Amazon and Twitter meet up for social ordering
In the never-ending push to make online shopping more irresistible, Amazon (AMZN) has struck a deal to automate product ordering through Twitter (TWTR). Users can reply when they see an Amazon product link and add a special hashtag -- #AmazonCart -- to have the item placed on their shopping cart so it's available when they next log into Amazon.
The catches: Consumers must add a link to their Twitter accounts from their Amazon accounts. Also, while the products are placed into a shopping cart, they aren't automatically purchased. Consumers still have to place the order from Amazon's website.
However, the move is interesting, for both companies. It represents a potential new revenue source for Twitter, whose stock hit its lowest point last week since the company went public last fall. Investors are concerned that user growth is too low, even though Twitter beat financial expectations when it announced first-quarter earnings last week.
It isn't the first time Twitter has partnered with someone over online commerce. It began working with American Express (AXP) a little over a year ago to enable purchasing in much the same way as the Amazon deal allows. In addition to needing to improve user growth to placate investors, Twitter also needs more active users, and these agreements could help. Seeing shopping deals and responding to them could increase user activity and Twitter's standing in the view of Wall Street.
Such tie-ins also give resellers like Amazon and American Express a way to test new e-commerce approaches. By convincing consumers to link accounts together, Amazon and American Express can better test the effectiveness of advertising on the social network as well as see if alternative forms of purchasing might become worth pursuing.
Amazon told CNET that Twitter doesn't get a revenue cut for items placed into a shopping cart. However, by tracking the tag's usage with different product offers, Twitter could get more information on customer behavior and interests, potentially making it easier to sell advertising to other companies with compatible products and services. Amazon might also find that its vendors send tweets with product links, creating additional attention.
Privacy will be an issue, though, because messages with the #AmazonCart tag will be publicly visible. Many consumers might find it off-putting to let the world know what they purchase.