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Zappos' PinPointing Needs Work And Is Unlikely To Move The Needle

Posted
8/31/2012 8:59:00 AM
By: Trefis
Referenced Stocks:AMZN;FB;GOOG;LNKD;ZNGA

Amazon's ( AMZN ) Zappos online store recently launched a new service that recommends items based on what users post on Pinterest. The move aims to benefit from the popularity of the social-sharing site. A new web page was created by a team at Zappos Labs and is called PinPointing. The consumers can see suggestions that relate to their own personal pins or those of other users. Zappos aims to help shoppers discover its breadth of products through friends and celebrities as it tries to debunk its reputation as a seller of shoes only. The page suggests Zappos products, such as shoes, dresses, etc based on Pinterest posts. After a few quick tests, the recommendation engine needs a lot of work as the items suggested, often had little relevance with the pin.

We currently have  $220 estimate for Amazon which is approx. 10% below the market price

Pinterest approves of Zappos PinPointing site

While Zappos has approval from Pinterest for the PinPointing site, the companies aren't officially teaming up. Zappos users can already share what they buy through Facebook ( FB ), Twitter and Pinterest. Historically, consumers share more often on Pinterest than the other two social networks while between Facebook and Twitter, the former is more popular. Mr. Will Young, a director at Zappos, stated that posts on Twitter brought in the most revenues - an average of $33.66 an order while Facebook posts garnered $2.08 per order and sales from Pinterest were 75 cents on average. This essentially means that Twitter is the most valuable portal for endorsement and Pinterest has a ways to go.

The long-term ramifications of this move if it is extended to the Amazon.com platform are debatable. Zappos sells lifestyle products which follow seasonal fashion trends and become obsolete over a short span of time. Knowledge of the current trends as gathered from the PinPointing page is sure to help users make their purchases while staying trendy but we feel is unlikely to make a considerable splash.

This social buying has less appeal for goods such as many electronics and general merchandise that are available across Amazon.com's platform and are less prone to trends, and this makes up the majority of Amazon's sales.

Overall, this service may help boost some traffic and stickiness for Amazon, but given its current form, we don't think it will have a meaningful impact.

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