Social commerce – on its way back in?

By September 30, 2010Ecommerce

A couple of years back there was a wave of social shopping startups (e.g. Kaboodle, Crowdstorm) looking to combine reviews and recommendations with friend lists to help people shop more smartly.  Unfortunately none of them got too far – but the idea is back, now called social commerce, and maybe this time it will stick.

There is a post up today on Practical Ecommerce which gives a good primer.  First a definition:

helping people connect where they buy, and buy where they connect

Thinking this through it become obvious that you either help people at or around the point of purchase (i.e. at the ecommerce sites ‘where they buy’) or you stimulate conversation about commerce where people are already communicating (i.e. on the social networks ‘where they connect’).  The first generation social shopping sites sought to be destination sites in their own right, which is maybe why they struggled.

In this vision of the world the social commerce startup opportunity is providing tools to ecommerce sites for reviews, links to social networks which bring intelligence from friends or friends of friends, and intelligence from people I don’t know who are ‘like me’ or experts.

Tools like these could provide a lot of additional comfort to online shoppers as they make their buying decisions and thereby increase conversions.

So far this market is at a very early stage and speaking for myself at least I don’t see much connecting where I buy.  I’m a big user of reviews on Amazon, and the ‘X people found this review useful’ intelligence is very helpful, but they could go a lot further e.g. with links through to my Facebook social graph or by mining the data they have about me (and can get from third parties like Facebook) to help inform my purchase decisions.  This stuff doesn’t have to be complicated either, a brief pointer that says XYZ people in your extended network have viewed or bought this item would help a lot.

Thanks to @fabiodebe for the pointer to this article.

  • Amazon have started on connecting your FB social graph…you should be able to log in on the .com (rather than .co.uk), login and then connect using FB connect. You’ll then see your friends wishlists, likes etc.

  • Cool. Thanks for the pointer.

  • Nic, glad you liked the subject.

    Just a few comments…
    Kaboodle was acquired by Hearst in 2007 and their traffic grew steadily after that (up to a very respectable 5M uniques a month), so I guess that they went quite far in a way 🙂 But there aren’t many other successful examples so I agree that social shopping failed to show mainstream adoption so far.

    Also, I agree that possibly the single biggest difference between social shopping and social commerce is about being a destination site or a syndicated service/platform, and definitely leveraging the power of social networks give today’s players an edge.

    My first start up Veedow.com is a typical example of destination site / social shopping proposition and it never really took off (sadly). Wishpot.com (my current ‘home’) on the other hand started as a consumer focused destination site and evolved to become a broader social commerce platform leveraging the core technology we’ve built. I believe it’s been the best decision because betting everything on building a huge community is too risky, while diversifying the offering and being able to offer solutions that truly help people connect where they buy and buy where they connect is what de-risks the business and makes it grow faster.

    That being said, there is still a long long way forward for social commerce, as I believe we’ve barely seen the top of the iceberg… and after all it’s not a mainstream concept yet, however close to tip. When smart product recommendations rather than search will be the new de-facto way to shop, then we will have seen what social commerce potential really was.

  • Thanks for a great comment.

    the idea that social commerce will have achieved success when recommendations replace search is a good one.

  • Hi Nic,
    Given the ref to Crowdstorm, would you class group buying sites such as Keynoir as social commerce? If so, what sort of future do you see for that model?
    Cheers,
    James

  • Hi James – group buying is a whole different model. I think it has legs so long as they can provide long term value to their local business partners.

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  • Nic, somehow I completely missed this post until today. My apologizes. Thank you for the link to the PeC article I wrote. Social commerce is a fascinating subject and I look for amazing things to happen in 2011.