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October 29, 2007

Online Shopping Gets Social

A recent study from comScore showed that Web 2.0 users in the United States spent about $27 billion online in the second quarter of 2007 alone. Social networking sites saw traffic rise by 33 percent in one year to 81 million unique users. Are these high rates connected? Or should they be?

They are connected and have been termed as “Social Shopping.”

Social networking powerhouses like Facebook and MySpace already have integrated ways for users to shop by having affiliates with various companies, retailers, and sponsored advertisements. Social Shopping companies like ThisNext, Crowdstorm, Kaboodle and Wists have gone a step further by existing as a social network exclusively for shopping. Users of these networks can add, recommend, and search for items. These sites also let you create a profile very similar to ones on Facebook and MySpace, yet some do not allow you to make friends with other users.

Kaboodle, the largest social shopping community on the Web, offers an application for Facebook and MySpace users who want to let their friends know what they are wishing for. By joining Kaboodle’s stand-alone site you can create a wish list filled with products from many different retailers and your very own profile. Retailers can add buttons to their sites that include their products on Kaboodle, making them more visible.

Kaboodle has also worked out a deal with eBay’s comparison shopping service, Shopping.com. Whenever a user on Kaboodle posts a product that also appears on Shopping.com, Kaboodle will post all the various prices that the online retailers of the product have posted, much like Shopping.com does. If the user clicks through to the retailer’s site, Kaboodle will earn a percentage of the money Shopping.com receives from that retailer.

Is this the way to shop in the future? Will your local shopping mall become nothing but an empty building? Will people limit their search and discovery of new products to the Internet only?

“Customers are so used to going to the store to discover new products that it’ll take a long time to get them out of that,” said Patti Freeman Evans, an analyst with Jupiter Research, an online consultant.