Pinterest Drives Social Commerce by Shortening the Path to Purchase

As Pinterest looks to become a central figure in the social commerce space, the company is integrating more directly shoppable features across the platform to drive sales.

In its second quarter 2024 earnings results reported Tuesday (July 30), the company shared that revenue rose 21% year over year, reaching $854 million.

“We’re driving further actionability across Pinterest by launching features that allow users to move further along in their shopping journeys and take action on what they see,” CEO Bill Ready told analysts on a call. “In doing so, we more than doubled the number of outbound clicks we sent to advertisers year over year for the third quarter in a row.”

The addition of new filters such as price, retailer and brand on high shopping intent search queries across fashion and home decor verticals has been helping users tailor their searches to their preferences and budgets, driving engagement.

The platform has also made video content more shoppable with features such as Shop the Look and video shopping ads. These developments cater to the strong visual nature of Pinterest, allowing merchants to add videos to their product catalogs and promote them. Shoppable video ads have driven higher click-through rates and lower costs per action for mass retailers compared to static catalog ads, highlighting the effectiveness of video content in driving user engagement and conversions.

Additionally, the platform is stepping up its artificial intelligence to personalize the experience, improving content relevance and resulting in more engaging recommendations for users. The upgrade in Pinterest’s search ranking algorithm, incorporating new signals, has led to an increase in the global search fulfillment rate, indicating that users are finding more of what they seek when they search on the platform.

Consumers want improved personalized shopping experiences. PYMNTS Intelligence’s report “Personalized Offers Are Powerful — but Too Often Off-Base“ revealed that 83% of all consumers are interested in receiving targeted discounts and promotion offers, although only 44% reported that the offers they are receiving are relevant to them.

“We’re continuing to invest in bolstering content discovery through generative AI-based guided search, which we first rolled out several months ago for the Home Decor vertical,” Ready said. “Guided search provides a structured way to break down these broad queries in the narrower avenues of exploration.”

This approach is particularly beneficial for episodic users who may be less familiar with the platform and appreciate the structured experience to discover fulfilling results. This investment in AI and search capabilities highlights Pinterest’s effort to make the discovery process more intuitive and effective, bridging the gap between inspiration and action.

Additionally, the platform is increasing in popularity among Generation Z. This demographic’s affinity for the platform spotlights Pinterest’s ability to meet these young consumers’ demand for creativity- and self-expression-driven platforms.

Gen Z consumers disproportionately shop via social media, per PYMNTS Intelligence’s study “Tracking the Digital Payments Takeover: Monetizing Social Media.” The findings showed that 43% of consumers use social media to discover goods and services and 14% do so to make purchases. For Gen Z, those numbers rise to 68% and 22%, respectively.

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