The thrill of the deal, spreading the word, networking with birds of your feather, getting the scoop -- social shopping has all of the trappings, joys and innuendos that fuel commerce.
In 2008, U.S. advertisers are expected to spend nearly $1.6 billion -- up 69 percent from the $920 million they will have spent in 2007, according to the report, "Social Network Marketing: Ad Spending and Usage." In four years, U.S. ad spend on social-networking sites is expected to reach $2.7 billion.
Social commerce has arrived... so pay attention
Simply put, social commerce is about customers having the means to interact with one another in order to make better buying decisions.
The social aspects of shopping have long been an integral part of our culture first institutionalized and marketed perhaps with the original Tupperware Home Party in 1948. Asking someone where she got that great bag, hearing about the latest sale from a friend or socializing at the mall are all integral parts of our consumer culture.
The advent of ecommerce and, more specifically, word-of-mouth vehicles such as reviews on shopping sites and other online platforms is a bold extension of the power of word of mouth and the social joys that accompany shopping. New media communications now provide an even broader, extensible platform to further ignite the social aspect of shopping.
Social shopping online expresses itself in a multitude of different ways, from so-called social shopping sites with features that encourage word of mouth to social networks such as Facebook that are trying to monetize their social fabric with shopping applications.
What does this all mean for marketers? How can they join in the conversation, start the buzz, spread the word without seeming like... well, like they are trying to sell stuff? What is acceptable in this environment? What are the current options, opportunities and challenges?
To begin to answer these questions requires gaining an understanding of how social shopping is being enacted, the environment, the opportunities and challenges.
From social networks to social shopping sites and site features that encourage and facilitate social commerce, social shopping is evolving. With most teens and nearly 40 percent of adults visiting social networking sites, advertisers are avidly experimenting on Facebook, MySpace and niche online social networks, according to a new eMarketer report. Social networking sites and services designed around shopping such as Stylehive, Kaboodle and CrowdStorm encourage customer feedback, discussion and reviews. They are rooted in encouraging dialogue, chatter and peer-to-peer sharing of information.
Who are the leaders in this market? Where are people socializing? What are the opportunities for marketers?
Despite increases month over month in traffic, social shopping has not yet become as mainstream as other social networks such as MySpace (67,000,000 uniques/month) with only 1.43 percent of MySpace's traffic. That said, Kaboodle, ThisNext, StyleHive and StyleFeeder are the leaders in the social shopping market. Kaboodle has the most traffic to date (959,000 uniques/month).
Kaboodle is also on the forefront in terms of monetizing social shopping. Recently, Kaboodle partnered with Shopping.com in an effort to increase revenue. When users feature products on their blogs, Shopping.com will post the prices at which the product is sold online by various merchants. If a user clicks through to the merchant's site, Kaboodle will earn a share of the fee the merchant pays to Shopping.com for that click.
Social networks such as Facebook are trying to monetize their audience with shopping content and features. While wildly popular, these networks are struggling and experimenting with different revenue models. Some sites plan to (if they have not already) 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.
Communities that are built around specific products or genres also encourage social commerce. For instance, FashMatch and StyleZone are online communities for the fashionistas to discuss the latest clothing, shoe and accessory trends. Manolo's Shoe Blog and All Lacquered Up are blogs devoted to shoes and nail polish, respectively. Through these forums and communities, brands can directly engage with consumers with demonstrated interest in their products.
Consumers are also socializing around e-commerce sites. Overstock.com's traffic rose 122 percent for the week ending December 2, according to Nielsen's Kate Niederhoffer. Online reviews and recommendations have been increasing in importance and have evolved from simple product reviews to be more social in nature.
Even bloggers are now pointing consumers to social shopping sites. Review sites like Epinions are included in the category and are a channel that should not be ignored. People would rather take the word of another consumer over advertising from the brand itself. It takes word-of-mouth marketing to a new level. Instead of a girlfriend telling you she got an amazing deal on a pair of Stuart Weitzman shoes at Nordstrom, you go to Stylehive.com, find out what the trendiest shoe styles are, and click the link to endless.com where they're on sale for 30 percent off.
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