Have Twitter and AmEx finally cracked social commerce?
Following the latest project from Twitter and AmEx, MyCustomer.com examines the growing trend of social ecommerce and asked whether brands should be taking note.
Earlier this month, Twitter announced that it had teamed up with Amerian Express (AmEx) to launch a new social commerce service that enables cardholders to make purchases using hashtags.
The ‘pay by Tweet’ system works when AmEx customers sync their credit card to their Twitter accounts and then Tweet specific hashtags that correspond with special deals AmEx is offering from retail partners such as Amazon, Sony and Xbox 360.
Cardholders must then check their Twitter mentions for a response from @AmexSync containing a confirmation hashtag, and then send a second Tweet within 15 minutes to confirm the purchase.
Of course, this isn’t the first time Twitter’s teamed up with AmEx to launch a social campaign. The two first announced they would be working together in February 2012 to launch a self-service platform for SMEs. The service allowed businesses that use or accept AmEx cards to begin placing ads on the micro-blogging site without the assistance of sales staff.
This was followed by another deal between the two in March, which saw American Express partner with over a dozen retailers to offer its cardholders discounts in return for free marketing via Twitter.
By connecting their Twitter profile and AmEx account, cardholders could receive couponless savings loaded directly onto their synced card when they Tweeted using special offer hashtags. With limited qualifying dates, Twitter synced users to see other Tweets AmEx has 'favourited' if the deal has expired.
Leslie Berland, AmEx’s SVP of digital partnerships and development, said of the new scheme: “Based on the initial success of Amex Sync for offers, we know there is significant power in combining our assets with Twitter’s platform to bring value to cardmembers and merchants.”
So what does this new partnership bring? And following Facebook's flawed attempts at its own online commerce initiatives, could Twitter's attempt prove that social commerce does have a future?
Richard Britton from Cloudsense thinks the 'pay by Tweet' system signifies how social media is driving innovatiojn in online commerce. “In such a competitive industry, brands and retailers must respond quickly to new tools and technology that could potentially lead to increased sales,” he says.
“In this example a high end service in the form of American Express, has been able to offer a convenient service to its customers, taking advantage of the fact that many are likely to be on Twitter and engaging with their favourite brands already. The logical next step is to enable those customers to purchase there and then, without leaving the site.”
But Steve Richards from social media agency Yomego argues that, whilst interesting, the initative is no more than an “experiment”. He says: “People are trying things like this out and it might be good for ‘flash sale’ type promotions but it doesn’t feel earth-shattering.”
Social business design agency BLOOM's John Murphy agrees, and believes that rather than a ‘new dawn’, the partnership signifies “another hour of the same day”. He says: “Twitter commerce and social commerce have been around for a long time already. This is very much just application of existing commerce principles replacing previous payment methods with others.
“First we traded handing over cash to handing over credit cards and signatures; then the signatures became pins; handing over the cards became putting the information in online; putting the information in became pay-with-a-click; and now the click has become a tweet. This is definitely not a new dawn, just another hour of the same day.
“Social offers opportunities for new payment models entirely (such as 'pay with a Tweet', crowdsourcing sites or the long-defunct but very exciting Amie Street). It's here that we find the really exciting and ground-breaking opportunities.”
So is this likely to bring a new revenue stream opportunity for Twitter? Since 2010, the micro-blogging site has explored a number of ways to monetise the site including promoted tweets, promoted trends, promoted accounts and enhanced profiles.
Jonny Rosemont, head of social media from DBD Media, says: “Social media has become ubiquitous, so it’s no surprise that attempts are being made create revenue streams within the medium. But social commerce is generally hampered by one fundamental problem – the people using the medium are predominately there to socialise, not buy.
“That said, social media’s big players have succeeded in monetising their services in the form of advertising options. We have also seen attempts by businesses to set up shop in social media and to drive revenues through it. But attempts thus far have been often been ineffective.”
Richards makes the point that consumers aren’t using Twitter to shop and compares social ecommerce to “setting up a jumble sale in the corner of a pub.”
“Some people might buy opportunistically, especially if the price is right – but people aren’t there to buy, they’re there to chat, share and learn. Buying in this way might be good for the odd sale or promotion, but it ignores the way that people shop: the experience, the browsing, the comparisons,” he says.
The basic crux of whether the scheme will take off, however, all depends on consumer engagement and the popularity of such projects among their peers.
Gary Calcott, technical marketing manager at Progress Software, said: “How well pay-by-tweet is successful remains to be seen, but it raises the question of how ecommerce retailers will handle mobile payments.”
Britton concludes by explaining that the customer experience that will be the determining factor:
“Brands should pay close attention to this development as it could provide a way of more closely engaging with customers and ultimately drive more sales. Twitter is already being used by brands to highlight specific promotions and with the right infrastructure in place in the back office, could quite easily become an important sales channel,” he says.
Do you think social commerce will take off? How should brands be taking advantage of this growing trend?