SOCIAL SHOPPING - BOOM OR BUST?

It's all the rage these days. Every time I read the latest business news it seems like someone's hyping social shopping. But will it be as big as its buzz?

If you're new to social shopping, there's a great introduction in this article from the NY Times. Essentially it's the marriage of online social networking like My Space, and independent product recommendations. Perhaps the most popular example is ThisNext.com - a site that doesn't actually sell anything but simply acts as a social shopping funnel to retailers.

The general concept is that shoppers are much more likely to purchase a product that comes recommended to them by someone they network with. Some of these sites even allow shoppers to shop together virtually online - selecting products into a group collection and making notes about them to others in the group.

The concept of improved conversions through independent recommendations certainly isn't new - many large online retailers have been collecting and publishing customer reviews for years in an attempt to boost conversions.

While the Silicon Valley whipper-snappers are already declaring victory as the next great shopping innovation - I'm not quite sold.

It's not that I don't see the value...

I get the value of social shopping - I've used a similar concept to market high-end fashion apparel, by forming relationships with some popular fashion bloggers who wrote daily about the products and incited small flurries of buzz.

I see strong value in social shopping. I believe it's a fantastic innovation that will fuel some types and segments of the online retail industry. But I see the scope as limited, and I doubt we'll see social shopping "replace" other valuable traffic sources - rather the potential to be an additional source of revenue for some online retailers.

Ultimately, I believe the biggest benefits of social shopping will be realized by niche product manufacturers and niche brands, and retailers specifically seeking a younger audience. A small company with a truly unique, innovative product but limited brand marketing resources will have the possibility of suddenly catching on in a viral manner through social shopping networks. All it takes is one person to hear about the product and communicate it to their shopping network to start the fire.

It's just that...

• The value seems largely limited to introducing shoppers to new types of products they weren't previously aware existed. Social shopping doesn't seem to have any particular value add for mainstream consumer products over typical recommendations. If you already know exactly what you want, social shopping is a mute point. However, even if you're actually shopping for a mainstream product - say a kitchen appliance - social shopping doesn't seem to add anything of value. All of the major appliance (<- or insert other mainstream product here) retailers already have shopper product reviews.
  

• Beyond introducing shoppers to new products, the ability to sway shoppers toward specific products is probably very limited to shoppers purchasing from a need to be liked. The rest of us really don't care that much about what other people think. I (and many consumers like me) don't put a whole lot of weight on product recommendations anyway. We realize they can be manipulated, and often are like movie reviews - only of any value if the reviewer has the same needs and perspectives that we do.
  

• Because younger shoppers tend to be influenced more by what other people think, and are the early adopters of social networking, the effective scope of social shopping is likely to be younger shoppers - with less spending power.
  

My disclaimer...

Social shopping is new, and certainly in its infancy. My comments are as of the date of publication. I could be wrong in the long run - this is my take today. No warranties expressed or implied.