Instagram and Pinterest are two of the most popular social media outlets in today's market and are each worth billions of dollars. But now the apps are looking to use their access to millions of people to make more money for other businesses.
It was recently announced that both Instagram and Pinterest will be implementing a buy feature. The in-app purchasing feature will allow users to view advertisements for items and instantly purchase them, making them digital shopping centers via e-commerce payments.
Pinterest is a scrapbooking application that allows users to pin things they'd like to make, find and, most importantly in this case, buy. In five short years, Pinterest has become one of the most popular applications in the world with 70 million monthly active users and 50 billion pins across 1 billion boards, according to the Los Angeles Times. Given this growth in popularity, many feel that the next step for the application would be to make things that users pin available for instant purchase.
"What's next for Pinterest?" co-founder and chief executive Ben Silbermann said to the Los Angeles Times at Pinterest's San Francisco headquarters. "Whenever we have to face that question, we talk to pinners. People want to buy things on Pinterest."
Becoming the middleman for businesses and shoppers
Pinterest plans to roll out the new feature by the end of June, when pinners will be able to see blue price tags on pins, which they can tap on to find the price, color options and available sizes of the product, as well as any other important information. The user will then be able to purchase the product either through credit cards or Apple Pay.
Once the item is purchased, both the order and payment are sent directly to the retailer and they'll contact the user with delivery information. There will be no fees for the Pinterest user or business they ordered the item from.
This system will change how Pinterest is used, given that users were previously only able to collect images of items they'd want and have to purchase them on another website. This new buy feature makes Pinterest a convenient middle man between the two.
Oddly enough, Pinterest won't claim a percentage of the sales made with its new feature, which should encourage more businesses to use the service. However, Pinterest may use the fact that they didn't take a cut to convince these same retailers to pay for premium advertising.
Upon launch, there will be 2 million products available for purchase from major retailers such as Macy's, Neiman Marcus, Cole Haan, Nordstrom and many more.
While Pinterest is moving toward becoming a middleman of the e-commerce market, Instagram looks to join it. The picture- and video-sharing application announced that it will introduce more advertisements geared toward users' interests. With the help of Facebook, which purchased Instagram back in 2012, Instagram will direct advertisements to users and allow them to have control in what kinds of advertisements they're shown.
With both an increasing of advertisements and the addition of a buy button, Instagram adds itself to a growing number of websites and applications looking to grow the e-commerce market.
"We're excited to bring Instagram ads to more advertisers," the company said, according to the Los Angeles Times. "Businesses are important members of our community and we look forward to learning what works together."
Members of the e-commerce community feel that this decision could be a major game-changer in regards to the future of the shopping industry as a whole.