Pinterest: A holiday gold mine for retailers
Nordstrom is using Pinterest to decide which merchandise to feature in stores, with a special red tag affixed to shoes and handbags that are popular on the social network. Both in-store and online, Pinterest has come of age as a major force in holiday retail, helping consumers find products and retailers identify trends and market to the right consumers.
A new study of Pinterest users by market research firm Lab42 finds that 54 percent spend more time on the site during the holidays and 94 percent say it has changed the way they make their holiday preparations. And people are turning to Pinterest to share ideas—42 percent have a holiday-themed board.
That Pinning activity is translating into revenue for brands. Piquora, which helps retailers run Pinterest campaigns, says revenue driven from the site to retailers' sites doubled over the Thanksgiving holiday weekend. In a recent study Piquora did of 1,000 brands finds an average pin generates 78 cents in sales and drives two visits to company websites.
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Bottom line: Pinterest activity is proving incredibly valuable in driving purchases—which means a gold mine for retailers if they can figure out how to leverage that conversation. And it's a potential gold mine for Pinterest if the start-up can figure out how to effectively charge retailers.
Pinterest still has zero revenue, but it's making progress on its model to cash in on all that activity.
It's called "Promoted Pins"—allowing brands to push products they want customers to be sure to see.
"Something we hear from our partners is, 'When our pins are on Pinterest, we see a lot of value, so how do we get more distribution for those pins?' " said Steve Patrizi, the company's head of partner marketing.
Pinterest has been experimenting with allowing companies to promote their pins but hasn't charged for it just yet.
Target has seen a 70 percent increase in traffic from Pinterest to Target.com since rolling out Rich Pins earlier this year, according to Target Chief Marketing Officer Jeff Jones.
"This year we'll rely most heavily on two social platforms: Pinterest and Facebook," he said. "In both places we've found we can really build commerce on the social graph."
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Patrizi said Pinterest is changing how consumers shop—a counterpart to Google, where people know exactly what they're looking for.
"People don't know what they want, they have some notion they need something, but they don't exactly know what it is, they don't know how to search for it," Patrizi says. "When you go to Pinterest it's a discovery experience, it's like walking into a mall. You don't know exactly what you want but then you see something and you know you want it."
With such valuable tools, we expect Pinterest to start charging for them next year.
—By CNBC's Julia Boorstin. Follow her on Twitter:
Correction: This story has been updated to reflect that Target saw a 70 percent increase in traffic in the first six weeks after implementing Rich Pins