E-Commerce Is Head Over Heels for Pinterest, and for Good Reason
No one knows for sure what social commerce will be in the future, but it’s starting to look a lot like Pinterest.
Based on a report shared exclusively with AllThingsD, Pinterest is on pace to become the most significant driver of social traffic to e-commerce sites by the end of the year — besting more mature networks like Facebook or Twitter.
“If you aren’t doing it, you are falling behind, and you need to do it as quickly as possible,” said Kurt Heinemann, the chief marketing officer for Monetate, referring to Pinterest. “It is absolutely justified.”
The report was compiled by Monetate, which helps its clients — including Best Buy, Urban Outfitters, Aeropostale, The Sports Authority, OfficeMax and others — maximize their marketing strategies.
While the report comes from a single source, Monetate can get a good sense of overall trends because of its large client base. In particular, it looked at what social networks were driving the most traffic and purchases to online retailers, and the results make Pinterest look like a superstar.
If you aren’t already familiar with Pinterest, it is one of Silicon Valley’s hottest start-ups — Kara Swisher once described it as “Oprah on steroids” because it allows people to highlight their favorite things by creating and sharing virtual collages. Others can than “re-pin” them, and great stuff rises in the rankings. Last month, Pinterest raised $100 million in a round led by Rakuten, which runs the largest e-commerce site in Japan. The financing now values the social bookmarking site at $1.5 billion.
In recent months, many online retailers have started to integrate Pinterest into each one of their product pages, so that it is easy for a consumer to easily “pin” a product to their collage. Most notably, Amazon has added Pinterest to every product, and many others have, too, including a host of e-commerce start-ups, including Gemvara, OpenSky, JackThreads and more.
Heinemann said all of the attention and hype around the company is entirely justified, especially for retailers.
Consider this: In the first quarter of 2011, Facebook made up 88 percent of the social traffic to retailers, and Pinterest made up 1 percent. A year later, Facebook made up only 60 percent, and Pinterest made up 26 percent.
At the same time, overall social referring traffic grew by 77 percent.
“What will be incredible to watch is the fourth quarter this year,” Heinemann said. “In Q4, e-commerce explodes, and if Pinterest keeps on pace it’s going to knock on Facebook’s door.”
More evidence that Pinterest is skyrocketing:
- In Q2, referral traffic from Pinterest is up 2,535 percent year over year.
- In Q2, referral traffic from Facebook is up 2.7 percent year over year.
- Conversion rates from Pinterest are 0.43 percent in Q2, up from 0.29 percent in Q1 2012.
- Conversion rates for Facebook are 0.61 percent in Q2, up from 0.49 percent in Q1 2012.
(Note: The second quarter has not ended yet, but the results are not expected to change radically.)
When checking out Pinterest, these trends are pretty easy to see in action.
A man’s blue button-up shirt and plaid tie had been pinned 19 times, and leads to a JackThreads page. Likewise, a tan “dressy sandal,” which had been pinned 68 times, leads to ShoeDazzle.com. While Pinterest is often considered a site for independent or do-it-yourself projects, obviously a lot of the products come from mainstream e-commerce sites.
Heinemann said Pinterest is “creating massive awareness,” and it is becoming a significant traffic generator for Web sites, while at the same time, it’s not stealing traffic from any other driver. Other leading traffic generators are email campaigns and search engines.
Those other kinds of campaigns are supported by advertising, whereas Pinterest is more “consumer-based.” Important to note is that the advertising-based methods still continue to perform better. While Pinterest generates a sale 0.43 percent of the time, email converts at a rate of 3.91 percent, and Google at a rate of 2.44 percent.
But given that Pinterest traffic is free — or nearly free, since in some cases there are affiliate fees — that’s still a good deal.
“The true cost of doing that is nominal to nothing, and you have inbound traffic at little to no cost. It’s fantastic,” Heinemann said.