Forecasts from a top Wall Street analyst suggest visual search will make a major impact in the way ecommerce companies build out their future services.
Aaron Kessler, Raymond James analyst, in a research report released Wednesday wrote how companies like Alibaba, Amazon, eBay, Facebook, Google, Houzz, Pinterest, and Wayfair continue to move toward offering visual search for ecommerce.
Kessler calls out Pinterest as “a clear early winner in visual search,” and forecasts that the company will generate more than $700 million in revenue this year. The site supports about 250 million users who conduct on average three visual searches per day in top categories like beauty, fashion, home, art, and food.
About 21% of Pinterest users in a Raymond James study said they use traditional search less when they have an option to use visual search.
While Google has benefited from the shift to visual search for product listing ads in its Shopping platform, it also has the most to lose as visual search grows in popularity, according to Kessler.
Magna Global estimates the global search market at $113 billion in 2018, so even if visual search could achieve between 5% and 10% of market share long term, he wrote, this would become a significant amount of ad dollars.
In the third quarter of 2018, Google Shopping Ads generated 87% of Google search ad clicks for retailers, according to ad agency Merkle, which estimates Shopping ads grew 33% compared with 3% for text ads
While home goods and apparel are two categories that seem to go well with visual search, Kessler believes visual search has applications outside these categories such as travel and real estate. He points to HomLuv.com as the first virtual search and discovery platform for new home buyers. It works by having users select photos they like and matching them with a new home builder.
Perhaps that why the report sites eMarketer numbers estimating 72% of U.S. Internet users regularly or always search for visual content before making a purchase.
Kessler also expects Amazon to release more visual features similar to Amazon Scout and Style Assistant. “We continue to view Amazon as the key beneficiary of U.S. eCommerce with Amazon capturing ~50% of incremental online sales,” he wrote.