This undated image provided by Pinterest shows the popular link- and photo-sharing website's new updated site. The update now offers people a simpler navigation and new ways to arrange their boards to fit their needs. Although the haphazard spirit of Pinterest remains, the site is much less overwhelming. (AP Photo/Pinterest)

Retailers are pinning some of their Christmas hopes on Pinterest, the digital media site. If Facebook is about friends and Twitter is about interests, then Pinterest is about things – and that is a welcome discovery for stores looking for ways to fuse social media and ecommerce.

A loosely organised digital pinboard, Pinterest lets users post images of products they like, compile wish lists and browse the choices of others. Recent hits include a Gap striped hoodie, Tory Burch boots and a do-it-yourself picture frame made from Popsicle sticks.

For a time the tech elite looked down on Pinterest, seeing it as a tool used by mums from the US Midwest, but the surge of retail activity, and its recent $3.8bn valuation, show that has changed.

Danny Maloney, chief executive of Tailwind, an analytics company, says this will be the first Pinterest holiday season. The site, he says, occupies a middle ground between Google searches and Facebook sharing: “A very positive place to be.”

The three-year-old company still does not have any revenue, but it is experimenting with advertising and riding two important trends: the visualisation of browsing online and the socialisation of merchandise choices.

Together they are helping to foster a new era of internet shopping. Google and Amazon let people search for products they know they want, but start-up executives say the next iteration of ecommerce will replicate the “discovery” process of browsing a mall with friends and finding things you never knew you needed.

According to Curalate, a visual analytics group, 30 of the 50 retailers with the most online sales have added Pin It buttons to their websites to let consumers post the companies’ products in their own Pinterest collections.

“The web is being indexed by humans,” says one Pinterest executive, who draws a contrast with Google’s algorithm-centric approach to online search.

Pinterest has also enabled “rich pins” that show information on product availability and prices, a tool that Target, the style-conscious US discounter, has adopted enthusiastically.

Pinterest screenshot

Ahead of Black Friday this week, the big US shopping day that follows Thanksgiving, some retailers have tried to drum up excitement for their discount deals on Pinterest. Macy’s department store offered sneak previews and Lowe’s, the home improvement store, showed alluring silhouettes of blenders and drills.

The rush to Pinterest comes at a time when visual social networks are hot property, especially among young people and on smartphones. Facebook bought the photo-sharing app Instagram for $1bn in April 2012 and recently had a $3bn offer rejected by the founders of Snapchat, a photo and video service.

Apu Gupta, co-founder of Curalate, notes that humans have been processing imagery for far longer than they have been processing words. “What we find is that imagery in general seems to prompt an emotional response in people much faster,” he says.

Joe Kutchera, who advises companies on social media marketing, says: “In a world where we are overwhelmed with so much to read and where there is so much noise, visual social networks enable you to capture the whole ‘a picture is worth a thousand words’ idea.”

Pinterest has already lost some ground to a rival called Polyvore that is more explicitly focused on ecommerce, but Mr Kutchera says it must also beware of repeating MySpace’s mistakes and alienating users by becoming too commercial.

Pinterest had nearly 44m unique visitors in the US in October versus Facebook’s 178m, according to ComScore. In October eBay took a leaf out of Pinterest’s book by launching its own photo-based product collection tools.


But for all three “social commerce” is still in its infancy. John Donahoe, eBay’s chief executive, told the Financial Times: “Online is exploding in the category of engagement and social, but commerce and social has not really intersected.”

Less than 1 per cent of online shopping sessions originate from social media, according to research by RichRelevance, which makes ecommerce tools.

When social media users follow a link to a retail site, those who come from Facebook are more likely to buy something, but the traffic from Pinterest is “more meaningful” because pinners spend more money, says Diane Kegley of RichRelevance.

Facebook users who buy something spend an average of $92, according to RichRelevance data, and tend to shop “opportunistically” says Ms Kegley. Pinterest users arrive determined to shop and spend an average of $199.

Mr Gupta of Curalate says Pinterest’s advantage for consumers is that it lets them engage with a single object as opposed to a whole brand, which is what Facebook pages tend to do.

It also helps retailers with a perennial struggle: knowing which products to highlight from their merchandise catalogues. Going for the top sellers does not work because they are often dull and utilitarian, but Pinterest can solve that problem, says Venky Harinarayan, an investor and former executive at Walmart and Amazon. “Pinterest really gives you a sense for what’s cool,” he says. “Effectively you have crowd-sourced that problem to a large audience.”

Target and Walmart, the world’s biggest retailer by sales, now show lists of the most pinned items on their own websites. Topshop of the UK displays its own list on giant touchscreens in its shops and Nordstrom, a US department store, has put physical Pinterest tags on store products that are most popular online.

While Pinterest is generating most of the holiday buzz, Mr Harinarayan says it and Facebook can become different pieces of the “social shopping” puzzle. “Pinterest is about product. Facebook is about people. If someone could bridge these two things it would really be a killer.”

Additional reporting by John Gapper

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