Heading into the winter holidays, Pinterest was already one of the most popular social media destinations on the Internet. Now, with growing buzz about the way it is helping retailers such as Target boost sales, Pinterest may finally deliver on its original promise of transforming the online commerce experience.
The Pinterest deal that has people talking on Twitter is a new online shopping experience called the Target Awesome Shop. This is basically a modified Pinterest page that takes two inputs — items that have the highest number of recent pins on Pinterest and the items that have the top reviews on Target.com — and mashes them together into a set of “awesome” Target gift recommendations. When you click on a pin for more information, you’re redirected to the main Target.com page, where you can add the item to your shopping cart.
The numbers are certainly intriguing. In early December, Pinterest rolled out some pretty impressive stats, like the fact that 42 percent of Pinterest users have created some type of holiday-themed board to highlight gift items or holiday décor items. And all of that pinning is finally resulting in some tangible financial results that are sure to delight analysts. Over the Thanksgiving holiday, Pinterest doubled the revenue sent to retailers on Black Friday. And on Cyber Monday, Pinterest revenue more than tripled. That’s huge.
Not that the Target Awesome Shop experience is for everyone. If you’ve ever checked out Pinterest, you’ve probably realized that there are some things that are pinned a lot – like fashion and home décor – and others that are not. Target, with a brand based on style and design, was a natural fit for the Pinterest aesthetic. Other retailers offering more mundane items may not be able to generate the same lift in sales as Target. As a result, most retailers that have experimented with Pinterest have focused on a relatively narrow basket of goods. Nordstrom, for example, focuses on shoes and handbags, using data from Pinterest to help arrange store displays and to highlight Pinterest-friendly items on its Web site.
Until now, the knock on Pinterest was that people may pin all of those visually attractive items on their personal pin boards, but they’re not necessarily planning to buy them any time in the near future. In the industry jargon, all of those pins are just “aspirational” – a way to indicate the things you’d like to buy, but necessarily the things you plan to buy.
What that ignores, however, is that the real power of Pinterest comes from its ability to change the way people shop online. Pinterest can change not only what we consume, but also how we go about consuming it. As some analysts have pointed out, there’s a huge difference between “search” and “discovery.” In search, you already now what you want, and you just want the best price or the most popular Web site to buy that product. In discovery, you don’t necessarily know what you want, only that you want something unique and beautiful that you have discovered after a trial-and-error period of searching through a bunch of fabulous items. At its core, Pinterest is all about discovery.
No wonder small businesses — not just mega-retailers such as Target – have embraced the inherent democracy of a site like Pinterest. On Pinterest, nobody knows how big your business is, only that you sell “awesome” items. You can think of Pinterest as an “Awesome Shop” for the whole Internet, where the best items are curated and reviewed by users, and eventually added to shopping carts. The newest data says that every pin on Pinterest is worth $0.78 in sales. That may not sound like much, but it’s huge in the world of no-revenue Silicon Valley startups. And, better yet, Pinterest pins have a much better chance of driving future sales than more ephemeral forms of social media content.
As long as Pinterest continues to make it easier to transform pins into sales, the company may have just figured out how to make shopping awesome again. And, in so doing, it may just convince Wall Street investors that it’s worth more than its current $3.8 billion valuation and should be considered as the next big Internet IPO after Twitter.