Let's go 'social shopping'
- 7 July 2011
- From the section Technology
Offline retailers have long held that online shopping will never replace a visit to the shops because sitting at a computer clicking on links is just not as much fun as hanging out at the mall.
But a quick glimpse at any high street with its rows of closed-down signs, pound shops and charity outlets suggest that consumers don't entirely agree.
Now a new phenomenon - dubbed social shopping - threatens to incorporate the missing social element in online shopping and possibly destroy even more bricks and mortar stores.
Social shopping encompasses a range of ideas, from shopping within social networks, to shopping-specific search engines that use friends recommendations to group buying sites such as Groupon.
Groupon harnesses the power of the crowd to bring people daily deals that they may not even have known they wanted - from manicures to mountain biking.
It has a very simple business model - people sign up for offers and once the required number of people are registered, the deal is confirmed and a voucher is sent to your inbox.
The firm has five million users in the UK alone, and is said to be the fastest growing company ever.
It puts much of its growth down to web-based recommendations - people see a deal and spread it among their online friends but not everyone is convinced by its social credentials.
"There are a lot of myths about how social Groupon is. In the beginning many deals may have been spread via social networks but now it is primarily through a daily e-+mail," said Forrester analyst Sucharita Mulpuru, who has recently authored a report on social shopping.
Word-of-mouth may have helped catapult Groupon into the limelight but its quarter of a billion dollar marketing spend probably played an even bigger role, thinks Ms Mulpuru.
As the world's largest social network Facebook is keen that people talk to retailers as well as their friends and it is trying to figure out how to make the most out of social shopping.
It boasts that half of the top 25 retailers use the site but the level of integration varies, from those who simply see it as a way to gain fans to "like" their brands to firms, such as clothing firm Asos, which are happy to allow users to make purchases from within the social network.
Asos is one of Facebook's biggest successes. It puts its full catalogue on the site and its fan page has 800,000 members.
Amazon uses the social network to offer product suggestions based on likes and favourites pulled from users' profile information.
It has also introduced gift recommendations which let you know which of your friends have upcoming birthdays and suggests presents for them based on what they have shared with Amazon.
Ticketing firm TicketMaster offers anyone who has bought a ticket on its site the chance to share the purchase information with their Facebook friends. It claims to have increased its revenue as a result of this feature.
Meanwhile Levi's has what Facebook describes as a "social store front", offering users jeans that their friends may have liked and even using information to influence its supply chain. So if people in London are "liking" the skinny jeans most and people in Manchester are "liking" the bootcut style they can simply adjust their stock to match this.
And herein, for Ms Mulpuru, lies the real power of social shopping - as a tool for retailers.
"There is a ton of data that people share about themselves that the retailer can use to make more relevant offers. It is far more a personalisation tactic than about getting or retaining customers," she said.
Facebook's director of business development Christian Hernandez believes that Facebook can help users "connect to brands that they care about" and he reckons that among his Facebook friends there is plenty of chatter about shopping.
But Ms Mulpuru is not convinced it will become a shopping hub any time soon.
"TV didn't transform retail and neither will Facebook. At the end of the day no-one buys something as the result of a link. The truth is that large brands just have not experienced any sizable gains in direct sales from Facebook," she said.
"In spite of hundreds of thousands of developers having been given the opportunity to create useful shopping applications or to integrate commerce into Facebook, there has yet to be a blockbuster success," she added.
It hasn't stopped a raft of companies betting that social and shopping is a powerful combination.
Three former Yahoo executives have set up a dedicated social network aimed entirely at shoppers.
Dubbed ChoozOn , the start-up is built entirely around shopping and personalised deals. It allows users to manage their various deals and discount services and upcoming apps for the iPhone and Android handsets will highlight nearby deals.
Users can sign up for loyalty programmes and if they share their shopping preferences and the brands and retailers they like best, the shops will fashion specific discounts for them.
Meanwhile UK start-up Shopow (Shopper Power) offers a shopping search engine that aggregates thousands of retailers and products across all areas of consumer goods. Like other price comparison sites it allow users to compare goods by criteria such as price, retailer, service and delivery, but it also integrates various social functions.
It will display reviews and deals that have already been collected around a product, as well as drawing in more personal views.
"Shopow is somewhere where you can interact with friends but also rate your recent purchases," explained co-founder Kevin Flood.
He thinks people are far more likely offer to useful feedback via such a site than on Facebook.
"While some deals are appropriate to share on Facebook, you wouldn't share your experiences with a dishwasher on there," he said.
The ability of retailers to engage directly with consumers is a very powerful one and some have taken bold steps in this direction.
In February, US fashion designer Derek Lam harnessed the power of the web when he asked eBayers to vote on which of 16 dresses should form his summer collection. More than 120,000 people voted and the five winners went on sale in May.
Not wanting to be left out, the high street too is embracing social media.
In March, London's largest shopping centre Westfield unveiled a tweet mirror that allowed shoppers to try on an outfit and share the image in real time with friends and followers on Twitter.
The mirror, brainchild of Dutch firm Nedap Retail, is already installed in dozens of shops in Belgium, France, Germany and Switzerland.
How many shoppers want to invite their online friends into the changing room is unclear but it offers a small glimpse of what offline retailers will have to do if it wants to persuade consumers away from their screens and back to the mall.