Enter Generative AI Search
We all know one of the most amazing aspects of the power in social media data is that its users are voluntarily providing lots of information about themselves. They’re saying “I like this! Look at this! Let’s go here!” And while the data itself is valuable, these social interactions also tend to elicit a high level of user engagement, which enables a healthy (and profitable) advertising revenue stream.
But ad dollars can pale in comparison to commerce dollars. It took Groupon less than 3 years using a transaction fee model to reach $2 Billion in annual revenue. Still, for most pure social media sites, those commerce dollars have thus far remained elusive. While social media sites may be effective at surfacing interesting commercial content, they have not yet figured out a scalable way to immediately drive purchase.
They would of course love to achieve this conversion nirvana, click-through oasis, or sales-lift Shangri-la. The moment when social media changes from the e-commerce highway to the destination is the moment the economics of the industry will be forever changed. But this code has yet to be cracked. Or has it?
With Fancy, if a visitor sees an incredible picture someone posted, he/she clicks the picture, and it literally provides a checkout option with the click. The layout feels like a cool blog, but everything on the page is immediately available to buy. How many millions of interesting items have people seen on blogs, only to never move past the picture on the screen to actually purchase it? What if the items that you are pinning, tweeting, posting, were easily available for you to buy it right then and there? Fancy is hoping (and betting) you’ll do exactly that.
According to Comscore MMX, Fancy has grown 252% since Comscore began measuring it in August 2011. This dramatic growth still pales in comparison to Pinterest, which has jumped more than 3,000% during the same period. What’s interesting is that only 44% of Fancy users are from the U.S. (vs.70% for Pinterest), suggesting a more international appeal. In a sense, Fancy is the first class counterpart to Pinterest, and while it may prove difficult to catch lightning in a bottle quite like Pinterest has, it may well grow into a legitimate competitor soon.
Importantly, both sites attract a younger, more affluent audience, which is very attractive to advertisers and marketers. Comscore MMX shows Pinterest skew heavily towards females age 25-34, with a household income of $100,000+. Fancy skews towards females age 18-24, with a household income of $100,000+. So both have young, affluent audiences, but only one of them allows users to purchase a $12,000 watch in thirty seconds or less.
While Fancy has adopted some similar functionality to make the experience more accessible to a wider audience (e.g. Fancy allows you to “Fancy It” like Pinterest allows you to “pin” items), it is also pushing the boundaries of what’s been done in social media to date. Not only has it integrated a simple click-to-purchase functionality, but it also incentivizes users with actual money to invite their friends to join! Clearly commerce is an integral part of the entire experience. Is this evolution from posting, to pinning, to purchasing going to bleed into the larger players?
Turning "likes" into "wants" could signal the beginning of an important trend in social media monetization. Does the success of Fancy’s model mean that highly trafficked fashion blogs, food blogs and travel blogs will turn into e-commerce engines? And what will the battle be for the big online retailers to become the site that provides the price and checkout for those items? As more and more people become "trendsetters" and "tastemakers" and "influencers", will the e-commerce tide shift away from large retail sites to trendy blogs?
This all remains to be seen, of course. But I think it’s safe to say the days of social media being on the sidelines of direct-to-consumer e-commerce are numbered. They not only want to be in the buy-it-now game – they just might need to be if they are to maximize their monetization potential.