Digital Media Buzz > Social Shopping: Proving the Herd Mentality

Social Shopping: Proving the Herd Mentality

By Zakiya Lathan

“It’s a shopping destination site with a strong focus on community. So we call it social shopping,” says Manish Chandra, the CEO and co-founder of Kaboodle.com, in describing his site, a vanguard in the field of social shopping.

Chandra explains how visitors can use the site: “They can go to a retailer like a Macy’s, or a Target, or Nordstrom; Pick up products and add them to Kaboodle on their list. Discuss them and engage in conversations that happen around these products.”

In addition to conversation and interaction with other shoppers, visitors to Kaboodle will find interactive tools to aid them in their online shopping choices. There is a collage-like feature called a “Styleboard,” which helps shoppers to visualize their intended purchases. Rooms can be arranged and decorated. Entire outfits can be coordinated and accessorized. If shoppers are still undecided, they can turn to each other for help and post a “Help Me Choose” poll. Inspiration for the next shopping spree can be found in editorial features called “Kits.”

According to Chandra, more online consumers are using virtual shopping buddies. “It’s hit a point of inflection. And it’s really starting to broaden out and reach mainstream, both from an adoption perspective as well as from an advertising perspective,” he says.

Kaboodle.com has played a big role in bringing social shopping to the mainstream. Though there are many social shopping sites to choose from, Kaboodle was one of the first to break through in 2006. It is now a leading online social shopping destination.

Being early on the scene is not all that sets Kaboodle apart. Chandra explains one key difference that Kaboodle has with other social shopping sites:

“I think first is just the size, and the breadth and depth of our community. And just the reach of the site. We are probably five to 10 times bigger than all the other social shopping sites.

“We ended the first year with little over 100,000 visitors. We ended the second year with a little over three million visitors. We ended the third year with over 10 million visitors. And we are talking over 14 million unique visitors a month right now on Kaboodle, as of May,” he says.

This edge in the social shopping field gives Kaboodle ’s CEO a unique vantage point for looking ahead at what the future holds for social shopping.

“It’s starting to become a very exciting area for both the users and for retailers who are looking to reach audiences. So what we are seeing is increased presence, both in terms of engagement, but also in terms of advertising dollars by retailers to reach out to this passionate group of users,” Chandra says, adding that this is an area of e-commerce that doesn’t seem to be adversely affected by the weak economy. “So even in this downturn, we’ve seen the site grow 40 percent, just in the first five months [of 2009]. And we were starting with a fairly large number to begin with.”

The state of the economy has many online consumers in search of a bargain. Online social shopping start-up, Pikaba.com, is trying to capitalize on this by simplifying online comparison shopping.

“At the very basic of the shopping experience is, there is a request: ‘I want to buy something.’ And this ‘I want to buy something,’ that’s something that, kind of, we wanted to capture,” said Pikaba.com CEO, Dmitry Balin.

After a Pikaba user posts a request to the site, he or she sits back and waits for merchants and service providers to bid for their business. Pikaba’s model, in effect, creates what Balin refers to as a “reverse auction.”

“The goal is to provide this really personalized shopping experience for consumers as well as for businesses who need to purchase something. Where, pretty much, the only thing people need to do is to say, ‘That’s what I want.’ And the request, they post a request on the site saying, ‘That’s what I’m looking for.’ They can specify the budget. They can specify the timeframe,” Balin says.

Shoppers on Pikaba.com can use social networking to their advantage in leveraging their collective buying power to get bulk rates for goods. The site’s software is able to identify clusters of identical or similar requests for products that are concentrated in a particular geographical area. Shoppers are then alerted to the fact and given the option to create a group purchase request.

This unconventional approach to online shopping already has a few fans. Pikaba.com won the “Social Shopping” category for People’s Choice in Mashable’s Second Annual Open Web Awards.

Balin plans to monetize the site, which was launched less than 18 months ago, by eventually charging the merchants and the service providers to bid.

“We are going to charge the merchants. At this point, it’s still free. But we pretty much created it with the goal, with the plan for the merchants. And the idea is really to give them more kind of tools to make them more successful from the sell,” he says.

Balin believes that merchants have much to gain, from an advertising aspect, in using his site’s uniquely targeted leads.

Kaboodle takes a more conventional approach to gaining advertising dollars.

“We monetize our site both through brand advertising, display advertising, as well as through performance advertising, which is more lead generation affiliated, CPC/CPA advertising. And the split has been roughly 50/50,” Chandra says.

Social networking is becoming more common throughout the Internet. Public forums, comment areas and blogs are commonplace now on corporate, news and government websites. Is social shopping the way that traditional e-commerce websites are heading?

“If you look at it from a retail perspective, they are certainly adding some of the features, which are around user and community features. I wouldn’t call them ‘social’ yet. But I would certainly call them more sort of user features. In terms of more comparison shopping engines, etc, they’ve tried to experiment with social shopping. I haven’t seen them really succeed. And I think part of the reason is because it’s hard to do too many things as a single site,” he says.

Only time will tell what the future holds for social shopping. But Kaboodle’s CEO has a definite opinion on one thing. “I think shopping — social shopping — will have a distinct sort of future than other forms of e-commerce, is sort of my belief,” Chandra says.

Zakiya Lathan is a freelance writer. Prior to freelancing, Zakiya worked in broadcast news as a Web producer and online journalist for CBS affiliate KTVA-TV in Anchorage, Alaska. She also produced newscasts for the Anchorage, Alaska FOX affiliate KTBY-TV. Her website is http://zakiya.net.

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