Twitter Is Trying Out A New Line Of Business - It's Adding 'Buy' Buttons To Tweets For E-Commerce

Twitter is taking a stab at e-commerce.

Today, the company's announcing it's rolling out a "buy" button for a small number of U.S. users. Over time, that will grow to include all U.S. users.

Here's how Twitter says it works: "After tapping the 'Buy' button, you will get additional product details and be prompted to enter your shipping and payment information. Once that's entered and confirmed, your order information is sent to the merchant for delivery."

This product is the result of Twitter's head of commerce, Nathan Hubbard, and his small team. Hubbard was previously CEO of Ticketmaster. He joined Twitter about a year ago.

For the most part, e-commerce has failed on social networks. Facebook, for instance, bought a startup called Karma, which it turned into "Gifts." Gifts was a way to quickly send a friend a present, but it never gained traction and was recently shut down.

Between 2011 and 2012, Gamestop, JC Penney, Nordstrom, and Gap opened and closed stores on Facebook. At the time, Gamestop's marketing and strategy VP Ashley Sheetz told Bloomberg, "We just didn't get the return on investment we needed from the Facebook market, so we shut it down pretty quickly ... For us, it's been a way we communicate with customers on deals, not a place to sell."

Even Twitter previously tried and failed with a daily deals service called Early Bird.

The theory about e-commerce in social networks is that people are there to hang out, not shop. So, it just doesn't really work. Chris Dixon, an investor at Andreessen Horowitz explained Facebook's failure in 2012 by saying, "Facebook is like Starbucks where everyone hangs out but no one ever buys anything."

Hubbard says Twitter will be different for three reasons:

1. Twitter's algorithms can help users see the right offers. Hubbard says Twitter's "interest graph, geo data, and contextual data" should help an e-commerce product.
2. Twitter is a hive for influential people. "Influencers, as they weigh in, can accelerate users down the purchase funnel," says Hubbard. When someone on Twitter says, "this is cool," it has far reaching impact and can lead to sales, says Hubbard.
3. We are moving to more "on-demand services" and Twitter is a real-time network that exists in the moment. A big trend in e-commerce startup land is instant gratification. You want something right now? There's a company that can handle that.

Of these three reasons, the last is the most convincing. Twitter, which is a real-time network, could grab some business from people who want things in the moment. Otherwise, it's hard to see Twitter driving much commerce.

Twitter's best (and perhaps worst) feature is that it's a frantic messy place. It's an A.D.D. social network with tweets flying past you quickly. Even if you saw something you were interested in buying, odds are a new tweet has caught your attention before you can hit the buy button.

Interestingly, Hubbard says if Twitter sees traction with the new e-commerce product, it may have to think about how to deal with the speed of the Twitter stream: "If through this testing, if we see users want to engage, have to think about consumer product evolves to manage that."

Fearful that people might misinterpret that comment, he followed up by saying, "I don't think about adjusting the core product. I just think adjusting." He added, "The good thing about Twitter is conversation, vitality. If we think there's a there there [with this commerce product], that's something we'd think about. We're always thinking about how we evolve the product. How to make it better for users."

While e-commerce has generally failed at social networks, Hubbard figured out how to use Facebook and Twitter to drive sales for Ticketmaster. When people bought seats to a concert, or a game, they could share the location of their seats on Facebook. Then their friends would see those seats and click through to Ticketmaster.

Hubbard says this success led to him joining Twitter. "I was coming to Dick and Adam, saying, 'Why aren't you doing more of this?'" (Dick is CEO Dick Costolo, and Adam is Adam Bain, President of Global Revenue.)

"Dick said, 'I don't have anyone working on this, why don't you come and do this,'" says Hubbard. And so he built a small team, acquired a startup called Cardspring, and today we will begin to see the results.

As far as revenue from e-commerce goes, for now it will be small. This is mostly a test to see what works and what doesn't. In the short term, revenue is not the focus.

Here is Twitter's official blog post on the buy buttons:

Today we are beginning to test a new way for you to discover and buy products on Twitter. For a small percentage of U.S. users (that will grow over time), some Tweets from our test partners will feature a "Buy" button, letting you buy directly from the Tweet.

This is an early step in our building functionality into Twitter to make shopping from mobile devices convenient and easy, hopefully even fun. Users will get access to offers and merchandise they can't get anywhere else and can act on them right in the Twitter apps for Android and iOS; sellers will gain a new way to turn the direct relationship they build with their followers into sales. We're not building this alone: we've partnered with Fancy (@fancy), Gumroad (@gumroad), Musictoday (@Musictoday), and Stripe (@stripe) as platforms for this initial test, with more partners to follow soon.

In our test, an entire purchase can be completed in just a few taps. After tapping the "Buy" button, you will get additional product details and be prompted to enter your shipping and payment information. Once that's entered and confirmed, your order information is sent to the merchant for delivery.

We built this test experience with your trust and security at the forefront. Your payment and shipping information is encrypted and safely stored after your first transaction, so you can easily buy on Twitter in the future without having to re-enter all of your information. Of course, you can always remove this information from your account. Your credit card is processed securely and won't be shared with the seller without your permission. For more information about our security and privacy policies, please visit our Support page here.

We'll be starting the test with a group of artists, brands, and nonprofit organizations, so follow them now and look out for great products over the coming weeks:

• Beartooth (@beartoothband)
• Brad Paisley (@bradpaisley)
• Burberry (@burberry)
• Dan+Shay (@DanAndShay)
• Death From Above 1979 (@dfa1979)
• Demi Lovato (@ddlovato)
• DonorsChoose (@DonorsChoose)
• Eminem (@eminem)
• GLAAD (@glaad)
• GLIDE (@GlideSF)
• Global Citizen (@GlblCtzn)
• The Home Depot (@HomeDepot)
• Hunter Hayes (@HunterHayes)
• Kiesza (@kiesza)
• Keith Urban (@keithurban)
• The Nature Conservancy (@nature_org)
• Megadeth (@Megadeth)
• Mike Stud (@mike_stud)
• Panic! At The Disco (@panicatthedisco)
• Pharrell (@pharrell)
• Paramore (@paramore)
• (RED) (@RED)
• Ryan Adams (@TheRyanAdams)
• Soundgarden (@soundgarden)
• The New Pornographers (@TheNewPornos)
• twenty one pilots (@twentyonepilots)
• Wiz Khalifa (@wizkhalifa) 9/11 Day (@911Day)

Watch for more offers from artists and brands you love coming soon.