How online retailers can benefit from social shopping

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Online retailers are doing relatively well in the current economic climate. Whilst spending is down across the board, online retailers are doing either significantly less badly than their traditional competitors, or they are actually performing strongly. Both ASOS and Vente-Privee are seeing relatively strong performances in a weak retail market. There are many reasons for this – online-only business models have lower overheads and are potentially easier to scale (up or down) depending on demand). They also allow the retailers to stock smaller amounts of more products, allowing them to have a larger portfolio and to cater for a wider range of goods.

But these structural reasons only tell part of the story. The real reason why online retailers should be, and in many cases are, performing better than their traditional counterparts is because of what online lets you do. It’s not just taking an offline concept online, it’s about doing completely new things in completely new ways.

One of the real benefits of online retail is the ability to personalise the shopping experience and to recommend additional items that an individual shopper is likely to want. In the offline world, this is possible with a well-trained and experienced assistant who will identify what a shopper is likely to want and what suits them. They can then help to guide and recommend items that they think might appeal to them. Online we can use something a lot more powerful: people like me.

We know that people trust people like them, will make purchase decisions on what they say and recommend. It’s why online ratings and reviews are a significant influence on purchases. In online retail there are a number of ways in which you can use ‘people like us’ to recommend other products to shoppers.

  1. Use aggregate data from the shopping experience and from previous baskets to predict what people might want to buy. You can then present related items and other popular items based on previous purchase patterns.
  2. Use ratings and reviews from other shoppers to advise people on what products they might like and what people think about them.

Both of these can be quite successful when offered as standalone elements in the e-commerce system. But they take on a significantly more powerful role when integrated with an online community. Rather than just recommending products based on previous shopping habits, you can show people who have bought that product before, the other things they buy, the discussions they take part in, the things we know about them or that they are willing to tell us. And rather than a set of isolated reviews from other shoppers, we can show these reviews as just part of the content that somebody has added to the community, alongside the questions they may have asked or answered in the forums and photos of them in the galleries.

We know that people trust ‘people like me’, and that they are influenced heavily by people with whom they feel a connection, shared interest or other similarity. Online retail benefits most when it lets you see such people. You can find out not what people who may have bought one particular product have also bought, but, perhaps more importantly, what people who you feel an affinity with have bought. This doesn’t mean you will buy the product too, but it does increase your likelihood to do so. When you start to relate with people and identify with them you trust them and their choices more. You are influenced by them.

Online retail can do things that are just not possible offline. Whilst you might go to a store with a friend and get their advice, online you can tap into the thoughts, reviews and decisions of many thousands of people that you might identify as being people like you. Even if you don’t know them.

This is true social shopping. And online retailers can benefit from this in a way that is just not possible offline.

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17 Responses
  • Daniel
    Aug 18, 2009

    vente-privee.com is a company that grows via word of mouth only due to it’s unique invitation-only membership scheme which has been in place since the website launched in 2001.

    For this reason, social is at the very roots of the company. This is reflected in the success of the blog on the French version of the website which is the most popular blog in France (average 300 comments per post).

    Many of the suggestions you make in your article are great but not compatible with the vente-privee.com business model. Sales are limited to 2 or 3 days and when they close, they disappear from the website. This would hamper the use of tools such as Product Reviews by users, or Recommended Items lists, or other Ratings systems.

    Ultimately people will talk about vente-privee.com as long as the brands are good and the prices are right. The company has managed to get that balance right and continuing to do so will see further success in countries such as the UK, Germany, Spain and Italy.

    Daniel Aug 18, 2009
    Reply
  • Aug 19, 2009

    great post — having worked on eBags.com (where their strongest brand differentiator is the 1.8MM reviews/testimonials on their site), i also believe in the power of “social shopping” — there is so much possible with online shopping, i almost feel sorry for offline retailers!

    Denise Lee Yohn Aug 19, 2009
    Reply
  • Aug 20, 2009

    This is a good post about online retailers. Social shopping is indeed helpful for them. This can generate a lot of leads for them and word of mouth works on further popularizing their store.

    Amanda Rush Aug 20, 2009
    Reply
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    Aug 20, 2009

    [...] How online retailers can good from amicable selling … [...]

    Wholesale Fashion Clothing: Good News for Retailers and Wholesalers | GoogleTrends.US Aug 20, 2009
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  • [...] How online retailers can benefit from social shopping [...]

    Reply
  • Maurice
    Oct 18, 2009

    On a learning spree. Thanks for the post.

    Maurice Oct 18, 2009
    Reply
  • shopping baskets
    Oct 20, 2009

    your blog is so excellent.
    Thanks.

    shopping baskets Oct 20, 2009
    Reply
  • [...] how about integrating some more social shopping technologies?  The guys over at FreshNetworks discuss this.  And whilst Reviews are probably out, given the short “flash sale” style [...]

    Reply
  • Oct 23, 2009

    Interesting thread; whilst Reviews are probably out for private shopping clubs that do flash sales, other social shopping tools could really work; co-browsing, registries and social recommendations (based on profile similarities). Posted a response over at http://www.socialcommercetoday.com/?p=830

    Paul Marsden Oct 23, 2009
    Reply
  • Nov 2, 2009

    I agree with many of your comments about online retailing at present. We find as online retailers for gardening products that we have had to expand our portfolio of products dramatically though to avoid being left behind. Many competitors have simply halved their prices and stolen a lead in the market. As much as this is unfair, we have had to up our game and look for niches in the garden centre retail market that will allow us to survive, rather than expand. That is why we have introduced arange of outdoor clothing and giftwear to our product range. These are things we would never have contemplated before. Competition online between retailers has never been so strong and we must all just cross our fingers and hope things improve soon and consumers again dip into their pockets to trust that spending money is ok. Thank you again for a great article. I would appreciate any advice where we could boost sales. Simply getting great online retailer reviews doesnt seem enough anymore.

    Paul Nov 2, 2009
    Reply
  • [...] Social shopping can benefit retailers in several ways, especially if it is integrated with a wider online sales strategy.  With this in mind, we’re running a free breakfast seminar for retailers on how to use social shopping to increase online profits. [...]

    Reply
  • [...] written previously about the value of social shopping and how it can benefit online retailers,  and it seems that the issue of social commerce has risen to the forefront of e-commerce strategy [...]

    Reply
  • Zicocn
    Oct 15, 2010

    Nice article. Most social shopping initiatives, however, are still in the basics sending a piece of content or a link with social networks to alert friends. A real social shopping experience can be realized with co-browsing technology linked to social networks.

    Zicocn Oct 15, 2010
    Reply
  • Sophie
    Dec 10, 2010

    http://www.pickcheaps.com, you can get benefits from it

    Sophie Dec 10, 2010
    Reply
  • Blogseeks.com
    Mar 3, 2011

    The Benefits of Online Shopping…

    Online shopping is becoming increasingly popular for a variety of reasons. There are certainly outside factors such as increasing gas prices, difficulty getting to traditional stores and the hassles often associated with shopping in malls and other tra…

    Blogseeks.com Mar 3, 2011
    Reply
  • Feb 11, 2014

    Nice article. Nearly all interpersonal looking pursuits, however, continue to be from the basics sending a bit of written content or perhaps a hyperlink together with internet sites to help alert close friends.

    Grace Baby Feb 11, 2014
    Reply
  • Sep 10, 2014

    Ecommerce has become so popular and profitable because of a number of online shopping benefits buyers have discovered since the beginning of the electronic commerce era.

    Online Shopping in mexico

    madelast1 Sep 10, 2014
    Reply

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