Twitter is entering e-commerce by encouraging users to make purchases on the messaging platform in a new tactic to win over advertisers.
The home of the 140-character message is introducing a "buy now" button and working with Stripe, the payments start-up, so users can pay by tweet without repeatedly tapping in their card details on a mobile phone. It follows Facebook's introduction of a "buy" button earlier this summer.
The San Francisco-based company is starting with a trial group of brands, musicians and charities that stretch from Burberry, the British luxury retailer, to rapper Eminem. As well as Stripe, partners include Fancy, the New York-based social commerce site that counts Twitter co-founder Jack Dorsey as a board member and investor, and merchandise site Musictoday.
Nathan Hubbard, head of commerce at Twitter who joined the company from Ticketmaster, said it had experimented for more than a year on projects with Amazon, Starbucks and American Express to work out how commerce could work on the social media platform. In the trials, Twitter users were able to send friends a voucher for a free coffee by tweeting or use a hashtag to add products to their Amazon cart.
“What we see today are conversational relationships that already exist between brands, artists and charities and our users with conversations happening every single second, frequently in service of a transaction,” he said. “Now, where appropriate, we’re making that conversation transactional.”
Brands will be able to sell directly themselves and perhaps, in the future, ask selected “influencers” in different markets to sell for them, he said.
Twitter has not yet decided how to charge advertisers for its commercial service but it is experimenting with a tiered pricing system like that for its promoted tweets or affiliate partnerships.
The company will roll the “buy now” button out slowly, starting with some US users before expanding internationally.
Mr Hubbard stressed that users would not be broadcasting what they had purchased to the other 270 million tweeters. “I don’t want the world to see my grocery shopping list,” he said.
The platform has tried to woo advertisers – who still spend the vast majority of their digital budgets on Google and Facebook – by promoting itself as the place to interact with consumers in real-time during events such as the Olympics and the Academy Awards. Revenue at Twitter rose 124 per cent year-on-year to $312 million in the third quarter.
The company has looked to Asian apps such as Line in Japan and WeChat in China for lessons on how to get users to pay for services and integrate purchases on to a messaging platform, as it looks for ways to make money other than advertising. “We look at what a lot of the Asian messaging apps are doing and see interesting opportunities in those markets,” he said.
The company could eventually compete with PayPal by extending Twitter commerce to other apps using MoPub, the mobile advertising exchange it bought last year, which sells adverts that reach over a billion devices.
The payments data Twitter collects could also enable it to tie anonymous Twitter handles with people’s real names, a move that could be popular with marketers eager for as much information as possible for targeting adverts. The company said that this was not its intention and emphasised it was working with Stripe to ensure transactions on the platform are secure and payments data were kept private.
– Copyright The Financial Times Limited 2014
