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Have Twitter’s Commerce Efforts Flown the Coop?

May 25, 2016

Twitter is scaling back its commerce plans, according to a report from Buzzfeed on Wednesday. The struggling social media company has ceased further development of its "Buy" button, which lets users to shop for items directly from Tweets, and disbanded the team responsible for it.

Twitter’s recent commerce ambitions had focused on the Buy buttons and the potential opportunity of social commerce. People who clicked on buy buttons could view product information like size, color, and style without leaving the microblogging service.

After choosing an item to buy, users would enter their shipping and credit card information. Twitter started testing the buy button in 2014 with major retailers and celebrities like the Home Depot, Burberry, Pharrell Williams, and Demi Lovato, and partnered with e-commerce software companies Shopify and Bigcommerce to expand the reach of the button last year.

But Twitter has provided very little data about how many people are actually clicking on buy buttons and making purchases. Today's report about the company's retrenchment could be a sign that the buttons had failed to catch on and that company no longer wanted to continue to invest more money in the project.

Twitter's decision to curtail development of the buy button comes as the company tries to turnaround its slumping business. Its shares (twtr) have plummeted more than 60% over the past year amid investor concerns about slow user growth.

Additionally, Twitter has had to pay out cash and stock bonuses in an effort to keep more employees around after four top executives left the company in January. In October, the company said it would cut 8% of its staff, or around 336 employees.

According to Buzzfeed, the commerce team has been redeployed to other areas within the company, although some members have left entirely. Those remaining joined the customer service team and the dynamic product ads, an ad format that lets advertisers serve ads on Twitter based on products users have recently viewed on the advertisers' websites.

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Twitter released this statement to Buzzfeed and Fortune about the report: “We made a change 3 months ago to INCREASE our investment in commerce by moving fully into Dynamic Product Ads after seeing the great early results (2x the CTR, 2x the conversion rates) we talked about in our Q1 earnings call. We have more product, engineering and business focus on commerce as a result of focusing on DPAs. The bottom line is DPAs work for advertisers and we will continue to invest in that product.”

According to one source familiar with the matter, the buy button is still alive. And from Twitter's statement, it sounds like any commerce efforts are being invested in advertising products. It could be that the buy button is simply going to be shifted into being an ad format.

If social commerce isn't working for Twitter, it also calls to question whether other social networks such as Facebook and Pinterest, which both have buy buttons of their own, are seeing a similar pattern. Both companies have been relatively quiet about the progress of their respective commerce services.

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