Potential of Social Shopping – Essential Trends and Opportunities

Chicago, 2010: Dan is thinking about buying a decent home theater system correspond the new LED TV they purchased. Dan doesn’t know much about home cinema systems so he logs on Bestbuy.com where he has setup his online “Media Closet” which tracks all the gadgets and electronic devices he currently owns.

Dan is able to find 18 “Audio Gurus” who also have an expertise on the products that are currently in his media closet. These gurus have been voted as the experts by the online community so Dan thinks that he can trust their recommendations. Dan invites one of the experts to view his “Online Media Closet” – which shows the information about the Blu Ray player, LED TV, a Netflix streaming device and a WII console that he would like to connect to the home theater system. The expert makes recommendation for two high end home theater systems that are currently on sale. Dan purchases one of the home theater systems and the Audio Guru receives affiliate points from Bestbuy for his help in the consultative selling.

New York, 2010: It can be 11: 30pm and Sally is thinking about buying a new dress for your upcoming Christmas party. She logs on Looklet.com, picks up a dress and matching shoes and saves the new look in her profile. She gets prompted by Looklet if she would like to get an opinion from her friends. Looklet displays all her online Facebook friends via Facebook connect . Sally sees that her best friends Nancy and Tina are still online and invites them to give an opinion on the new look. They are able to chat and view the products in real time. Both Nancy and Tina love the new dress but aren’t too crazy about the new shoes. Sally is able to find other “Fashion Experts” on Looklet who have favorited the same dress – and she is able to find better shoes based upon recommendations from those experts. Welcome to a new phenomenon in online retailing – “Social Shopping”. This term has been used more and more in the past few months to describe the future of online shopping. Although the above two examples are not yet real but several pieces of these concepts are already in action at several online retailers. Given all this hype around social shopping, I thought it would be good to talk about some of the practical examples where online retailers can start thinking about implementing some of these concepts on their platforms.

The Progression of Cultural Web

If we think regarding the progression of social web, they have significantly evolved over last number of years. It started out “Relationship based” where people could just talk with others and stay in effect. Then it evolved into an open medium the place that the social platforms took the role associated with an operating system allowing third party applications permit significantly richer social interactions amid people. Now, it has evolved a little more forward where all interactions are wording based (think Facebook Reports Feed) where users merely see information and conversations inside context they are interested throughout. The next logical step within this evolution is to allow sharing of services within the social context to ensure users can turn to his or her friends and trusted experts for suggestions about buying products. For those who think social shopping is definitely a fad, consider this-What makes a terrific product recommendation? Is it the quantity of strangers who recommend something or is it the one who recommends it that matters nearly all? In other words, if you are asked for you to chose between a book on Amazon that may be rated 5 stars by 10 strangers and another book strongly recommended by a close friend who may have very similar tastes and background because you – which book are you very likely to buy? If the answer can be latter, then you believe inside power of social shopping. One and only thing needed is a platform which assists you to listen to your trusted friend’s and follower’s recommendations in a very structured format. Facebook Connect is the first task that would make these interactions possible in a very meaningful way. Still not certain? Let’s hear what our pals from Nielson say –

“Recommendations by personal acquaintances along with opinions posted by consumers online include the most trusted forms of promoting globally, according to the most up-to-date twice yearly Nielsen Global On-line Consumer Survey. The Nielsen review, the largest of its variety, shows that nine in every single ten Internet consumers worldwide (three months percent) trust recommendations via people they know, while seven divorce lawyers atlanta ten (70 percent) have confidence in consumer opinions posted online” FINE – enough about general concepts and numbers. Let’s look at specific opportunities that will certainly shape up the social shopping landscape inside coming months and years:

Essential Opportunities in Social Shopping

Prospect 1: Product Discovery (Help me discover a good product)

This is where almost all of the action is today. If you approach most of the social shopping sites today including Kaboodle or Stylehive, they allow users to visit other experts and discover new releases every day.

The key tools to generate this concept are following:

Product Experts – There should be a notion of unbiased product experts who may have authority in various categories. These experts have capacity to share products that others will find. The key aspect is that these experts should be recruited by the online community using some form of unbiased reputation/ point system. This brings about my second point.
Reputation Management – Experts earn reputation based upon the standard of their contributions to the network. This needs to follow a new democratic process where users vote for expert’s contribution and considering pre-determined eligibility criteria, certain users can easily earn an “Expert” or “Guru” reputation in specific categories.
Online Profile – Capacity to know about the tastes, preferences and the products currently owned by somebody would allow platforms to better connect individuals collectively based upon their common hobbies. I think this is an essential step in a successful social shopping platform given it would make all shopping similar interactions context sensitive. Imagine logging into Facebook along with seeing News feeds from all Facebook users as well! Facebook has allowed users for you to customize the context around their unique friends – similarly the social shopping sites should let the users to customize the wording around other “experts” and folks who have common tastes.
Opportunity only two: Product Selection (Help me pick relating to the products that I like)
This can be a next step of the invest in process. Once the user has discovered a number of products, they need to select which one could be the best match for them. Unique a dress or a footwear for women or a gift for a new co-worker, a lot of times people check out their trusted advisors or friends to decide on a product. Technology has now evolved in ways that social shopping platforms can currently enable these interactions. Following include the key components that will work as the technology foundation of this specific aspect:

