Pay by hashtag: Twitter wants to get inside your wallet
Twitter is reportedly working on an e-commerce project powered by Stripe, a company that acts behind the scenes to process payments for sharing-economy startups such as Lyft, Postmates, and Sidecar. What that social-shopping initiative will look like is still unclear, but this isn’t the first time Twitter or other social networks have set their sights on retail.
Stripe is also one of the partners in an e-commerce test that Facebook started late last year. Facebook users can store their credit card information with the network, and it then employs that information to fill in payment fields automatically when users enter their Facebook login on partnering retailers’ apps. For instance, you can use your Facebook login to sign in to men’s retail site JackThreads, and Facebook will populate the empty fields with your information when you go to make a purchase.
In this respect, Facebook regards itself as a shortcut, a way to log in to third-party sites or buy stuff quickly without setting up a slew of individual accounts. Twitter’s e-commerce project could take a similar form, or it might look altogether different, but the microblogging site has tested easy-buying methods before.
Cashtags and gifts
Last February, Twitter teamed up with American Express to launch an experiment in which AmEx cardholders can sync their credit cards with their Twitter accounts and then take advantage of special discounts or buy physical goods by using an AmEx-approved hashtag.
The AmEx Offers platform is still going strong nearly a year after its debut. American Express hasn’t disclosed exact user numbers, but a spokesperson says that cardholder registration in the program is increasing. The company also claims that its social offers attract users who are ten years younger than the average AmEx customer and spend about 30 percent more.
The most successful cashtags are typically tied to events—a Black Friday Amazon offer and associated hashtag became a trending topic the day they went live, with American Express cardholders clamoring to snag the deal. Major brands such as Best Buy, J. Crew, McDonald’s, and Whole Foods have since signed on with American Express to offer deals on Twitter.
Twitter also partnered with Starbucks last fall for the company’s “tweet a coffee” promotion. Like American Express, Starbucks required its cardholders to link up their cards with their Twitter accounts. Instead of hashtags, however, Starbucks required users to include a specific phrase—“@tweetacoffee to @insertnamehere”—to trigger the sending of a $5 gift card to the recipient of their choice. Keyhole, a company that tracks social conversations, estimated that the promotion generated $180,000 in sales for Starbucks.
Starbucks expanded the program to Canada this month, so clearly “tweet a coffee” is staying put. The company has long offered gift cards on Facebook Gifts, too. Gifts took a hit last summer when Facebook determined that physical goods weren’t selling all that well and decided to focus on digital gift cards, which amounted to 80 percent of all gifts on the platform.
Twitter and Facebook’s flirtations with retail prove that gift cards are steady business and that timely deals can tempt us, but there’s still a barrier to using social networks as shopping sites.
Pinterest’s more successful method
The e-commerce efforts of Twitter and Facebook get all the attention, but it’s hard to judge the success of social-commerce stunts without hard numbers to back them up. Meanwhile, Pinterest gets little attention for its ability to turn inspiring images into sales even though it’s cleaning up as far as social shopping goes.
Largely text-driven social networks such as Facebook and Twitter, no matter how much they emphasize images, find it difficult to organically turn brand messages into sales because those messages stick out like sore thumbs. Pinterest drives purchases more naturally: You can conceivably click through any image you like from any board on the site to reach a product link. (And that is why Pinterest’s money-making potential more logically lies with referral commissions instead of the Twitter-like ad model it’s currently exploring. But I digress.)
Some numbers back up the online bulletin board’s influence: Pinterest captures the bulk of product sharing on social networks with 44 percent of shares, while Facebook and Twitter lag behind at 37 percent and 12 percent, respectively. One pin translates to 78 cents in sales, according to holiday research from Piquora.
Companies are realizing that a pinned image has way more appeal than a hashtag deal, but people use the two types of items in vastly different ways. Pins have a longer shelf life than hashtags, which are all about immediacy and serve to promote limited-time offers or flash sales. A pin continues to push as much traffic to a site three and a half months after it’s posted as it does when initially pinned, according to Piquora.
The retail challenge
Making a purchase directly from a product page feels safer than using a hashtag as shorthand for “buy now.” If Twitter wants people to buy stuff from a tweet, it has to convince users that shopping from a social network is truly secure—and maybe that’s where Stripe’s support will come into play.
There’s also the problem of placement: If you’re using Twitter or Facebook, you’re not there because you’re looking to buy things. You want to join conversations or see updates and photos from friends.
Social-conversion platform Chirpify is helping companies turn Twitter hashtags into actions in a way that doesn’t annoy users. A recent campaign involving Lady Gaga let Twitter users hashtag their tweets to get a package with the pop star’s latest album. In Chirpify’s promotions, users aren’t storing their financial information with Twitter—Chirpify’s team sees the promotional hashtag and directs the user to a payment page.
But the companies working with Chirpify are letting the hashtag speak for itself.
“You don’t want to carpet bomb,” Chirpify CEO Kevin Tate told TechHive. “You want to let the conversation be about other things. It lets customers who are interested raise their hand and continue the conversation from there.”
That conversation could begin outside of Twitter. If a brand includes a hashtag in a print ad or TV commercial, for example, Twitter users could enter that hashtag to take advantage of deals on the social network.
“Instead of just watching a commercial with a hashtag, you can use the hashtag to get something,” Tate says.
Twitter, Facebook, Pinterest, and the retailers who want to translate eyeballs into sales are ultimately just throwing things at the wall to see what sticks. Hashtags that trigger actions, gift-card purchasing options, the ability to sync your credit cards to social networks—all of these things are grand experiments conducted in an effort to get inside your wallet.