The future of e-commerce will be about ‘rediscovering the joy of shopping’: Pinterest CEO

Pinterest CEO Bill Ready sits down with Yahoo Finance’s Brian Sozzi at the 2023 Shoptalk Conference to discuss the company’s e-commerce strategy, details his view on the future of social media, and the integration of AI technology.

Video transcript

DAVE BRIGGS: The country's major retailers, from Foot Locker to Walmart, are in Las Vegas this week for the huge annual industry event called Shop Talk. Yahoo Finance's executive editor Brian Sozzi is there at Mandalay Bay in the center of it all. Hello, Sozz. What have you got for us?

BRIAN SOZZI: Yeah, it's a tough life. But somebody's got to do this gig, Dave Briggs. As for me, I caught up with Pinterest CEO Bill Ready, talking about where he plans to take his business this year. He told me he wants to make the platform more shoppable. At the same time, he's also keeping an eye to all things TikTok.

BILL READY: Well, so we have a lot that we've been doing to make all of Pinterest shoppable. And one of the new things we're talking about is how we're getting even more ways for people to rediscover the joy of shopping. The first 20+ years of e-commerce is really about instant buying, making the buying more seamless. I think the next 20 years of e-commerce is going to be about rediscovering the joy of shopping, how you walk the bazaar, how you become inspired and discover. And this is already a natural strength for Pinterest, but we're doing a lot more to make the existing products on Pinterest shoppable.

And now, we're bringing features from our Shuffles app that lets people make digital collages, bring that right into our main app, so that as people style outfits and pull together pieces from different parts of outfits from different boards, putting those together into an outfit and then making it so that others can shop each of those individual elements or even see other collages and how other people may have styled those things, which, again, really just gets more into the joyful part of shopping, the inspirational part of shopping, which really hasn't been solved in the digital world up to this point. But we think we've got a really great shot at solving that.

BRIAN SOZZI: What inning are you in, in making Pinterest that go-to shopping destination?

BILL READY: So it's interesting. The great thing about Pinterest is that more than half the people on Pinterest are there to shop already. So in a lot of ways, Pinterest solved digital window shopping, but all the stores were closed. You couldn't really easily take action. What we're doing now is making it so that all those stores are open.

So we're making it so that all those things you find on Pinterest, you can easily connect to all the great places to go buy those. We're still relatively early in that, but as we've been bringing that in, we're seeing this really resonating with users. We talked about on our last earnings call, our shopping ads grew 50% plus year on year. Our mobile deep linking in shopping, which is what connects the user to a seamless checkout in the retailer's app, that's now 40% of our shopping revenue.

So as we're bringing these features into the app that make it so that people can easily take action on what they find in Pinterest, we're seeing that users really like it and advertisers are getting a lot of great benefits out of it.

BRIAN SOZZI: There's a lot of talk, and you could feel it in the air here about AI. The sponsors are here for AI. Everything is just AI, and AI is having a moment. How does AI play into your future?

BILL READY: Yeah, so we have a great foundation in AI. Our computer vision is what people would know Pinterest for, really. Now, as a consumer, the way you would experience that is when you come to Pinterest to walk that digital bazaar, the recommendations, the visual experience of finding all the things that you're interested in through a great visual, whether a visual search or whether it's visual discovery, that's powered by really fantastic AI and computer vision.

The interesting thing for us is that I think a lot of this discussion about AI has missed how important it is what signal the AI is acting upon. The AI is only as good as a signal that it acts upon. And for Pinterest, we have hundreds of millions of pinners that come to Pinterest every day and curate what a great outfit looks like, what a great room design looks like in a certain aesthetic. And we're able to have our AI act upon billions of interactions from pinners that make these product associations, which is very different than what you'd find on any other social media platform, or really, any other shopping platform.

BRIAN SOZZI: How do you view AI as someone who's been in the tech industry for a long time, how do you see that evolving or the job market? How do you see it evolving the retail industry? Because I go back and think through a recent op-ed by Bill Gates, Microsoft founder-- it was about a week ago-- talking about super human intelligent AI. And it was a little scary, but how do you see it?

BILL READY: Well, I mean, AI is definitely advancing quite rapidly and has been for some time. I think as we see this next generation of AI, it is really powerful. And so I think one of the most important questions out there is, what are people going to ask the AI to do?

And are people asking the AI to do things that are positive and helpful, things that are additive, which is where we're focused, is, making sure that we're making really helpful recommendations for people that help them build a life they love and connect that digital experience into their real world experience, whether it's putting together a great room, making a great meal for their family, putting together an outfit that's going to help them walk a little taller. These are all things that connect in their daily life.

And so I think this question of what do you use the AI to do is going to be really important. And with us, we're making sure that it's additive to people's lives, not addictive, which I think has been one of the criticisms of some of what has happened with AI and social media over the last many years, is that in a lot of ways, it was becoming more and more addictive, connecting you to things that make you engage for longer, but may not make you feel better after you engage with it.

And us, we're really focused on how we lead to more positive well-being outcomes. And we've had some recent research that we've released that actually demonstrates we're able to have that kind of impact, that we're actually able to make it so that when you engage on Pinterest, you feel more positive. You feel better after having spent that time on Pinterest.

