2013-10-31

Co.Labs

Starbucks Starts Selling Stuff Via Twitter

Twitter isn’t a marketplace, but the coffee chain is the first large corporation to try to use it as one.



For most of its users, Twitter is a place for social commentary—more like a chat room more than a marketplace. But that kind of agora is the perfect place to sell things, and while startups like Chirpify and Gumroad have been using Twitter to take payments, a new era of Twitter commerce may begin thanks to Starbucks.

The coffee giant is testing Twitter for commerce by allowing Twitter users to gift each other with $5 Starbucks gift cards. All they have to do is tweet "@tweetacoffee to" followed by another user’s name, and that user will be awarded with a link to a redemption code.

For this to work, you don’t need to be following @tweetacoffee. If you don’t set up and connect your Twitter account to Starbucks ahead of time, you’ll be prompted—when trying to send a coffee—to log in and enter payment info, which is how all the magic happens on the back end.

Starbucks declined to comment on how many transactions were processed over Twitter on its first day, but looking at the volume of tweets and comparing the frequency of successful attempts, a reasonable guess would be that Starbucks sold 8,000-10,000 gift cards on day one, each worth $5. Starbucks PR manager Linda Mills told me that "first-day sales exceeded our expectation both in terms of number of coffees tweeted, and also in terms of customer adoption of the technology."

Tweet-a-coffee appears as a simple project, but behind the scenes is a different story. "A full cross-functional team including IT, marketing, digital communications, and store operations has been working on this launch for quite a few months in concert with Twitter," says Mills. And looking at the @tweetacoffee account reveals a June 2013 create date.

So even with the substantial amount of work, why did Starbucks choose to invest in bringing sales to Twitter? One Gumroad statistic might be able to provide some insight. "Comparing Twitter’s conversion vs. the conversion across all social traffic sources (Facebook, YouTube, etc.), Twitter converts 18% better than the average social traffic source," says Ryan Delk, who is in charge of business development for Gumroad.

"I believe the future of commerce on Twitter is standard transactional models—credit card payments via form or login—but within Twitter itself, not via a Tweet conversation," says Delk, hinting that he thinks Twitter might build a payments infrastructure directly into the Twitter API instead of forcing third parties to hack it into a marketplace.

[Image: Flickr user Scott Hendo]






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