September 8, 2014, 9:12 AM

Twitter dives into e-commerce

The social network announced today a test that lets retailers, including Burberry and Home Depot, add the Buy button to their tweets. Only a small percentage of Twitter uses will see these posts for now, although that’s likely to increase over time, Twitter says.

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Twitter Inc. is diving headfirst into e-commerce.

The social network today announced a test that lets retailers, nonprofits and musical artists add a Buy button to their tweets. Burberry Ltd., No. 314 in the 2014 Top 500 Guide, and The Home Depot Inc., No. 16, are among the merchants participating in the test.

Only a “small percentage” of U.S. users will see those tweets, says a Twitter spokesman, although he adds that the percentage will likely grow over time.

The offers will encourage shoppers to act right away. By enabling shoppers to buy without leaving the social network, Twitter will make shopping from mobile devices convenient and easy and “hopefully even fun,” says Nathan Hubbard, Twitter’s head of commerce.

It’s a good strategy because it doesn’t force users to change the way they use Twitter, says Lou Kerner, a social media analyst and investor at The Social Internet Fund.

“Twitter is about what’s happening right now, and so as long as e-commerce follows that approach, using sales with a short lifespan or that offer a limited number of items, it should work extremely well,” he says.

When a shopper clicks the Buy button, he’ll be taken to a product page on Twitter. There he’ll be prompted to enter his shipping and payment information. Once that’s entered and confirmed, the shopper’s order information is sent to the merchant for delivery.

Twitter is working with Stripe to process payments during the test, although some merchants participating in the test can use other processors that work with shopping-focused social network Fancy, e-commerce platform Gumroad and music-focused e-commerce platform Musictoday. A Twitter spokesman says the social network will add more vendors as it expands the test.

Twitter hopes e-commerce emerges as a significant revenue driver, but it is not yet sure where that revenue will come from. The test will examine several different models that range from charging a commission for sales generated to requiring merchants to pay to promote tweets that include the Buy button, says a spokesman. Twitter is expected to account for 1.6% of U.S. digital ad spending this year, up from 1.0% last year, according to estimates by research firm eMarketer Inc. On mobile devices, the social network is expected to account for 3.5% of the U.S. mobile advertising market in 2014, up from 3.1% last year.

The social network says it is focused on keeping shoppers’ payment card information secure but also convenient. It says it will encrypt shoppers’ payment and shipping information and will not share shoppers’ credit card information with sellers without buyers’ consent.

Twitter also say it will safely store that information after a shopper’s first transaction. That will enable a shopper to avoid having to reenter his information on subsequent purchases.

The move is the boldest step into e-commerce the social network has taken to date, but it isn’t its first move in that direction. For example, last year it worked with American Express to enable its users to buy products directly on the microblogging service for AmEx cardholders who linked their cards with their Twitter accounts. And last fall it worked with Starbucks Corp. to launch a digital gift program on the platform.

The launch of the Buy button comes on the heels of Facebook testing a Buy button that lets users click the button on ads and page posts to purchase a product directly from a business without leaving the social network. 

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