The importance of Pinterest as a traffic buider for e-commerce sites is discussed here.
A few things that jump out about the nature of Pinterest as a social commerce site are:
Curation- Social shopping/social commerce sites like Pinterest act as social custodians for fashion. In the same way, blogshop owners also act as fashion custodians as they assemble stocks for sale that is based on their personal tastes and expertise in the field. It refers to their role in SELECTING a collection that is aligned with customer tastes. So blogshop owners replace retail buyers, eg the big fashion retailers like MNG. Unlike commodified/predictable goods like books and music/CDs, fashion is a subjective which allows curators like BS a social curation role. So social commerce sites like Pinterest and BS are replacing traditional retail as curators, according to this article.
Browsing and shopping- Browsing online = window shopping which combines with purchasing to form SHOPPING. Browsing is a social activity, and thus the social shopping aspects of it are highlighted, eg discovery, sharing, recommending, etc.
Click-out or purchase in- this is the dilemma facing social commerce, just as we see it happening with Facebook stores.
From: http://techcrunch.com/2012/06/16/social-commerce-pinterest-and-the-future-of-fashion-retail/
Social Commerce, Pinterest And The Future Of Fashion Retail
Death of brick-and-mortar retail
Andrew Chen recently recommended a video to me, which inspired this post. It’s a keynote by Ron Johnson, the CEO of JC Penney and the man behind Apple’s retail revolution. In the video, Johnson spoke about the history of the department store and why JC Penney has fallen behind.
It wasn’t very long ago that stores like JC Penney, Nordstrom, and Gap were the pinnacles of fashion retail. These retailers provided better products at unbeatable prices. Retail buyers acted as personal curators for customers and the in-store experience was exceptional.
Then came e-commerce. Predictable products like books, CDs, and electronics drove the first wave of e-commerce for e-tailers like Amazon. But fashion lagged behind. Consumers want a tactile, in-person experience when it comes to garments. They need to touch and try it on. Even as e-tailers offered lower prices, consumers preferred to shop in stores.
That all began to change when Zappos came along with free shipping and returns; customers are encouraged to order multiple sizes and colors, try on the items in the comfort of our homes and return what we don’t want. For free. Coupled with better product visualizations (large images, multi-angle views – see Warby Parker and MyHabit), consumers are increasingly turning to the web for their fashion needs.
‘Apparel and accessories’ is projected to be the leading category in e-commerce in the US over the next 5 years.
But soon, online retailers will also become less relevant
The bar for e-commerce is rising every day: great visuals and free shipping are fast becoming commoditized. If product, price and service are the same, consumers will grow indifferent towards the seller.
Retailers still drive marketing, supply chain and distribution for designers and brands, but how long before brands figure this out themselves? Social curation and discovery tools like Pinterest and Fancy are leveling the playing field for retail marketing; Amazon is disrupting supply chain and fulfillment (more on this next).
So why are we still shopping at a handful of our so-called “favorite stores”? Because the internet has a noise and discovery problem. I believe that’s where the next wave of fashion tech innovation will take us.
Pinterest has found an optimal balance between aspirational browsing and shopping. Social shopping is more about discovery, conversations and relationship building, something that’s apparent in the way Pinterest users interact.
As Pinterest evolves, they will focus more on monetization and driving direct commerce. They have already experimented with affiliate links and the Rakuten investment is a strong hint at direct commerce. Here’s what I predict Pinterest might do next (purely speculative, of course):
- Branded pages for brands, stores and boutiques
- There’s already evidence that Pinterest users spend more money than Facebook users.
- Pinterest could compete directly with Facebook pages by offering brands a better way to showcase products with access to a higher quality audience.
- Integrated/Universal checkout
- If users are already discovering products through Pinterest but going off to merchant sites to transact, Pinterest should own that transaction and offer a consistent user experience.
- For smaller retailers and boutiques, Pinterest could integrate, acquire or build their own version of Shopify and let merchants sell directly on the Pinterest platform.
- For large retailers and brands, Pinterest will have to form partnerships and integrate with retailer payment systems: essentially selling products on Pinterest, and having the retailer drop ship inventory. Retailers may resist this initially because Pinterest will effectively render the merchant less relevant.
- Brands will be more inclined to work with Pinterest because they see it as an effective distribution channel. Brands can ultimately skip the retailer if they can get distribution through Pinterest. Fulfillment by Amazon (FBA) solves the logistics challenges — brands can simply ship inventory to an Amazon warehouse and have Amazon handle fulfillment. Consumers get the added benefit of Amazon Prime.
