How Visual Search Can Make Pinterest One of the Most Valuable Companies
Pinterest is a platform for visual discovery. With social commerce and augmented reality, the company could reach a trillion-dollar valuation in the next decade.
What is Pinterest?
Pinterest is a social platform where users can compile, share, and discover images of anything they find interesting. It’s like a well-organized digital bulletin board. Users can visually discover new interests or ideas by browsing the collection of other Pinterest users. If you’re interested in cooking, search for images of recipes you like and then save those to your Pinterest bulletin board. Pinterest can become one of the most valuable companies with its visual search and e-commerce integration in conjunction with augmented reality.
Pinterest’s Main Focus is Improving Visual Search
I could go on a tangent about Pinterest’s increasing revenue, profit, ARPU, MAU, etc., but plenty of well-written articles have that information. The most compelling reason to invest in Pinterest is for its passion and determination to become the premier visual search engine, even hiring several senior employees from Google’s image search teams to help improve its technology. There are currently over 600 million visual searches on Pinterest every month. As AR glasses become an everyday device for consumers, visual search will become a more powerful tool.
The launch of Pinterest Lens shows how the company plans to integrate e-commerce into visual search. Lens is a point-and-shoot discovery tool that analyzes and interprets images to find related Pins and ideas. When a user searches for an image, Pinterest suggests similar items that can be purchased directly on the platform. Pinterest’s goal is to turn the world into a set of Pins that can be captured, discovered, and linked to each other.
Co-founder and CEO Ben Silbermann believes Pinterest Lens has core differences from competitor Google Lens. “People use Pinterest differently. When people use a tool like Google, they’re often looking to query the world and get objective information. When people use Pinterest, they’re looking to be inspired, not knowing exactly what they’re looking for. Unlike Google, which uses algorithms for search results, our Pins have been curated by humans.”
Currently, there is a dichotomy between visual search technology and consumer behavior. Consumers are not equipped with the proper hardware to use a camera as a search input. Augmented reality glasses will bring visual search into the mainstream. Consumers will use the camera like a keyboard; to search for things. The biggest names in tech: Amazon, Apple, Google, Microsoft, Meta, and Snap, are all developing visual search technologies.
The Reasons Retailers Advertise on Pinterest
Pinterest’s shoppable pins are a way for retailers to upload their entire catalogs to its pinboards. A Cowen & Co. survey found that 48% of U.S. social media users went to Pinterest to find or shop for products. Only 14% did the same on Facebook and 10% on Instagram. This is why big retailers upload their catalogs to Pinterest, and Shopify partnered with Pinterest to enable smaller merchants to launch shoppable pins with integrated payment options. The efficacy of shoppable pins and a pivot towards e-commerce is likely why Paypal was reportedly interested in buying the company for a whopping $45 billion. Last year, Microsoft tried to acquire the company for $51 billion. We need to start viewing Pinterest, Snapchat, Facebook, Instagram, and TikTok, as companies that leverage social networks to bolster their e-commerce platforms.
Pinterest has implemented AR in various ways. First, by allowing consumers to see what furniture and other home decor items would look like in their own homes. Pinterest is working with a select group of retailers: Crate & Barrel, Walmart, West Elm, and Wayfair. Second, users can try out make-up and other beauty products. This virtual shopping experience is now the company’s most significant AR shopping investment, launching in the U.S. with more than 80,000 shoppable pins.
Considering the copious amounts of time people spend on social media, it makes sense that consumers will purchase products they discover on social media directly on the platform itself rather than be guided to a third-party site.
Pinterest is in The Early Innings
Shares of Pinterest are currently 75% lower than its all-time high that was reached with help from the pandemic boost. Despite this dramatic correction, the company is taking steps to improve the monetization of its large user base. Pinterest’s Q4 earnings beat Wall Street estimates by reporting $846.6 million in revenue and nearly $175 million in net income. Motley Fool writer, Jamie Louko, makes an excellent point about why advertising on Pinterest is so valuable. “On Pinterest, consumers want to see advertisements to get inspired – something no other social media site can claim – which could make its advertising space incredibly valuable.”
Pinterest faces steep competition from Facebook, Instagram, Snap, and TikTok, all big players in the social commerce space. If Pinterest continues to innovate and grow, the company can solidify its dominance in the visual search and e-commerce space.
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