The key word in social media is “social” but Twitter is betting they can entice consumers to include “shopping” in the list of activities performed on their site. As of today, Twitter is rolling out their new “Buy” button, although their test group is limited to mega-account celebrities like Eminem, Soundgarten, Brad Paisley and Home Depot. What is going on?
Twitter has high hopes for their new Buy button. Initially, the button will be rolled out to a small percentage of American users via apps on Android and iOS. The company has previously dipped their toe in the commerce pond via joint ventures with companies like Starbucks, Google and American Express and stress that those initial forays have helped them tweak any commerce weak spots. Although Twitter partnered with Stripe for their initial sales transactions, it is going into this week’s “test” with at least three other companies — Fancy, MusicToday and GumRoad. All of these partners have a proven track record of “direct-to-fan” platform-building success.
The advantages being touted with the Buy button are many. First of all, the entire transaction is completed inside Twitter. By the way, this means that the microblogging site will need to store all payment info within user accounts so “there is no need to re-enter payment data.” (The company swears the data will be encrypted and safe but potentially, the hackers are singing with joy.) Secondly, Buy button tweets can be promoted within the application, which will allow those tweets to be seen as an ad across user’s feeds. It is murky right now whether Twitter plans to take a cut of the Buy button transactions. However, since it costs money to promote a tweet, they will be profiting regardless. Finally, the company says consumers will gain access to promotions and offers that are available only on Twitter.
The desire to enter the world of commerce has been evident in many business decisions made since before the company went public last year. In August, shortly before Twitter’s IPO, the company hired Nathan Hubbard, a former C-level executive at Ticketmaster, as the “Head of Commerce.” At the time of his arrival, Hubbard shared cryptic comments to Billboard magazine to the tune of “the music industry should be excited.” The artist-to-fan interaction on Twitter is immense so the potential to get music and merchandise into the hands of fans via the Buy button is significant. Hubbard publicly stated the company’s intention to add merchants as time goes on, but said, “We’re starting small.”
Hubbard said the company is testing many methods of monetizing their site and stressed that this current venture “will not cost the participating artists anything.” He states that “Twitter’s goal is to enhance the customer experience, not detract from it.” He believes that the site self-regulates in the sense that “if someone does not like how much an artist or business is selling, they will unfollow.” Twitter plans to focus initially on physical merchandise, rather than music downloads.
One thing is certain: since Twitter launched their ad model back in 2011, their revenue has skyrocketed. The company’s revenue last quarter of $312 million was a 124 percent increase over the same quarter from the previous year. Their stock price has increased at least 30 percent so far this year, based on earnings.
The news of the new feature was announced Monday on the Twitter blog, as well as in public statements to various media outlets. This week’s launch appears to be after the initial beta testing since Buy button tweets were spotted back in June. Additionally, Twitter bought CardSpring last month, a start-up company specializing in payment infrastructure. Twitter is banking that there will be impulse purchases galore.
Although some brands like Burberry and Home Depot will be getting the Buy button, Twitter is focusing on artists and celebrities for the current test in order to cement their reputation as “the only platform that brings artists together with the fans who love them.” Twitter said they will continue to release the Buy button to more companies over time. Also released today was the YouTube video below. The clip ends with the buzz-building statement: “Watch for great products from your favorite artists, brands and charities coming soon.”
See also Guardian Liberty Voice
By Jenny Hansen