Twitter Inc (NYSE:TWTR)’s stock is up around 3.5% after announcing that after months of anticipation it will soon dive into e-commerce.
“The social network announced today a test that lets retailers, including Burberry and Home Depot, add the Buy button to their tweets. Only a small percentage of Twitter uses will see these posts for now, although that’s likely to increase over time, Twitter says,” wrote Zak Stambor, managing editor of Internet Retailer, a leading authority in e-commerce and publisher of Top 500 Guide.
Impulse purchasing made easy
This isn’t Twitter’s first foray into e-commerce, but it is the first time that customers won’t need to send a tweet with a special hashtag to buy the product being offered as Twitter presently does with companies such as Amazon and American Express. Instead, customers will simply need to touch a “button” inside a tweet to make a purchase. Once the “button” has been pushed, users will have to enter their payment information; if that information is already on file a simple confirmation “push” is all that is needed to complete the transaction.
To begin with, this service will be used to sell time-sensitive or limited edition items like concert tickets or T-shirts. For now, the test will allow 19 entities to use this new feature including musicians like Rihanna, non-profits like DonorsChoose, and retailers like Burberry.
“I think of Twitter as the place to connect with the things that you love,” said Nathan Hubbard, the former chief executive of Ticketmaster, who left the company last year to join Twitter to spearhead its entrance into commerce. “How can you bring a transaction into the experience to make it additive?”
Twitter to keep it simple
Many believe that the key to Twitter’s efforts in commerce is to keep it simple and not fundamentally change how Twitter is used by hundreds of millions.
“Twitter is about what’s happening right now, and so as long as e-commerce follows that approach, using sales with a short lifespan or that offer a limited number of items, it should work extremely well,” says Lou Kerner, a social media analyst and investor at The Social Internet Fund.
The test comes just a day before Apple is anticipated to show the world a new phone-based payment system built into the iPhone 6 and new iOS. Facebook Inc (NASDAQ:FB) unveiled and began testing its own “buy” button in July of this year.
The financial side of Twitter’s “buy” button will be handled by online payment processor, Stripe.