The Social Side of Shopping

Ecommerce and holiday shopping deals

Online shopping is no longer a simple point, click and purchase affair. A burgeoning crop of startup firms is moving to customize the process with widgets, live-chat and social-networking features.

Blending e-commerce with the community-driven Web 2.0 world can take many forms, and it’s not always a perfect fit. Recall last holiday season, when Facebook tried to convert people’s Internet errands on other sites into product recommendations sent out in their news feeds, and ended up broadcasting the gifts its users bought their friends and touching off a privacy firestorm.

But that misstep isn’t stopping retailers from trying to break into the social Web and reach customers on the sites they like to visit.

“With a steady decline in visits to destination websites over the past 24 months, retailers are looking for ways to reach customers who are no longer coming to them,” said Julie Fuchs, director of business development for MediaForge, a company specializing in promotional widgets for retailers to build their brand across the Web.

“Many of these customers are finding similar items on vertical sites and social networking sites,” Fuchs told InternetNews.com.

Volusion is one of the companies working to facilitate that convergence. Volusion is a software firm and e-commerce consultancy aiming to help retailers improve and socialize their online presence.

The company recently commissioned Harris Interactive to conduct a study where more than a quarter of online users said that product reviews and comments would encourage them to shop on social networks.

“Online businesses that choose to get involved have much to gain from developing relationships and communicating their messages in the online spaces where potential customers are actively socializing and learning about products they are interested in purchasing,” Volusion’s Pam Westbrook wrote in a company blog post.

“Relationships have long been a core component of business, and social media provides a contemporary means of developing and fostering them.”

But Volusion is only one of many niche firms working to tweak the online shopping experience.

Just in time for the holiday shopping surge, Yoono yesterday launched a shopping widget that generates product recommendations and offers price comparisons. The Firefox sidebar models a user’s Web browsing and serves up related product suggestions from popular e-commerce sites. Once users find a deal they like, they can export it to their profile pages on Facebook, MySpace, Twitter and other social sites.

MediaForge operates in a related space. The company recently launched its distributed commerce platform, aimed at giving retailers a presence on personalized starting-point sites like iGoogle and Facebook.

[cob:Special_Report]”Getting users engaged in your brand, wherever they are, can greatly reduce your overall acquisition costs,” MediaForge CEO Tony Zito told InternetNews.com. “Leveraging the value of ongoing special offers, coupons and other loyalty features allows you to develop a deeper-rooted relationship with your customer, on a one-to-one basis.”

“When customers find real value, they tend to share it,” he added.

As a success story, Zito pointed to Southwest Airlines’ “Ding” widget, a downloadable desktop feature that alerts users as promotional fares become available. In its first two years, the Ding widget generated more than $150 million in ticket sales, Ad Age reported.

Page 2: Another twist on personalization

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Baynote offers another twist on the personalization question. The company markets a technology to online retailers that aims to take the recommendation process beyond Amazon’s model of suggesting a product based on past purchases and other people’s shopping decisions.

Baynote’s technology claims to analyze “digital fingerprints” — factors like how many times people click on a product or how long they look at it — to enable the retailer to display the most relevant products for a particular user.

Of course, this year the sour economy is casting a long shadow over the holiday shopping season, with analysts from all corners projecting a declining growth rate. For the first 23 days of November, comScore reported that online spend dropped 4 percent from the same period in 2007. The firm is projecting flat growth for the entire season, but has also suggested that weakened consumer spending could breathe new life into the still-nascent online coupon industry.

Even coupons are getting more social. One startup, called RetailMeNot, maintains an online coupon forum where members can access promotional codes for participating online retailers, and then leave feedback about any restrictions or special instructions for redeeming it, or note if it is no longer valid.

But coupons are a sidelight compared to some of the aggressive promotional strategies that online retailers are planning to deploy this year as they court cash-strapped shoppers. A recent study by Shop.org, the trade group representing the online retail industry, found that 84 percent of online merchants plan to offer some kind of promotion this year, such as free shipping or one-day sales.

MediaForge’s Zito said that those promotions should translate into a retailer’s messaging across the social Web.

“For e-retailers, social strategies should enable the other promotions, providing additional distribution points,” Zito said. “At the core, social strategies should remind users of the brand’s value proposition to the user.”

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