Social Shopping - The Next Big Thing

The Business Magazine has an interesting article of the impact of social networking and e-commerce on traditional bricks and mortar outfits.

It talks about about the company that owns the Cosmo and Good Housekeeping brands buying the self-styled social shopping site Kaboodle for a relatively light £19m.

The site has grown from just 100,000 monthly unique visitors in October 2006 but last month has grown to 3 million.

It works by asking you to rate a variety of products and then joins you to groups of people with similar tastes. They've also got a social bookmarking feature that allows users to save "clips" of products they see on other sites from their toolbar (like Stumbleupon) and adds it to their profile.

So over time the Kaboodle site will get a better profile of the registrant - just think of the marketing opportunity that they'll give to advertisers!

They also mention StyleHive which works in much the same way. But it is Crowdstorm that is set to dominate in the UK. The new version of the site will be released in the next couple of weeks and aims to allow consumers to shop around the UK and whilst they browse the system will learn their browsing habits and automatically place them in groups (crowds) that it feels could help them make better buying decisions.

They're also set to offer an advanced advertising system that uses search data to pick up which brands people are searching for and which retailers and then offer advertising at a premium to competing brands. Good move!

The Business contends that:

"While [social shopping sites] focus on images makes it easier to browse and buy fashion and homeware, consumers of these kinds of products also want to touch and try, something the internet cannot offer. Social shopping sites will fill a valuable niche in the online shopping market, but the death of the salesman is still some way off."

My view is that its only a mater of time. But until then, affiliates should be using these sites for their own end. I'm not talking about hijacking and spamming them, but for market research - finding out which products have buzz and promoting them via the normal methods.

But what happens if they start to dominate the general shopping channels? How should retailers and affiliates respond? Affiliates will have to continue to add value to the buying process (see my What will Affiliate Marketing be like in 5 years post) and retailers will just have to see them as another advertising medium.

Eventually, these social, "we're learning exactly what you want"-type sites will dominate the end of the buying cycle. But how will Google respond to social shopping sites and truly intuitive sites like FetchBack? I think they've really missed a trick with the social type services. They had the opportunity to socialise Google Products but haven't. This is a mistake that could cost them millions billions.