Retailers Are Hoping for a Pinterest Holiday
This holiday shopping season will mark a turning point for Pinterest. The social scrapbooking platform valued at $1.5 billion isn't making money itself yet. But it's been helping retailers connect with customers since it launched a year and a half ago, and now it's actively trying to help brands cash in. And this all-important shopping season companies are increasingly using it to drive online sales, according to a new study by eMarketer.
Just last week Pinterest launched "Pinterest for Business." The new tools and commercial terms of service are designed to help businesses drive users to follow their brand pages and to pin and share their products. Pinterest isn't charging for these tools, but this lays the groundwork for the social sharing platform to eventually charge for analytics.
Brands recognize the power of Pinterest: about a third of all brands have an active presence on the service, according to an Econsultancy and Adobe study. Pinterest has 25 million monthly active users according to ComScore. That's just one sixth of Facebook's 150 million users and two thirds Twitter's 37 million users.
(Read More: Pinterest Opens the Business Floodgates … Finally)
But Pinterest's demographic is particularly valuable: its users are two thirds women, they're looking for shopping inspiration, they're eager to share, and they have money to spend. The average retail order from shoppers coming from Pinterest is $169 dollars, compared to the $95 people spend when they come from Facebook, and the $71 they spend when they come from Twitter, according to a study by RichRelevance.
And all the information people share on Pinterest about what products they like, is helpful for targeting customers with product suggestions. Pinterest users generally get far more granular about what products they like than say Facebook or Twitter users.
Amazon-owned Zappos just started testing a service called Pinpointing. In a box of Zappos' home page, users can input a Pinterest user name for custom product recommendations based on their Pinterest 'pinning' and 'liking' activity. The director of Zappos labs Will Young says Pinterest gives Zappos the right kind of knowledge to target shopping recommendations whether it's for users themselves, or for gifts. "If your wife is a big pinterest user you can look for her in pinpointing and we'll make Zappos recommendations for your wife," Young explains. So far, Zappos says Pinpointing is "absolutely driving sales."
Pinterest is also looking to tap into demand for help with holiday shopping. It recently launched a service called "Secret Boards," for users to share gift wish lists with a handful of family or friends.
The big question now: when will Pinterest sell ads? Zappos' Young said he'd love to try them. Zappos already gets thousands of visitors from Pinterest, and says he'd expect ads to drive even more traffic. And Pinterest users are exactly the kind of shopper retailers like Zappos love, because they spread the word about their purchases. Shoppers are 13 times more likely to share Zappos purchases on Pinterest than on Twitter, so Zappos hopes its embrace of the sharing service will drive sales.
-By CNBC's Julia Boorstin
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