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Can Social Shopping Finally Take Off?

Some companies still trying to integrate social networking and e-commerce
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Analog shopping is inherently social. There’s the flea market stroll, the girls’ outing, and the time-honored encounter with a mall Santa. But e-commerce, a category that’s expected to reach $200 billion this year, has yet to reap full benefits of the social networking revolution. The two seem as compatible as reindeer and sleighs, yet the universe is littered with proof of awkward pratfalls. (After all, who wants to learn on Facebook that their significant other bought an engagement ring at Dave’s Diamond Barn?) That explains why Facebook killed Beacon, a function that automatically published a user’s e-commerce interactions to news feeds. Apple’s Ping, which shared iTunes buys, flopped. And Blippy, a well-funded startup that shared credit card purchases on social networks, pivoted earlier this year to do something—anything—else.

Shopping on Facebook remains a challenge. F-commerce—online storefronts within the Facebook framework—hasn’t quite caught on. Large brands like Pampers and ASOS have opened successful stores on the platform, but integration with existing inventory operations is too costly for the average-sized retailer. What’s more, it’s not clear how willing shoppers are to open their wallets on a social network. “People don’t go to Facebook to shop. They never have,” says Harish Abbott, co-founder of Sneakpeeq, a social shopping platform. Using “Facebook norms,” like game mechanics, to drive discovery, is more effective, he says.

Rather than drop dollars into F-commerce, retailers are getting more socially creative with their own e-commerce sites. And they should—revenue per click from shoppers arriving via social media links is $5.24, versus the $3.18 per click spent by email shoppers, according to analytics company ClearSaleing. Share and “like” buttons help drive traffic since click-through rates for news feed links are vastly higher than for Facebook ads. The Levis.com “Friends Store,” for example, uses Facebook Connect so its shoppers can see comments, shares, and likes from their Facebook friends within the Levi’s site. It’s social, without that awkward automatic sharing part.

Here are three more ways social shopping could shine this season—without, we hope, any help from the Diamond Barn.

Curation Counts
Keenly edited sites like Fab.com, OpenSky, and Gilt Groupe have experienced explosive growth in email subscriptions thanks to a focus on unique products that users want to tell friends about. “People will share what they love,” Jason Goldberg, CEO of Fab.com, said at a recent conference. The six-month-old company has 900,000 users and a revenue run rate of $50 million.

Virtual Wish Lists
Online pinboard sites Pinterest, Polyvore, and Svpply let users share stuff they love, promoting product lust and consumerism in the process. It’s a perfect place for brands like Nordstrom and Bergdorf Goodman, which use Pinterest collages to promote their products
and (in theory) drive traffic to their online shops. The jury is out on effectiveness, since ultimately the sites are home to content, not commerce. 

The Search Box is Dead
Long live personalization. “Internet shopping was designed by men for men. They walk into a store with a list of things, they search for them and get out as fast as possible,” says John Caplan, CEO and founder of OpenSky. Search box-free sites like OpenSky offer a more female-friendly experience, letting women discover new products tailored to their interests, he says.