Buy Button: Social Networks are Becoming Online Traders

Graphic: volpelino
Graphic: volpelino
Twitter, Facebook, and Pinterest – three social networks, which are dutifully working on a buy button. With the help of this button, users should be able to purchase a company’s product directly via the corresponding fan page. There is huge potential here, especially for Pinterest, as the target group not just because it consists of young women who favour the categories furniture, fashion, and jewellery, but the network is simultaneously structured like a digital catalogue.
But the future could hold far more than just a simple purchase via a buy button: who isn’t a member of a Facebook flea market group? Here private people sell articles they don’t need anymore. Facebook is already testing a basic model for such a platform a la eBay. The introduction of a buy button is just the beginning and goes beyond the term ‘social commerce’. What will it mean for trade if social networks make the complete purchasing process within one network possible?

Social commerce isn’t enough anymore

Communication and interaction with the customer via social channels was, and is, the main component of social commerce. Purchase and sale recommendations in reviews also count as part of this. The aim is to generate custom via the networks and to lead them to your own shop. With the introduction of the buy button, this is no longer necessary.

You are still being diverted to the shop from Facebook
You are still being diverted to the shop from Facebook

Social networks are taking over the job the online shop had before them: shop, software, payment and logistic systems are made available by Facebook, Twitter and co. In this way, the network gains more information about the user, while traders are increasingly losing sight of their customers.

Not just competition with each other

The fact that ever more social networks are thinking about introducing a buy button does not only have to do with the competition between them. Rather, they are reacting to companies like Amazon and Google, who have long left their core business and are now wondering into the areas of others. For instance, Google is also planning the introduction of buy buttons, which are supposed to function similarly to the Amazon 1-click process. Searchers will no longer be directed to Amazon product pages, but can purchase directly via the Google search.

» A Google “buy” button would obviously circumvent shoppers in a hurry and direct traffic away from Amazon. «

So why not copy search engine providers? The information, which you receive about a product is especially valuable for a network’s own adverting, be it for Promoted Pins, the advertising network of Twitter, or the Facebook advertising service Atlas. Additionally, customers are supposed to be drawn away from other portals. The competition between Google and Amazon is in focus here as well. In a study, Searchmetrics discovered that Amazon is still used as a search engine for gift ideas before Google. The social networks lag behind, although Facebook still reached 23 percent. But in contrast to Amazon, the presents aren’t purchased on Facebook – unless you come across them in a flea market group.

Grafik:Searchmetrics
Graphic:Searchmetrics

Preparations are underway

You can see that the networks mean business from the current developments in Facebook and Pinterest. In the future, the Zuckerberg network wants to optimise the flea market system already mentioned. Selling should function like eBay classifieds. Facebook makes a mask available to users in the form of structured posts, which are specially tailored to selling. Pinterest is also coming closer to monetisation. The image network recently began with the introduction of various affiliate links, which are attached to pins. These are hard times for the fashion blogger who will lose important sources of income. Cooperation with Apple also shows that Pinterest is now activity driving monetisation and does not want to become a second Twitter.

What does the buy button do?

Up to now, we only heard that the buy button collects information, and that the competition should coax out the user. This functions through a user’s closer connection to the social network, although the length of stay should also be increased – which is less of a problem on Pinterest. In addition to this, extra income is generated by feeds.

» Additionally, the buy button increases the user’s length of stay, because they can now remain in the dark blue sphere of “likes” and “followers” to do their shopping. «

Traders however, might be able to catch their breath in one point. Both the legal situation and the attitudes of users towards privacy could be dangerous for the buy button. While a rather relaxed attitude towards data security reins in the U.S.A., German social media users are more careful, both with sharing their data with third parties and internet security in general.

Vergleich des Unisys Security Index
comparison of the Unisys Security Index

Everything stays within the network

Buy buttons are all well and good- but what is with the cogs behind them? At least in the area of payment, social networks have already found a solution: Stripe. The payment service is already the big winner with the buy buttons, as they are already cooperating with Facebook and Twitter and are also in negotiations with Pinterest. With David Marcus, Facebook has also brought comprehensive payment know how on board. While everyone seems to be betting on the same payment service, the logistic situation remains unclear.

» The “buy” button will become (or is already) a commodity, whereas logistics is the new battleground for differentiation, innovation, and winning the customer. «

In order to raise the pressure on the competition, social networks needs a fitting and, ideally, unique logistics system. This poses the question as to whether or not they will out-source to another partner for this, or if they’ll follow the example of Google, Google, eBay , or Amazon. Same-day-delivery, delivery fees, click and collect, or planned delivery dates – there is a lot of room for innovative ideas in logistics.

New online merchants will emerge

The integration of the buy button is only the first step. Social networks are pushing into new territory, just like other large internet companies, and will not simply stop with the buy button. Facebook is already selling things – keyword: flea market groups – so why not simply take control over this process? Pinterest, on the other hand, would be ideally suited for the sale of fashion items because of the nature of the community. With the buy button, social networks are just getting their foot in the door, which should never the less alarm merchants. This is also how Martin Gross-Albenhausen from bevh sees things:

» To speak of a change in trade is an understatement – a new ecosystem is emerging here. «

The introduction of the buy button is by no means of the same calibre as that of the much-mocked social commerce. Never the less, the concept still has to prove itself. Should the buy button be well received however, whether on Twitter, Facebook, or Pinterest, the social networks will certainly mix things up as new big players in trade.

Like and buy – what do you think of the symbiosis between social media and e-commerce?

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