Twitter Nears Deal With Stripe To Enter E-Commerce

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

Upon the deal’s completion, customers will be able to make purchases directly through Twitter

Social media has become a necessary means for retailers to advertise and engage with brand customers. However, last week, news surfaced suggesting that social network Twitter is preparing to engage users on another level. According to re/code, Twitter is now very close to throwing its hat into the e-commerce ring, as it is nearing a deal with payments startup Stripe. Once this deal is completed, users would be able to purchase goods directly through the social network via credit card.

Though Twitter representatives have not made any comments about this deal, one anonymous source familiar with the deal told re/code that the deal is in its final stages. Following the deal’s close, the social network could become a key channel for retailers looking to boost brand awareness and sales, as brands would be able to sell goods directly to Twitter users. This move would also eliminate the need to redirect consumers to the brand’s website. Too many clicks on a consumers’ path-to-purchase can result in deflating a consumer’s will to shop or an abandoned shopping cart. Enabling customers to make direct purchases on Twitter could help ensure that customers follow through with purchases.

This isn’t the first time Twitter has dabbled in e-commerce. Last February, the company partnered with American Express, allowing American Express cardholders to sync their card with the social network and buy products via Twitter. The company also had a similar arrangement with Starbucks, which enabled customers to sync their Starbucks accounts with Twitter and purchase gift cards for friends. However, support for these e-commerce initiatives has wavered, according to those connected with the company.

The pending Stripe deal, coupled with the recent appointment of Nathan Hubbard as its first head of commerce, shows that the company is determined to make e-commerce a part of Twitter’s future. Back in August, the company hired Hubbard to help spearhead the initiative that would enable retailers to sell goods and services via tweets, Bloomberg reported. Upon being hired, Hubbard told Bloomberg that, “We’re going to go to people who have stuff to sell and help them use Twitter to sell it more effectively. One of the hallmarks of Twitter’s entire approach has been partnering. We’re going to take the same approach with owners of physical and digital goods.”

Not only would commerce via Twitter be beneficial for retailers, twitter users, and the company itself, but it would also help provide marketers with data about users’ online shopping habits. The longer a customer stays on Twitter to shop, the better advertisers could understand consumers’ interests. Not to mention the more advertisers know about consumers on the Twitter, the more revenue Twitter will see — as advertising is a key component of Twitter’s revenue. In spring of 2013, eMarketer forecasted that Twitter ad revenue would near $1 billion in 2014. For 2013, Twitter was expected to earn $583 million in global ad revenue, with about 53 percent of that revenue coming from mobile advertising.

Want to publish your opinion?
Contact us to become part of our Editorial Community.