- Create an e-commerce channel
- To mitigate the risk of disrupting (and irritating) current user, Pinterest will likely create a separate shopping channel if they decide to focus on commerce (e.g.shop.pinterest.com).
- This shopping channel will be product and commerce focused. You won’t find the cute puppies and fortune cookie quotes here, but you can bet Pinterest will leverage all your data for targeting.
As Pinterest scales, the biggest challenge will be surfacing signal buried in noise. It’s the Facebook Newsfeed problem, but much more difficult because of its focus on fashion and other tastemaker products.
- Facebook is about people, so to make my newsfeed relevant it has to factor in the quality of my relationships. Who am I closer friends with, who is my family, which fan pages do I interact with most, etc. This is easy because we give Facebook that information every time we look at a friend’s photos, like a status update or comment on a post. Facebook doesn’t care what content we interacted with; it only needs to know who produced that content.
- Fashion and other tastemaker products (e.g. home decor) are highly subjective, which means that I don’t necessarily like the same clothes or sofas as my closest friends. If I like a picture of a cute puppy my friend pinned, doesn’t mean I share his taste in fashion. Aside from existing Pinterest categories, they will have to find ways to add deeper tags on the products pinned (e.g. brand, color, style, season, fabric, patterns, etc…) to accurately target.
To date, most fashion tech companies are more commerce than tech. If you look at Gilt and Fab, they’re primarily commerce companies built on fairly standard e-commerce backends with some slight twists. It’s hard to drive disruptive innovation when your KPI is revenue.
In order to fundamentally change the way people shop, we will need teams with fashion experts, product visionaries, deep technical horsepower and growth hackers. It’s a hard combination to find, especially when most hackers in the valley shlep around in jeans and t-shirts — they’re not their own target user.
What will online fashion shopping be like in the future? I believe today’s multi-browser-tab search and filter behavior will feel as ancient as printed maps and yellow pages are today.
When I have a specific purchase in mind:
- I picture myself telling Siri that I’m looking for some sneakers as I’m driving home from work.
- When I get home, sink into my couch with my iPad or turn on my Apple TV, I’m shown pages of sneakers specifically curated for me, in my size.
- I choose a few that I like, tap buy, and the shoes show up the next morning on my doorstep.
- I’m shown the latest collections and recommendations from my favorite designers, fashion bloggers and influencers (without having to search and filter on multiple websites).
- Upcoming designers are recommended to me based on my style and preferences. Some of these recommendations are computer generated, some are handpicked by designers or personal stylists.
- I won’t just be browsing product photos as I do on nordstrom.com today, it will be an interactive experience with inspiring looks, runway videos and beautiful images. Like Tom Cruise’s command center in Minority Report, except I am surrounded by Prada, Varvatos & Converse.
- I can’t tell the difference between product and advertisement because everything can be purchased with a tap or a drag.
- If I order by 11am, products will be at my doorstep by 6pm same day (Amazon already does this in China).
- Mike MacMillan
Just a simple question.. Why does the next great retail tech have to be online? Especially given bricks and mortar still account for 90ish percent of retail sales still! Who's to say one or more of the players in the world's largest private industry "retail" won't defend the store as the place to shop? After all the tech in the store for apparel at least is moving just as fast if not almost as fast as online concepts. Just go to one of the retail tech shows and there is some pretty cool tech lining up to defend the product on a real shelf or hanger. Apple has a greater return per sq foot than Tiffany and if we are being honest for a tech company they do real world retail experience the way it should be - and with people no less.
Jason Smith · Subscribe
True. I think perhaps that as people flock to sell their wares online to avoid the expense and risk of a physical retail store, the people that are left doing retail well will become more valuable. And if you can offer both, and you present customers with the credibility and accountability of retail with the convenience of online you are in for a win.
Ted Rheingold · Subscribe · Top Commenter · VP Social at SAY Media
Nice work with Monogram. I'm a 500 Mentor and I look forward to talking.
I thought I'd add the your history omits catalogs, which were pretty much ecommerce for a century and boutiques which are just as popular now as they were 30 years ago.
I see the same future you do on commerce. One of the many technologies needed along with universal shopping cart and voice interface is 3D sizing. (imo 2D sizing will never be good enough). Most women really want to know how an item will fit over their unique physiques. So stew shopping will have an advantage until then. Forany others shopping is a way to relax or spend time w friends. For others it's a way to know they're buying the current style or getting outfits that match.
I agree many catalog/ecommerce people will adopt more complete and easier online buying experiences, but those who shop in person will be harder to get.
