A trip to e-commerce stores is becoming more like a trip to the mall with the growth of social networking shopping Web sites.
Sites including StyleHive, ThisNext, Kaboodle and Wists host social networks where users create profiles and highlight their favorite products.
“Just like MySpace became a place for people to find cool new bands before they were signed by the big labels, sites like Wists are good for spotting new design trends in products,” said David Galbraith, a spokesman for Wists, New York.
Using these sites, consumers can gain insights similar to shopping with friends or listening to the opinions of sales associates. Users on these sites are consumers, stylists and retailers who are interested in interacting with others to keep up to date on the latest trends.
“All of shopping is fundamentally social,” said Michael Carrier, president of StyleHive, San Francisco. “What you buy is based on the people around you and what they like and what they buy.”
In these communities, users discover products through recommendations. Shoppers match personal taste and style to others in the community to learn about new products and stores. These sites go beyond basic user-generated reviews. Users make recommendations on products and add people with similar tastes to their own group of friends. The demographic is largely women age 20 to 40.
“We think e-commerce is broken because the focus is on purchasing and not shopping, which are two different things,” said Gordon Gould, CEO of ThisNext, Los Angeles. “Truly successful appeals by retailers to consumers are emotionally driven like those found in peer-based recommendations.”
This word of mouth communication benefits smaller retailers with less brand recognition.
“One of the beds we featured on the home page got added to over 50 lists and drove thousands of visitors to the store in a couple of days,” said Manish Chandra, founder/CEO of Kaboodle Inc., San Jose, CA. “The exposure of products and store over time can help build branding and visibility for even small stores that typically do not have the reach of large stores.”
Larger brands have also benefited from the social shopping sites.
“When the iPhone was launched in real time we saw more than 100 people add iPhone to their profiles,” Mr. Chandra said. “This can be a great way to gauge the interest in new products.”
To monetize the content, these sites sell banner ads, keyword purchasing and affiliate links. But the social shopping site has not replaced the mall yet.
“I don’t think social shopping will replace mall shopping, but will be [an] addition to mall shopping,” Mr. Gould said. “It will make malls create better environments and improve the entertainment value.”