“Eventually Pinterest will have to make money, but it will have to be from browsers, not buyers, because Pinterest won’t drive significant purchasing.”, says Silicon Valley executive, Julian Green. “For Pinterest to be successful in encouraging buying, they would need to connect the collection of images to the catalogue of products. This is hard to do.” So can Pinterest make money?
Before the internet, we used to browse beautiful things for free by roaming the aisles of shops, or cutting pictures out of old magazines and sticking them to the wall. Now we have Pinterest and a range of social curation sites that enable us to search for and pin gorgeous images to virtual boards, and then share them. Eventually Pinterest will have to make money, but it will have to be from browsers, not buyers, because Pinterest won’t drive significant purchasing.
But hold on, you say. Haven’t we been hearing how Pinterest is the fastest-growing website ever, with over 17 million users visiting every month (Comscore)? Aren’t people “liking” products in their millions and adding them to their “Products I love” boards? Isn’t social commerce the next big thing, and US sites like Fab.com, Birchbox, Rent the Runway, Threadless, Etsy and the like all the rage? Yes, but there is a difference between social curation and social commerce.
There have been bookmarking and clipping sites before – Delicious and Tumblr, for example. But Pinterest is so successful not only because they simplified the pinning experience, but also because users curate collections. By adding pins to named boards you give them structure, and add a layer of taste. Discovering other boards and people with taste you like, is part of the fun. For Pinterest to be successful in encouraging buying, they would need to connect the collection of images to the catalogue of products. This is hard to do. eBay started out with an unstructured collection of product listings, got big, and then had to go back and structure all its data, so that you can choose between a red XL T-shirt and a blue M T-shirt. Pinterest doesn’t have enough data on the images people are pinning, and won’t be able to structure it.
The sites that are successful in social commerce, and will be successful in social curation, are focused on particular areas. When you focus on just one area like shoes, T-shirts, clothes, or craft products, you can merge the catalogue of products and the social curation activity to the point where customers can help choose the products – like at Modcloth. Social curation sites that have had success focusing on one area and developing organised catalogues include Polyvore, Houzz, Yummly, Foodspotting. And some areas are more suitable than others for social commerce. Just as in the Freeman catalogue, some sections are thumbed through more than others, and some are bought from more than others.
If you look at the categories of pins on Pinterest, you see that Home, Fashion and Food are the most popular. These are categories with trends where tastemakers are very important, and where the picture tells much of the story. Consumers want to see what experts and celebrities are choosing to eat, wear and sit on. Products and travel are the least popular categories on Pinterest, and these are categories where consumers tend to rely more on recommendations from friends for commerce, and where a picture is just the start of the information consumers need. Some users have bought specific Etsy craft products from Pinterest, but that early behaviour is being drowned out by the new Pinners:
The balance between curation and commerce is something that I have learned in starting two social curation companies – Houzz and Jetpac. Houzz is for home design inspiration. Homeowners want to see what tastemakers like, and get information that can help them choose designers, architects and products. We started off with a structured catalogue of images from top designers and tagged all the products in the photos. Jetpac is for travel inspiration, where friends’ recommendations are critical, so it is inherently social – you can see where your friends have been, and browse their best travel photos. Those experiences work for those categories. What Pinterest will not be able to do is to turn Lookers into Bookers, as they say in travel.
They will be more successful if they don’t get in the way of what users are enjoying doing already, and just help brands advertise in a way that adds to the experience. A whole group of analytics companies are already vying to provide brands with stats on their Pinterest presence. How long before Unilever gets the chance to ask if you Love it or Hate it, next to TheMarmiteMan’s boards on Pinterest? People won’t buy from Pinterest, but they may look at advertisements.
From The Telegraph
Julian Green is the Founder of Jetpac. He previously founded Houzz and has been starting and running technology businesses in Silicon Valley since 1998, including six years as a senior executive at eBay.