Facebook Connect – Inside my mind, in the short record of social shopping, Facebook connect is the most powerful development that will aid take the concept of cultural shopping to mainstream. For people who find themselves not aware what Facebook join is, it is a powerful list of APIs for developers that let us users bring their identity along with connections everywhere
So what’s your big deal? Well, this would allow users to take their friends as well as them for shopping. Shopping on-line, that is. With Facebook join, the shopping platforms now are capable to allow interactions across the 300 million users who will be currently on Facebook. I incorporate some examples later that illustrate your practical implementations of Facebook connect in a very social shopping context.
2. Yahoo and google Wave

For those who don’t determine what Google Wave is – it is just a fairly recent technology development and that is expected to change the means we communicate and collaborate using others.

Now you might think until this looks slick for email communication but what does the unit use to do with shopping. Well – since the API is open pertaining to developers, the opportunities are unlimited. For example – an Backyard apparel retailer could allow customers to connect collectively via Google Wave and talk about their pictures of favorite Snowboard Vacations, showcasing all the products purchased with the online retailer. The opportunities are endless – the real key thing is that Google Wave is often a revolutionary product that opens up new technique of communication and collaboration which may be easily applied to social shopping to plug individuals with common tastes along with interests.

So what are many of the retailers doing in the venture and product selection space? Here are several real life examples where the very idea of social shopping is already advancing to a higher level:

1. My Zappos: Users can easily add items to their storage room, and can then invite their friends from Facebook to help select the ideal product. After registering, you could get introduced to groups with equivalent interests, such as Zappos The game of golf, Zappos Beauty, etc. Consumers can establish shopping lists of items they really want, have or like. Friends can say to them what they think and/or suggest new “stuff” for the children. In the past when anyone shopped online, it was a new lonely experience. With My. Zappos, consumers can shop together and still have their “best friends” give these people feedback.

2. Jansport has done something similar where prospective customers invite friends from Facebook (using Facebook Connect) to buy with them; then share comments and ratings conveniently-without a should leave Jansport.com. Shoppers are able to converse freely with those whose opinions matter the most: their friends and family. Purchase validation can be achieved without interruption.

3. Apparel retailer Charlotte Russe has implemented a “Shop Together” strategy. Users can invite their friends to simultaneously shop the most up-to-date styles. Friends can view, assess, chat about and create a “favorites’ report on items together. This allows online customers to express synchronized shopping sessions with friends.

4. Vans.com has taken the concept of social shopping to customizable products. Shoppers can now invite friends to help design their customized sneakers. The collaborative-shopping technology allows consumers building custom shoes online to chat with friends in real time about the product design. Click on a link saying, “Invite friends to design with you,” and access friends through AIM, e-mail or any other service a link can be sent through.

Assuming the friend is usually at a computer, she can join a chat for the Vans site to give a new thumbs up or down for the design, as well as make her very own suggestions.

Opportunity 3: From Online marketing to Social Marketing

The thought of Affiliate marketing has been quite successful for trusted online stores to drive sales to his or her portals. I think affiliate marketing will still be one of the important promoting channels – but we must not underestimate the potential of Referral marketing that is possible at social platforms including Facebook and Twitter. Out involving 300 million users on Zynga, approximately half of them signing in to their account every day – as outlined by Facebook more than 6 billion minutes are invested in Facebook everyday. If these users can easily recommend products to their pals, resulting in a sale in an online retailer, this opens up a whole new marketing opportunity – some people call this social online marketing. If the retailers are able determine an incentive structure to reward folks who share products with their friends that eventually bring about a sale, the opportunities are generally limitless. Keep in mind you will find there’s fine ethical line between expressing “authentic recommendations” with friends, as opposed to. paying individuals to become cultural advertisers. In addition, FTC has issued guidelines (albeit vague) that might require users to disclose the association which has a retailer if they are getting purchased driving sales. As marketers carry on and over-do influencer outreach – looking to capture the attention of influencers similar to mom bloggers and food bloggers in ways that they authentically talk about products – you can expect to see some simpler plus much more direct solutions to transparently engage those influencers as affiliates.

The benefit back to them is often a percentage of sales – most very transparent, of course. A similar concept could be applied for you to users on Facebook and Facebook. However, the incentives don’t always should be monetary – they could also mean earning a greater status/ reputation on the retailer’s on-line platform.

Although the scope of social shopping is reasonably small today, the opportunities are generally significant. The opportunities are even greater for multi-channel retailers such while Target, Walmart and Sears in engaging the customers can use at stores and helping them talk with their online friends who can “virtually” shop with these in the store. I still find it time to start thinking about retailing inside context of people vs. solutions. At the end of the morning, it is the social friendships and conversations that help travel a purchase decision. Therefore, the online retailers need to get started on thinking about opening up their platforms to allow for people to have most of these two way interactions vs. centering on one-way merchandising aspects of retailing.

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