Social Shopping: the current big thing?
Categories: Web 2.0
Tags: bebo, dealbundle, e-business, e-commerce, kaboodle, myspace, picklist, social_commerce, social_networks, social_shopping, stylehive, thisnext, web2.0, whatsbuzzing, yahoo, zlio
Social Shopping means leveraging social networking platforms to help costumers finding and buying products online.
Why wasting your precious limited time to scroll infinite lists of useless articles why your brother, your mom or your friends could improve your experience through their suggestions?
In other words, the idea is using friends and acquaintances to generate buzz and recommendations that can be used to efficiently identify the objects that better suit your needs and tastes.
Actually this approach works fine because the people you love, your colleagues, your neighbors, all have something in common with you and their tastes are probably quite related to yours. They could go to the same supermarket or shop, cook similar recipes, etc.
What about the web? The web is not only a structureless set of people and pages. Humans naturally tends to connect and even online their relationships crystallize into huge numbers of weakly connected small groups (the strength of weak ties from Mark Granovetter). These groups share the same interests, similar ideas and behaviors. Of course nothing prevents you from being both into a football club and a group for the environment safeguard, but anyway the people you meet in each one of these sets have something in common with you.
Social shopping sites represent the next level in social networking, verticalizing and using your ties for a very specific task: buying products online (through filtered recommendations coming from your friends’ circle).
So it’s not surprising how in November a survey by the American Marketing Association reported how 47% of consumers in traditional social networking sites (MySpace, Facebook, etc) said they would love to search out gift ideas and 29% said they would buy products inside their networks.
Word-of-mouth-marketing could be an incredibly powerful trust factor on these platforms completely disrupting their current revenue models. While advertising on social-networking sites is now about $350 million a year, revenue from sales could amount to billions of dollars, complementing or overtaking ad revenues (from USA Today)
So how to integrate e-commerce with something like MySpace? You can quickly find out a bunch of different examples.
Amazon and Epinions with their user reviews can be well considered the pioneers of social commerce. The model here is centralized with people coming to the same place to add their categorized suggestions to help others doing their deals.
Another way to go is illustrated by Mixi, the biggest social network in Japan. Basic MySpace-like features are enriched by product recommendations and iTunes integration: users can use Mixi pages to rate and review a number of items (CDs, DVDs, books, etc) directly linked to an Amazon Japan page and, thanks to a ‘Mixi Station’ client, others users can look in real time at your listening tastes and buy these tracks from iTunes.
Yes, Myspace music , Bebo bands and YouTube music are other attempts to systematically propose music and video contents inside social networks, but they lack a real revenue model or they are still only declarations for future functionalities.
Following a long tail approach, I feel that the explosion of social shopping will come more through a decentralized way of going, with smaller sites and even single bloggers putting their posts at the service of e-commerce hubs.
Picklist put it in three simple steps:
- Make a list of products that you’d recommend to others (a picklist)
- Broadcast your list by adding a widget to websites, blogs and social networks
- When someone purchases an item from your list, you get the commission
Widgets can be quite powerful to drive the mass down along the tail and a bunch of other startups seem to know that. Goodstorm too proposes widgets for its MeCommerce service. People can buy products from a sidebar without even going to a shopping site and revenues get shared (50-50) between the site publishing the widget and company selling the product. Nabbr, and Favorite Thingz are other examples.
Again a niche powered but slightly different direction is taken by sites like StyleHive, Wists, Kaboodle, ThisNext , DealBundle , WhatsBuzzing, Zlio (this one is in France), CrowdStorm where shopping is specifically mixed with social bookmarking practices: surf the web, find an item you like and grab its image and description through a bookmarklet.
As you can tell by yourself, this space is very crowded. A few obvious questions are:
- Which one of them will be a winner? (If any)
- Will users really decide to participate to these networks?
- Which kind of motivation would participants have (revenues here are very small)
By the way, these last examples show an important and strong trend: users want cash back for their content and participation. More on this very soon.
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