overwhelming for a small merchant to handle on their own. This is a huge part of what we do at 2Checkout — we make it pretty simple for folks to handle transactions across borders, and particularly to do that while remaining safe, because moving money across borders has high risk from a fraud standpoint. Making it easier to transact across borders has a huge number of benefits for merchants, and especially those in developing countries who have a relatively small local market. 2checkout enables them to access a broader market.”
As Pinterest shifts from from a virtual pin board to a virtual mall, there are likely to be come security concerns from some users.
“If they are collecting account info and putting it through a payment network, people entering their card information are putting faith that Pinterest won’t lose it,” says Budde. “For a consumer, the good thing is you don’t expose yourself to that much risk. Pinterest will bear that risk, and after them the issuing bank will bear that risk. But the risk is not really any different than what any other ecommerce company could have.”
While it’s obviously early to say, as the feature hasn’t even been confirmed yet, Budde thinks Pinterest’s buy button will have a greater impact on ecommerce than Facebook’s or Twitter’s.
“The reason why Google’s business model is so great and Twitter’s is only so-so is because people search for things to buy on Google,” he says. “A lot of people on Pinterest pin outfits they want or home remodeling ideas. It is a hub of commercial activity. How much money will people spend as a result of stuff they are seeing on Pinterest? Probably a lot. Pinterest doesn’t need to get a big slice of that flow for it to be pretty amazing. On Twitter, you see brands spamming people or people checking in and telling each other what they are doing. You don’t often see people on Twitter saying “check out this table that looks amazing,” but that happens on Pinterest all the time.”
“People are in a consuming mood when they go to Pinterest, whereas they are in a chatting mood when they go on Twitter or Facebook,” he adds. “For those companies, it is a two-step sale — you have to get people interested and then get them to close. When you go on Pinterest, you are already in the mood to do business, the question is just how to make it easier to close.”
Asked what types of businesses he expects to benefit the most from a Pinterest buy button, Budde says, “There does seem to be a lot of conversation going on around clothing and home decorating. You don’t see a lot of technical or B2B stuff, mostly things that are visual. Hard to find or limited edition items will do well because discovery is such an important component. Pinterest will become a place to find something from small merchants that you wouldn’t be able to find on Bloomingdales. com. I think there will be a similar feel to Etsy. Everything changes as it gets more commercial.”
Some wonder how much Etsy itself may change after going public. It filed for an IPO last week.
While Pinterest remains tight-lipped about a buy button launch, it is doing a lot to make its ads more effective, which should make the buy button all the more effective if and when it finally does get here.
Do you think a Pinterest buy button will have as big an effect on ecommerce as Budde believes? Tell us what you think.