Is Twitter the next big mobile commerce powerhouse?
In a sign that Twitter is looking to extend its mobile and social weight to commerce in a potentially significant way, the company recently hired its first ever head of commerce.
Twitter this week named Nathan Hubbard, who was previously CEO of Ticketmaster, to head up its commerce strategy. With mobile commerce sales continuing to grow quickly and social an increasingly important part of the purchase decision making process for many consumers, Twitter has strong potential to grab a slice of the pie if it executes well.
?At face value, Twitter provides an exceptionally powerful mobile platform uniquely positioned to help both drive and socialize commerce activities,? said Gian LaVecchia, managing partner and U.S. digital practice lead at MEC, Mayville, WI.
?We?ve already witnessed some of the fantastic commerce activations American Express launched on Twitter; simple, yet effective solutions which, I believe, were intentionally designed for mobile engagement,? he said. ?Moving forward, I imagine we?ll see a continued evolution of the model with Twitter providing a dynamic creative canvas that will help quickly shift the engagement equation from conversation and social sharing to more ROI-focused commerce activities.
?Of course, understanding Twitter?s massive data pipeline one can easily imagine how the social/interest graph will come into play with personalized recommendation engines and social shopping incentives."
Twitter has said it is looking to partner with retailers and payment providers as it pursues its commerce strategy as opposed to trying to create a standalone commerce solution.
These players are likely to be eager to partner with Twitter given the social networks significant user base and the opportunity this will provide to learn about how mobile, social and commerce are converging.
?When you look at the number of users on Twitter, that?s where the potential comes in for this to be a big play,? said Jeffrey Green, director of the emerging technologies service at Mercator Advisory Group, Maynard, MA. ?Whether it becomes a competitor to others in the space, that is a big hill to climb.
?Look at how long it took PayPal to grow,? he said. ?PayPal is partnering with existing players, and in that sense, Twitter is smart to do that.
?These players have an understanding how payments works, the partnerships necessary, the nuances of payments that aren?t always clear to newcomers. There are a lot of things that go on in the background that aren?t obvious. Partnerships are important.?
Twitter is likely to pursue a strategy that is native to the Twitter ecosystem and integrated into its newsfeed.
One possible scenario would be to position Twitter as a channel for impulse items.
?It's not a perfect analogy, but you can see a future where Twitter becomes the check-out aisle of mobile commerce,? said Richard Guest, president of US operations at Tribal Worldwide, New York.
?Twitter could be the perfect place to merchandise the digital impulse purchase; items with a low-price point that offer an instant gratification: song downloads, movie tickets or experience upgrades like VIP/priority entrance/boarding,? he said.
Twitter has been slowly moving toward offering commerce with introductions such as Cards, which give users a way to expand Promoted Tweets to see more information or sign up to receive additional content. Going forward, Twitter could start monetizing these clicks.
One of the benefits Twitter could bring to a commerce solution is the information it has about it users. Such data could help marketers drive results from their efforts.
?Twitter has unique access to contextual information of its users,? said Craig Davis, found and CEO of Relevvant, San Francisco. ?This access gives them the ability to assign targetable personas to its millions of users.
?Brands will be able to target commerce in the same way as advertising,? he said. ?Furthermore, Twitter will be able to collect ecommerce performance to introduce even more user-level variables for optimization.?
One of the challenges Twitter could face is the lack of understanding among many marketers of how to leverage social to drive sales.
Marketers and retailers may also need to add developers, analytics and other new functions to their social media teams in order to develop successful Twitter commerce strategies.
?The biggest hurdle they'll face is probably not the consumer's use of the card but getting companies to start thinking of tweets as viable sales platforms,? said Joe Germscheid, director of consumer engagement at Carmichael Lynch, Minneapolis, MN.
?In the short term, Twitter will need to do a much better job at publicizing their commerce abilities,? he said. ?I don't think many marketers will jump on board quickly, simply because they have pretty low awareness of how Twitter can help or even what they can do.?
One challenge marketers could face is how to position offers so that consumers see value in them.
Another challenge will be how to enable a commerce transaction that is simple and intuitive given the small size of mobile screens.
?One key obstacle Twitter will inevitably have to navigate is simplifying the complexities of the actual commerce experience itself, obviously, one-click purchase would be the ideal but that requires back-end integration with major financial institutions and back-end alignment with the merchants themselves ? challenging, yet doable,? MEC?s LaVecchia said.
Twitter will also need to address personal data security concerns.
The big unknown is if Twitter users will embrace the opportunity to purchase goods from within the social network or not.
?How will the user base respond to an even more commercial platform where many Tweets become ?buy now? messages?,? Tribal Worldwide?s Mr. Guest said. "Will they spend less time on the platform? Un-follow brands and retailers?
?These are important questions for Twitter that paint a fine line to walk,? he said.
Chantal Tode is associate editor on Mobile Marketer, New York