Why Amazon wants you to use Twitter hashtags to shop

Amazon is tip-toeing into the burgeoning world of social shopping, one where consumers buy goods through their social networks.

The company's new hashtag #AmazonCart (and #AmazonBasket in the UK), rolled out Monday, is designed to make it easy to add items to your shopping cart without leaving your Twitter feed. It's a way to attract potential new, more socially savvy, consumers, particularly those who increasingly spend their time on the Twitter smartphone app.

"Twitter offers a great environment for our customers to discover product recommendations from artists, experts, brands and friends," said an Amazon spokeswoman.

Purchasing goods through your social network may sound bizarre, but it's just another way the Internet is changing how we shop. Amazon isn't even the first. In late 2012, Facebook let users send each other physical gifts through their timeline in a service that ultimately flopped. Chinese social network Weibo, known as the Chinese version of Twitter, launched a "buy" button last year through its partnership with e-commerce giant Alibaba. Over the past two years, startup Chirpify has been running similar shopping campaigns on Twitter.

"We are super excited," said Kevin Tate, the chief marketing officer for Chirpify. "This is specific -- only add to cart and only in social and only Amazon -- but it's Amazon, so lots of people will see it. They'll try it out and I think it will show the potential of using a hashtag to get what you want."

Action hashtags

Chirpify, which is not working on Amazon's campaign, rolled out its action hashtag function last fall. If a consumer sees a product or deal they want in a tweet, they can reply to the tweet with the action hashtag to trigger an action. So if a company sent a tweet like, "Win a free pack of gum! Just reply with #want," a consumer can simply tweet back "#want," to enter the drawing.

Chirpify's clients, brands such as Oreo and Forever21, and musicians like Lady Gaga and Green Day, typically strike licensing deals with Chirpify and use action hashtags to run campaigns on Twitter, Facebook, and Instagram. The companies choose a hashtag to perform a specific action and then ask fans to reply to tweets or send out tweets with the hashtag in order to win a contest, get a coupon, or buy a product. In some instances, Chirpify will take a cut of the sales.

Tate said he believes Amazon will move the needle for the entire social shopping industry.

Last year, American Express launched its own Twitter action hashtag that allowed people to purchase certain products after syncing their credit card accounts with their Twitter accounts. American Express wouldn't say how many people used the hashtag or how much merchandise was sold, but a spokeswoman did say that the items, which were offered at a discount, sold out quickly. These included a $95 Rebecca Minkoff purse that sold out during Fashion Week, and $25 American Express gift cards that cost $15 that sold out in the first 12 hours they were offered.

Weibo's "buy" button resulted in $20 million in revenue in the following quarter.

Still, social shopping remains a niche business. There's an opportunity for Amazon and its customers to learn what the benefits and drawbacks are of sending a tweet to make a purchase. While #AmazonCart can only send items to a cart, other companies use action hashtags for a variety of campaigns and functions -- promotional giveaways that generate thousands of tweets, or the special promotions of limited-edition items, like a recent Adidas campaign. Amazon could eventually incorporate these additional features.

So far, interest hasn't been hot. Only a small fraction of Amazon's hundreds of thousands of users were willing to give the new hashtag a try. By the end of the business day on Tuesday, the @MyAmazon account -- the Twitter account that automatically responds to these action hashtag tweets -- delivered roughly 3,357 tweets replying to the action hashtag #AmazonCart. That means Twitter shoppers used #AmazonCart 3,357 times.

Amazon's official Twitter accounts have promoted the hashtag, as did some brands, including popular video game "Watch Dogs," which promoted preorders of its new PlayStation 4 game through its Twitter account.

Going after mobile

There's another reason why Amazon has partnered with Twitter: the social network's strength in mobile.

With consumers increasingly spending time on their phones instead of PCs, it only makes sense for Amazon to ensure it has a strong presence in mobile. A social media push like #AmazonCart quickly taps into mobile shoppers and also lets a company gather data through their interactions.

For a company likes Chirpify, Tate said a majority users, between 60 percent and 70 percent, come from mobile, but the demographics are varied due to the range of products and promotions.

The users on American Express and Amazon's campaigns are most likely also mobile customers, given that 78 percent of Twitter's users access the site through mobile. But, Amazon's campaign is not just about gaining more mobile users; it's also about tapping into the power social media has to make people buy things, according to CRT Capital Group Analyst Neil Doshi.

"Amazon has a very strong mobile presence, that is a tailwind for its e-commerce business," he said. "Using Twitter just shows that Amazon is willing to use social mobile experiences to drive more sales. But, we wonder how many Twitter users would use this feature, as it might be a new way to shop."

Part of what is at play here is speed and convenience. Tate said Chirpify launched on Twitter first because the network was easy to develop for and because Twitter's ephemeral quality created an environment that generated real-time exchanges between users and brands. It gives customers the feeling of control over those particular purchases, Tate said.

When Chirpify first started, it focused on letting users purchase products by asking them to tweet the word "buy" to purchase something. But, the company has since realized that an action hashtag is more effective because it is used, essentially, as a marketing tool.

Still, aside from limited-edition items or special deals, it's hard to get people to actually purchase something in a social media instance. The slow response to #AmazonCart illustrates that barrier.

But Amazon could change the perception of social shopping by tying it to its solid customer service reputation.

At least, that's what companies like Chirpify are hoping. Tate said he thinks this will eventually change the way customers approach shopping in general, particularly in a changing world of mobile, where consumers may scan their social feeds only for a few minutes at a time, perhaps as they wait in line at the coffee shop or for an elevator to arrive.

"I think it's going to take awhile, and what we're all learning -- brands and platforms -- is how to best take advantage of how social is inherently about discovery and getting attention," he said, adding that it's about piquing the interests of a consumer in a different and direct way.

"What part of the shopping process can we create a shortcut to?" Tate said. "We can learn how to take advantage of our customers' attention in that way...If we can get a consumer to say 'oh, yeah,' then that's a really powerful thing."

Update, May 7, 10:54 a.m. PT: Clarified that Chirpify is not working with Amazon on its hashtag program and corrected the #AmazonBasket hashtag.