Tuesday, 4 September 2012

Why is Apple Buying Online Pinterest Competitor Fancy?

Image representing Apple as depicted in CrunchBase
Image via CrunchBase
At the beginning of August, Business Insider reported that Apple was in talks to purchase Fancy, an online competitor to Pinterest. According to it's site, Fancy

"is part store, blog, magazine and wishlist. It's a place to discover great stuff, to curate a collection of things you love, to get updates on your favorite brands and stores and to share your discoveries.Use it to create a catalog of your favorite things around the web and around the world."
 The Business Insider article states that the objective for acquiring Fancy is to

"secure a role for Apple in the growing e-commerce market, putting the 400 million-plus users with credit cards on file with Apple's iTunes Store to work shopping—with Apple getting a cut of the action. . . [The Fancy] is much farther along in linking its users to transactions. The Fancy takes a 10 percent cut of purchases. Last we checked in, sales were exploding."

However, as Apple very well knows, just having the users with their credit cards on file through their itunes store, doesn't mean that they are going on a shopping spree anytime soon, particularly when all their e-commerce at this point is tied up in their iTunes store and the Apple Store. The conversion to actually spending money using the stored online credits is a much tougher proposition to crack, though Apple has tried to kick start the process with its new Passbook. However, Passbook only allows users to store discounts, gift cards and airline tickets; not spend money with it. The Fancy "could change all that by giving Apple a clear route to converting people's interest in an object into a sale. Apple could well build an e-commerce layer into its operating system and let application developers hook into it, giving them a way to make money besides advertising." This would allow them access to revenue without destroying the simplicity and ease that the iTunes store and Apple store provide.

Apple, Pinterest and Facebook, amongst others, are missing the point behind the popularity of these types of sites. These sites are all about "likes". Users troll the web looking for interesting things and, when they find something that catches their fancy, they "pin" it to a board where others can see the cool things they find. It's all about social voyeurism. I pin things to my boards to show how sophisticated and web-savvy I am. It's a race to share the coolest items, the hottest trends, the niche things that no one knew about until you "discovered" them.

Just taking a look at the offerings hosted and highlighted by Fancy today, you can see that one of the highlighted items is a Magic Iron Chain Wine Bottle holder. On Pinterest today are pictures of fashion items nestled in amongst a crocheted rose for a baby's foot, a picture of Villa Rotterdam and a picture of retro kitchen. While occasionally I do see things of interest that I could see myself buying, here is where the second problem lies with these sites. Often the pictures are not linked to where you can actually buy them. A set of blue suede shoes that I found on Pinterest didn't link me to the store where I could buy them but rather took me to a personal tumblr blog that also featured images of nude women. Granted this doesn't happen 100% of the time and some of the images do link to actual stores (often ones posted by the stores themselves), but it happens often enough that it gets discouraging. In fact, another recent article from Business Insider suggests that Pinterest is not able to convert sales as well as it was supposed. The article states that,

"Pinterest users are far more likely to share a purchase than Twitter or Facebook users—but that shared items generate far less revenue than Twitter or Facebook."

The article goes on to say that,

"a post on Twitter generated far more revenue—$33.66 an order—than Facebook, at $2.08 an order, or Pinterest, at 75 cents an order. That's great news for Twitter, which will surely tout these figures as it makes a push for retail advertisers.But it's kind of bad news for Pinterest, which recently raised $100 million at a $1.5 billion valuation on the premise that its site—which is all about sharing beautiful images of things to buy—should be good at this kind of social commerce."

Why is Pinterest and, by generalizing, other sites having this difficulty in converting sales using images?

Because, again these sites are all about "likes" not "wants". I like that living room set. I'm not necessarily going to go out and buy it even if I could find it, but I like it and will share it with my friends. I like that man's suit and I will share it with others but wouldn't actually buy it as it might make me look like I just stepped out of a catalog. I like that car but I could never afford it.

Social voyeurism. I can create the sense that I have good taste, a niche taste by what I pin as my "likes". But it's just a facade.

So, why would Apple buy Fancy if the sales conversion isn't actually going to happen? It could be for the skills of the developers. It could be because Apple needs to get into this arena before Facebook or Google gets too far ahead. But unless all these sites understand what makes these Pinterest style sites so popular before gobbling them up, they are just going to end up being disappointed.

This is why we are developing iWishfor. We are creating a site that saves and shares things that people actually want. Because they enter products into their giftlists to share with others as gift ideas, people are going to actually share things that can be found and will actually convert into sales. While I might put an image of the new Tesla electric car onto my Pinterest board, I'm not going to add it to my iWishfor list because no one will actually buy that for me. Instead, I am going to add a book I found off Amazon, the measuring cup that digitally weighs whatever is in the measuring cup (I added that item to my wife's list) and the Roots Oxford shirt that I know will look amazing on me.

Therefore, in the long run, we are going to be creating a database, a storehouse, an online image display of real things that real people really want and will buy for others. iWishfor is going to be the site that Pinterest and Fancy are going to replaced by and the site that Apple should really be thinking about purchasing. Who needs a site that just shows what people like when you can have a site that clearly demonstrates what people really want and shows it through the lens of important social relationships.

iWishfor is going to change the face of mobile and online marketing, product discovery and sharing. Watch out Pinterest and Fancy!

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