The past 2 years have been a turbulent time for Pinterest. After a surge in active users during the pandemic, restrictions started to ease and the platform took a serious knock with a decline in overall users of 24 million.
The company has recently shared its latest performance update, and it doesn’t look good.
The Has-Been Replacement for IRL Browsing
During the stricter lockdown period, Pinterest gained in excess of 100 million active users; touting itself as a ‘virtual shopping mall’ of sorts. This concept worked well, for a while, as it deemed the perfect replacement for IRL (In Real Life) browsing.
As people were confined to their homes and unable to visit shopping malls, the need for a temporary replacement arose. And that’s where Pinterest came into the equation; the platform saw major growth with compounding additions of users as time went by. This was all good and well, until shopping malls started to open up again.
As Pinterest says:
“As lockdowns eased, people have embraced life outside their homes, a trend that caused a dramatic decline of our year-over-year growth rate of monthly active users (MAUs) in Q2 and Q3, as consumer preferences shifted away from our core at-home use cases.”
Should Pinterest Be Measured on Growth?
Although the platform’s rapid loss of users will be the main storyline of Pinterest’s Q2 report, there is evidence that the platform should not be measured on growth in the same vein as other social networks.
The premise behind this is that Pinterest has greater opportunity to generate revenue from shopping activity vs. relying on broader exposure to ads. The platform focuses on incentivizing direct action with each Pin instead of casting the widest net possible. This is not to say that Pinterest does not generate revenue from advertising.
A More Valuable Approach Than Some Other Social Apps
Pinterest has a dedicated focus on shopping instead of social engagement. This, in itself, could provide more opportunities for the platform to maximise the users it does have (even if it does have fewer); it could potentially drive stronger responses for advertisers through its far more refined focus.
While the platform’s numbers have taken a dive, Pinterest’s overall user count has seen a large jump over the past year. All businesses are operating in unchartered territory, so it isn’t easy to project what these jumps and shifts mean going forward.
With Pinterest introducing its shopping tools to more regions, we expect the platform’s opportunities to continue to grow. Despite the dismal news in decreased user base, Pinterest’s ongoing innovation and development is something to keep an eye on.