Christine Lu · Subscribe · Top Commenter · 336 subscribers
...the hard part about 3D sizing isn't technical. It's emotional and psychological. It's such a buzz kill to have a 3D version of me trying on clothes because it's like holding up a mirror to me and reminding me that i don't look at all like the size 0 models. Too much truth up front during the purchase decision can suck. :)
Kevin Leong · Berkeley, California
Why "death of brick-and-mortar retail"? Social commerce and/or Pinterest-style presentation is making online shopping more interesting. I see Fab, One King Lane (and perhaps Monogram too) are taking business away from traditional e-commerce websites, such as jcpenny.com, target.com, walmart.com and amazon.com. I think the opportunity is providing local businesses and brick-and-mortal retailers a platform to run flash sales online - in Pinterest-style presentation.
Leo Chen · Subscribe · Co-Founder/CEO at Monogram
Death is an exaggeration, 90% of retail still happens offline. I'm just making the point that brick-n-mortar will become less relevant and eventually the economics will have to change to support their infrastructure costs. Everything is cheaper online so brick-n-mortar will become more like showrooms. If we can feel the product in stores, then buy online, physical stores will become too expensive to operate (unless brands subsidize these "showrooms"). Amazon's price check app is just a teaser for what's to come: http://www.forbes.com/sites/erikkain/2011/12/14/ amazon-price-check-may-be-e vil-but-its-the-future/
Nikita Tovstoles · Co-Founder & CTO at Ecorebates Inc
I am really surprised by the last two bullets under "Integrated/Universal checkout" - essentially "Pinterest interfaces with consumer, large retail just drop-ships". Especially since you're an ex-Amazon PM. Can you really see Amazon signing up for this scenario - being a drop-shipper and giving up customer relationship to Pinterest? That's exactly the sort of relationship that most manufacturers have with retailers today. And not a happy one...
Leo Chen · Subscribe · Co-Founder/CEO at Monogram
In this scenario, Pinterest will need a payment system to complete the cycle. What better way to collect payment than integrating with Amazon Checkout, especially if many retailers are already letting Amazon handle their fulfillment? If Pinterest can drive significant transactions, I wouldn't rule out an acquisition by Amazon either.
Bazaart
Thanks for an insightful post Leo - I found it accurate and on the spot.
Amazon or Apple - those are my two bets for Pinterest acquisition.
So excited to read your description of the ideal fashion-tech start-up team! at Bazaart (www.bazaart.co), we are all that plus a community manager extraordinaire...
Cindy Smith Engstrom · Works at Sircle Samples
This completely misses how the millennial shops = need more social in here. The mall will always exist but more like the vision Macy's has recently painted: smaller spots with 1 size of each so that the tactile needs and social needs are still met while driving down operating costs for retailers (product shipped after try on).
Andy Lenney
Great article. Also check out www.Fashionoko.com, a new p2p social fashion marketplace (live but not launched) which uses social networks to personalise the shopping experience and incorporates many the elements you refer to in your article as "the future". E.g. It uses Pinterest, which offers a fantastic platform to showcase listings and is perfect for all things fashion.- bnkausik (signed in using yahoo)
Price and product will never be the same across retailers as you claim. High volume drives low pricing and small retailers cannot get the same prices as the largest ones. Furthermore, smaller retailers suffer higher marketing costs as a percentage of sales. 
Laurie Sukis Borland · Writer at Technorati
Calling all fashion buyers who want to get knee deep in tech and start building the next fashion e-platform...I've got a great new idea for a start up.
Nicholas Marx
I disagree with a portion of the article, and have an alternative vision for the future of fashion retail. I think the future of fashion retail will be dominated by customization and bespoke items made by independent craftsmen. As they did a time ago, tailors, cobblers, and jewelers, will once again be the kings (and queens) of fashion manufacturing and retail. But this time with a modern twist!
Collaboration between maker & wearer will be ubiquitous and even the standard. You''ll be able to tap into the minds of the actual makers from all over the world about how all the different materials and styles can be configured to best fit your own body and personality right from your own computer or mobile device. You will truly be the one & only muse for the design of the things you wear. What's more is this will be on a global and ...See More
Madhu Jannapureddy · Subscribe · Johns Hopkins
Leo, great post! I think you are one 100% correct that the current models of advertising and commerce are ripe for massive disruption. Your thoughts on Pinterest's future are quite insightful. I wonder, however, if Facebook might already be better equipped to outdo everyone in this space.
The Facebook platform extends across almost every corner of the internet. They have also curated nearly a billion identity profiles. Furthermore, Facebook already has the ability to allow for one-click purchasing (mostly just used in games right now). Rather than trying to monetize in the traditional way with ads, I could see Facebook moving to a system allowing for once click purchasing, recommending, or gifting of goods and services across the internet. The advertising is already being done by its user base in the form of Likes and Sharing,...See More
Abdullah AlShalabi · Top Commenter · Kuwait City
Amazing article, one of the best written in this space. I just want to add some more insight. my friends and I interviewed 30 people from all over the world about their shopping habits both online and offline, and get the following:
- Handbags and accessories are more common to be bought online because you don't need to fit on them.
