As product review websites gain popularity among discerning consumers, more specialized sites which marry social networking with shopping are popping up on the Internet.
Such websites as kaboodle.com, yelp.com and boutiques.com are capitalizing on the popularity of social networking as a way to create online communities based on customer testimonials.
Steve Chien, chief marketing officer at kaboodle.com, said there are many different types of definitions of social shopping.
“It’s kind of combining the social features of sites like Facebook with discussions about products, fashion trends and shopping,” Chien said. “It’s about making purchases that are essentially influenced by the people you know — either your real friends in real life or your social friends online.”
Kaboodle.com, celebrating its fifth anniversary, has capitalized on a new social shopping trend that Chien said is gaining popularity. The site allows registered users to add products to their own online catalog, add “friends” and “follow” other people, and read recommendations on products and fashion trends.
An activity stream allows users to read their friends’ activities, just as they would read their friends’ “statuses” on Facebook.
“They’re using it as a vehicle to either inform other people and also to find out what other people are saying (about a product, fashion or trend),” Chien said.
Sites such as kaboodle.com have made it easy for retailers as well by making it as simple as possible for users to make a purchase quickly and easily.
“We have partnerships with retailers, so if you have collected a bunch of products around the web (into your online catalog), you can click on the products and go make the purchase on the retailer’s site,” he said.
The social shopping concept morphed out of straight product review sites, such as epinions.com. A growing number of shoppers are consulting review sites before making purchases, especially with big ticket items such as appliances and consumer electronics.
Fashion trends used to be largely dictated by fashion magazines, and now bloggers have come into the picture.
Chien said sites like kaboodle.com emphasize something he calls friend-forced style.
“You’ve probably asked your friend about things … ‘What do you think about this look or this kind of outfit or this store?’” he said. “Your friends have the greatest influence over what you purchase and we’re tapping into that. This is where we see everything evolving.”
Chien said some of this concept can be seen on Facebook, in between irrelevant comments about other matters.
“If I’m a brand or a retailer or an advertiser, what do I do about that?” he asked. “Typically, the way brands or retailers advertise, they target a certain demographic and they buy ads based on that.”
Chien said to help a retailer, brand or advertiser, they will identify the shoppers who are most influential.
“The way we define them as influential is, any message you provide them gets repeated many times,” he said. “A message discovered by one person gets repeated (and shared with other friends), so we think this messaging can occur for brands.”
It’s all about capitalizing on consumers who do a lot of “sharing” on social networking and social shopping sites.
“It’s like the Holy Grail of marketing, if you can find the people who are most enthusiastic to pass on your message better than anyone else,” he said.
Chien admitted it’s still early to determine what the value of “word of mouth” marketing is.
“Tapping into that will be the key in the future,” he said.
Quinnipiac University Professor of Management David Cadden said he believes social shopping sites are making the most of a growing trend, although he said it’s too early to tell how fast they will take off.
“An interesting issue will be how long the takeoff stage will be before the growth,” Cadden said. “It could be a year to three years before some people start making money off this.”
Cadden said he expects to see large social networking sites like Facebook doing more and more advertising for products.
“It will probably be generational, with younger people who are more comfortable with social networking more willing to (get involved with social shopping),” Cadden said. “Social networks will try to exploit that with advertising. They will pump money into it and determine how they can get a kickback.”
Chien said social shopping is a good way to make smart shopping decisions, while spreading the word about great products.
“You might find a product you didn’t know existed, and you will take it as your own for your (online) catalog,” he said. “When you add it to your list, others will discover it.”
