Like Shopping? Social Networking? Try Social Shopping
FOR most small businesses, competing on the Web is hardly easier than competing offline, where gigantic retailers with huge marketing budgets dominate. But for Amenity Home, a start-up in Los Angeles with three products, four employees and no marketing budget, getting noticed was a simple matter of word-of-mouth advertising, albeit in an unusual way.
Late last month, an online shopper posted a photo of one of Amenity Home’s $400 duvet covers on ThisNext.com, one of a new breed of Web sites that promises to connect independent-minded shoppers with hard-to-find products. Other shoppers copied the photo to their own blog pages, bringing the company some much-welcome attention, said Kristina de Corpo, an Amenity Home founder.
“We’re a young business furiously trying to keep our heads above water, so this is really exciting,” she said. “We’ve gotten tons of hits from it.”
Sites like ThisNext and a handful of services like Kaboodle.com, Wists.com and StyleHive.com are spearheading a new category of e-commerce called “social shopping,” that tries to combine two favorite online activities: shopping and social networking. These sites are hoping to ride the MySpace wave by gathering people in one place to swap shopping ideas. And like MySpace, the sites are designed for both browsing and blogging, with some shopping-related technology twists included.
Social shopping is just the latest solution to a chronic problem for online retailers and shoppers: many shoppers aren’t sure what to buy, but they know they won’t find it on the sites of mainstream retailers like Macy’s, Amazon or Wal-Mart.
Online retailers often refer to this as the “product discovery” problem, but it might better be referred to as online retailing’s Teflon piñata, so many times have entrepreneurs tried to crack it.
“Online shopping is more accurately described as purchasing, because it’s so directed and goal-specific,” said Gordon Gould, ThisNext’s chief executive. “You might be looking for a plasma screen TV, but there’s not a lot of lateral thinking about what else you might be interested in. We want to show people other products that wouldn’t make sense for an e-tailer to batch together.”
•Users who register with social shopping services typically create their own pages to collect information on items they find. But instead of simply describing what they have found on other sites and posting a Web address, they can download a piece of software that allows them to grab images of those products to post on their own shopping lists.
The social shopping services can then post pictures of items that have been viewed or circulated widely among visitors who have searched the site for, say, home furnishing ideas.
The social shopping sites hope to parlay that enthusiasm into advertising revenue, once they attract enough visitors to go back to merchants with a better sales pitch. Some sites, like ThisNext, also plan to form so-called affiliate relationships with merchants, who often pay percent commissions on sales that come as a result of their products being featured on other sites.
ThisNext also gives users the ability to transfer pictures or videos of their favorite products from the site to their personal blog pages. Mr. Gould said the site could also eventually make money by helping companies find influential customers that they might involve in early-stage marketing plans or product testing, among other things.
“If you’re the go-to guy for buying Kona coffee, I want to find you, not a generalist,” he said.
Kaboodle, meanwhile, has created another revenue source by striking a deal late last month with eBay’s comparison shopping service, Shopping.com. Under that agreement, whenever a Kaboodle user features a product that also appears on the Shopping.com database, Kaboodle will post the prices at which the product is sold online at various merchants. Should a reader click through to the merchant’s site, Kaboodle will earn a share of the fee the merchant pays Shopping.com for that click.
Kaboodle has also worked with eBay to create pages for collectors of certain items on Kaboodle, wherein they can receive feeds of eBay auctions that are relevant to their collections.
The site, which has about 50,000 registered users, has so far raised $3.55 million from well-known Silicon Valley investors, like Guy Kawasaki and Shea Ventures, according to Manish Chandra, Kaboodle’s chief executive.
Last week Kaboodle introduced a set of new features, including one that allows users to run a slideshow of the products on their list, and then transport that slideshow to their own blog pages. (That could account for the late-summer popularity of a collection of string bikinis featured on Kaboodle’s home page last week.)
According to Rob Goldman, who leads the American division of Shopping.com, Kaboodle and its cohort have potential.
“Who knows? This may be the only way you shop for clothes in the future, by seeing what your friends and other people are wearing,” he said. “But in the scheme of the way commerce is conducted online right now, I’d see these more as venture investments, and less as line extensions.”
Patti Freeman Evans, an analyst with Jupiter Research, an online consultant, agreed. The increasing popularity of customer reviews on retailer sites and elsewhere, she said, “will help get customers a little more engaged, and thinking about recommendations from other people, which is what ThisNext and these other sites are based on.”
One hurdle, Ms. Evans said, is getting users to go through the trouble of downloading software so they can grab images of products they like, assuming they are motivated enough to post favorite products to begin with.
Ms. Evans said that social shopping sites would also have to be vigilant against featuring stale products — a particularly vexing issue for fashion merchandise — because retailers typically carry such products for about 12 weeks.
But instant popularity for such sites is not assured. “I think this will have a nice developing trajectory, rather than something that’ll explode tomorrow,” Ms. Evans said. “Customers are so used to going to the store to discover new products that it’ll take a long time to get them out of that.”
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