- Shoes are also common because once you know your size from a certain brand, you'll usually get the size right.
- Swimsuits, lingeries and underwear is also more convenient to buy online, since its much more convenient to try them at home than in a store.
- However, for cloths its more complicated, you need to try them to see how do they fit, the cut of the piece is different for each new design and your weight changes all the time. Its true that an easy return policy might solve the problem, but its always tricky.
Another takeaway is that girls loves shopping for cloths as apposed to boys. Shopping for men is a headache, but for girls is like going to Disney Land. That's why I believe that men will make a bigger and faster shift to online cloths shopping than girls. In short we will see mens brick-and-mortar cloths shops die first, girls shops (the bigger chunk of apparel shops) will come later.
My friends are trying to build something in this field, please be one of the first to try it www.mybuyfriends.com. I just left the startup, but my friends are still there building something amazing.
Norb Winslow · Works at Blogger
Thanks for your article! I have used pinterest on my website and the result was great, it jumped from #124 to #3 in just 3 weeks time.
The key is we must got our website pinned and repinned by many people, which is the hardest part. Most of pinterest users won't doing repin when they aren't like what we pinned.
I do simple thing to outsource it on fiverr and got my site pinned by 75 people, I don't know how can he did it just search by typing pinterest on fiverr and you will find it on the TOP. Many other seller offer pinterest service on fiverr but in my experience they can't make my website increase in SEO. I don't know why.
Benefits of Pinterest for SEO:
1. Once our website pinned it has backlinks counts.
2. You need to ping the links of your pins to the to get your website increase in SEO.
3. Even though Pinterest does not support anchor text (except the url link), it's still perfect for placing our keywords in description.
Richard Altman · 40 years old
department stores will become to pinterest etc what movie theaters are to netflix, an unduplicatable experience that, guess what, is also a really nice warehouse, think costco, BUT MORE (fuck), what kind of more? how about a real 21st C incentivization combining Air Miles style points, idiotic mayor shit badges and potentially algorithmically relevant OTHER SHIT ONLY AVAILABLE WHEN YOU VISIT THE FUCKING STORE.
Justin DiPietro · New York, New York
This was a great post as it is directly relates to what we are building over at SaleMove. The experience at a physical store with attentive sales people will be moved online. However, the great thing about moving it online is you can innovate far past the in store experience, driving up customer satisfaction along with conversion.
Dearrick Jay Knupp · Subscribe · CEO and Founder at Shop My Label
Much of what is written about, from peer to peer curation and affiliate marketing resulting in commissions up to 10 percent to the cross-brand universal cart is currently available on shopmylabel.com, launched just one week ago. With retailers such as Saks 5th Avenue, A/X Armani Exchange, Jessica Simpson representing the 32 retailers currently signed.
Jewel Declare Hru
The beauty of Pinterest has been that it makes the sharing of dreams such as the perfect dress or heels accessible to average users. The entertainment value is crowd centered. At this point it's hard to have a voice on Pinterest because of its growth. I suggest that people make their own pinterest style sites and link to Pinterest. this way you can make your own terms of service and stand out more. I run pinclones.com by the way.
Tom Benson · Top Commenter
Mmmm....one of the key parts of e-commerce is the "entertainment value". Groupon, Gilt City, etc are popular to a large extent because they are funny or exciting. Shopping as an adventure.
You said "it will be an interactive experience with inspiring looks, runway videos and beautiful images." Would like to think about how that can work.
Jasmine Soh
Great article. Also checkout www.marqueed.com. Its a tool to discuss photographs but leverages the easy of image acquisition like Pinterest does.
Roger Dalens · Erasmus University Rotterdam
Interesting article, essentially argueing Pinterest should move towards recent start-up Favour.it (http://favour.it). Let's see whether the cat-lovers are willing to have their sharing site transformed to a social shopping site :)
Katharina Kahler · Subscribe
I work on a project " Models in Motion" that is a comedy TV series, where in fictional format designers are presented with their works on catwalks and in photoshootings, build around the story of the four Models Jenny, Lisa, Carola and Melanie and their friendship in Paris. I want to create a multimedia platform with KULTLABEL. Under this label the designers can sell their products, which are shown on TV directly. For the platform I want an I-pad application. This is my vision for the future of fashion shopping. https://www.facebook.com/pages/Models-in-Motion/ 76759051577