BRIAN SOZZI: Well, speaking of addictive and since we last spoke, TikTok has been on Capitol Hill, really getting criticized for its business model. If TikTok was not in the US, what does that mean for Pinterest?

BILL READY: So, you know, I can't comment on any one specific platform. I think with social media broadly, this question of how do you make sure that it's additive and not addictive, how do you make sure that people feel better after having spent time with it, is really important. And we think that's our role to play because there's been lots of research that has shown that as people spend more and more time on social media, they have rising rates of anxiety, rising rates of depression. People feel worse after having spent time there.

And that very same research consistently shows that after spending time on Pinterest, people feel better after time on Pinterest. That's not an accident. That's intentional. We're tuning the AI, tuning our platform, to be a positive place for people to be inspired to discover and intentionally saying, we want it to be a place where people can build a life they love and feel more positive. And again, I think it's going to be a really important question for social media, broadly.

BRIAN SOZZI: Is it an uptick to your business, though? Would you see-- how should an investor think about it? Is it do you see a user uptake if they don't exist?

BILL READY: Well, I think we're doing something completely different in social media than anybody else. The thing that is completely different about Pinterest versus the rest of social media is that the user's there with an intent and a purpose. With so much of the rest of social media, users are in a lean back entertainment mode. And the reason that shopping works so well on Pinterest is that people on Pinterest are there with a purpose. They're in a lean forward, intent mode. And so that is completely different than the rest of social media.

And the reason that shopping works there is because as you interject with something-- if somebody is on a platform to watch a funny dance video or look at pictures of their friends, and you try to interject something shoppable in that, that's sort of taking the user away from what it was they were trying to do, which I think is how much of social media would function. With Pinterest, these are-- more than half of our users are on Pinterest to shop. And so when we give them great shopping features, great things to engage with, we're seeing that they really like that, that they really engage with it.

But again, that's because our platform is fundamentally different than the rest of social media and that users come to Pinterest with intent and purpose. Whether it's shopping, redesigning a room, putting together a great meal, they're there with intent and purpose, rather than just for lean back entertainment, which is what most of the rest of social media has historically been.

BRIAN SOZZI: Strange time in the economy-- banking crisis, it's been a weird few weeks. How has that impacted the ad market?

BILL READY: You know, I think the broader market has been going through a lot of change for some time now. And this is more of that. The thing that we have seen is that as we've been able to give advertisers more measurability of performance on our platform, connecting more of the users' intent on our platform to actionability, and making it so that advertisers can easily connect there, we're seeing that that's delivering really great performance for advertisers.

So even in a shifting market, people are still advertising. And we think we can differentiate more and more through the high intent on our platform and through increasing the users' ability to take action on our platform, which then is not just great for the user, because they're getting more of what they love, more of what they want to buy, but also great for advertisers, too, and creating really good returns for them.

BRIAN SOZZI: Has the ad winter thawed?

BILL READY: You know, I think it continues to be choppy out there. But I think-- I've talked about this in our last couple of earnings calls. In each of our last couple of earnings calls, I talked about how even in a choppy market, we can still go take share. And I think that's what you've seen in each of our last two quarters, was that we grew faster than the broader market.

So we're in a quiet period now. I have no comments about this quarter. But in each of our last two quarters, I've talked about how if we can do more to show great measurability drive performance for advertisers, as a 1% player in the market, there's still opportunity for us to grow, even if that broader market may continue to be choppy.

BRIAN SOZZI: And you've seen, really, Wall Street, I would say, come out this year in support of Pinterest and Bill Ready. They like Bill Ready, but ultimately, to unlock value in Pinterest, Bill and his team have to figure out how do you make this platform shoppable in that go-to destination. It sounds like he's working on it. Results to be determined.

DAVE BRIGGS: Yeah, it's really nice to hear him talk about, Sozz, the emphasis on positivity. It's almost like the Ted Lasso of social media platforms. When you're talking to all these CEOs out there, how do you characterize the mood? Given the banking crisis and the tenuous time we're in, are they bullish about what lies forward, or are they kind of in cutback mode?

BRIAN SOZZI: Well, on the positive note, not hearing really any CEO, COO, CFO, even the stock analysts that I've talked to here, really sound the major alarm bell, despite this rolling bank crisis. And I think it's fair we can call it a crisis. We're not-- I'm just not hearing that sales are falling off a cliff. I'm not hearing that consumers are now out there in retail stores massively trading down.

Now, what I would watch, if you are an investor in the retail space, is promotional activity. Some of the analysts that I have talked to here on the ground saying promotional activity has started to pick up ahead of the key spring buying season. Why do promotions pick up? Because some of the store traffic may have started to tick down, not only in stores, but also online. Something to watch because with more promotions comes just weaker profit margins.

DAVE BRIGGS: All right, Sozz, blackjack, craps, slots-- what are you going to do?

BRIAN SOZZI: I'm actually going to go back to my hotel room and write two stories. That's how I roll. I'm leaving slots [INAUDIBLE].

SEANA SMITH: Look at that. That's dedication.

BRIAN SOZZI: We've got to produce stuff here at Yahoo Finance.

DAVE BRIGGS: The wildness.

BRIAN SOZZI: I'm here to produce and drive high ROI. High ROI.

SEANA SMITH: There you go. And there we go.