Two years ago, Amazon (NASDAQ: AMZN) launched Spark, a social shopping app aimed at challenging Facebook's (NASDAQ: FB) Instagram and Pinterest (NYSE: PINS) in the social shopping space. Spark mimicked Instagram's feed of single photos and required new users to select at least five interests to display personalized recommendations like Pinterest.
However, Spark never caught on, and Amazon recently killed off the website and app. Amazon now redirects visitors to its new #FoundItOnAmazon site -- which resembles Interesting Finds, the Pinterest-like board it launched in 2016.
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Amazon will reportedly continue operating Interesting Finds and #FoundItOnAmazon separately, with the former focusing on a wide range of items and the latter displaying fashion products and home decor. Let's look at why Spark failed -- and whether or not Amazon is getting left behind in the "social shopping" market.
Why did Amazon pull the plug?
Amazon couldn't leverage its massive e-commerce presence to expand into the social networking market because it was already split between market leaders in 2017. Social network users stuck to the platforms that their friends and family used, so very few people were willing to give Spark a try.
TechCrunch claims that only about 10,000 Amazon users tried Spark in its first 24 hours, and those numbers probably didn't improve significantly throughout the app's short life. Amazon also shot itself in the foot by restricting posts and comments to Prime members. Non-Prime members could only passively browse the feed.
Earlier this year, Amazon customer engagement chief Chee Chew, Spark's biggest backer, resigned to work for Twilio. Chew's departure likely convinced the company to abandon Spark and remove its integrated features from Amazon's core app.
Amazon also likely realized that Spark didn't stand a chance against Instagram and Pinterest in the social shopping space. Instagram, which has over a billion monthly active users (MAUs) launched shoppable posts, a dedicated shopping channel, and in-app checkouts over the past year. Facebook also started testing out live shopping videos on Live.
Meanwhile, Pinterest went public in April and was ranked the top social network for U.S. product searches in a Cowen & Co. survey earlier this year. 48% of respondents stated that they used Pinterest to find and shop for products, versus just 10% for Instagram, 14% for Facebook, 7% for Twitter, and 4% for Snap's (NYSE: SNAP) Snapchat.
That's why major retailers like IKEA have uploaded their entire catalogs to Pinterest's platform, and why companies like Target are integrating their online catalogs into Pinterest Lens -- which visually searches for pinned products via camera shots. Pinterest only had 291 million MAUs last quarter, but it's growing at a faster clip than its larger rivals.
Amazon still has irons in the social shopping fire
The death of Spark was a setback for Amazon, but it has other irons in the fire. It partnered with Snap last year to let Snapchat users search for products on Amazon by taking pictures, it launched live shopping videos for sellers, and it might eventually bundle Interesting Finds and #FoundItOnAmazon into a new pinboard platform to challenge Pinterest.
Amazon also shouldn't worry about social networks overtaking it in product searches anytime soon. According to an AdeptMind survey last year, 46.7% of U.S. shoppers started product searches on Amazon, compared to just 34.6% on Alphabet's Google.
E-commerce features help social networks expand their ecosystems, but those features won't necessarily lure shoppers away from dedicated e-tailers like Amazon. Still, I doubt Amazon is giving up on social shopping, and we'll likely see other attempts to crack the nascent market in the near future.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon and Facebook. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.