The rise and rise of social shopping

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While sites like E-bay and Amazon have opened up a new, global marketplace to ordinary consumers, the simple fact is that simply buying online doesn’t fulfill many of the psychological quirks that makes us humans so interesting.  Social commerce goes beyond merely allowing consumers to make purchase where they happen to be already – i.e a social network, rather than dragging them back to your website.  We’re not satisfied by mere convenience: we’re social animals, and clever marketers need to use social influence heuristics to connect more deeply with consumers in a noisy marketplace.

Referral programs, reviews, wishlists and forums are all excellent ways of appealing to our innate need to, if not follow the crowd, at least know what the crowd thinks.  Trading reviews, information and favours (“I’ll tell you about this great deal and you’ll reciprocate”) is a simple way to reinforce social relationships and build an online word of mouth campaign.

Another of the things that makes us ticks is influence. Either by positioning ourselves as influencers (“she knows where all the coolest deals / products are”) or by choosing items that are endorsed by people we see as authorities in a given area, influence is at the heart of social commerce. According to Gladwell and many others, trends are often made or broken on the endorsement of a few pivotal “hyperconnected” people.

Group deals or buy-in programs are another great way of combining the classic marketing “scarcity” tactic with social proof. They also appeal to our natural desire to find affinity with one another.

We’ve already seen a great deal of social integration with e-commerce in 2010 and Facebook is increasingly the venue of choice to promote anything from fashion collection to car launches with its ambition to turn pages into storefronts. iTunes Ping is a clear move into social shopping, building a recommendation that acts as a social network for music lovers and providing purchase recommendations based on your connections as well as a huge amount of data and insight derived from learning about users’ libraries through Genius and the iTunes store.

The launch of Google’s Boutiques.com and major investment in the Facebook E-Commerce apps are a strong indication that social shopping will go mass market. After all, why spend all that money engaging with people in social spaces only to drag them off to a traditional shopping site.  Paradoxically, according to the CEO of Facebook app provider BigCommerce, the 25 percent of BigCommerce customers who use the app report that it has resulted in 17 percent more traffic to their sites, on average. It’s early days but it certainly seems that by offering consumers the chance to shop where they want, there’s a consequent improvement in brand loyalty.

Facebook’s bold claim is that by 2015 10 to 15 percent of total consumer spending in developed countries may go through sites such as Facebook. The question is whether this will be beneficial or detrimental to the social experience; for example, certain types of shopping experience, like auctions, are more suited to social spaces than others.

This year Facebook’s exclusive deal with oodle.com, who provide the Classified ads you find in the Marketplace, comes to an end, and if Facebook chooses to open up its online retail capacity, there will be everything to play for.

image from seeminglee on flickr