Retailers look to ‘social shopping’ trend to woo customers

Hanging out at the mall with your friends is no longer as social as your shopping experience can get. Consumers are increasingly opting for online shopping, using mobile phones and perusing social media sites to buy products and share information, according to reports from IBM Corp. and Delvinia Interactive Inc., a marketing and data collection firm.

The Social Shopper: A Lens into the Future of Retail Experiences is Delvinia’s Feb. 24 report, highlights some major trends around the use of technology among consumers. Sixty-one per cent of Canadians surveyed said that they research products online before making purchase decisions for at least half of the products they buy.

“It’s about people being mobile,” says Steve Mast, president of Delvinia, attributing the social shopping trend to ubiquitous smartphones. This technology also has a social component, he says, allowing shoppers to share information quickly, whether over Facebook or even by using their phones’ digital cameras to send photos of products they like to friends.

According to an October 2010 worldwide survey by IBM, nearly half of those surveyed in their 20s and 30s are “instrumented,” meaning that they use at least two technologies to shop, such as their mobile phones and the Internet.

“People are time poor,” adds John Dawkins, head of retail consulting practice in Canada at IBM, which adds to their new aim of shopping quickly and effectively.

References from friends and family, though, are still most significant in the shopping process, which is where the “social” aspect of “social shopping” comes in. According to IBM’s survey, 45 per cent of consumers turn to people close to them for advice on what to buy.

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Calgary-based Babybot is one company that has embraced the trend. It was created in December 2009 and has since grown to be one of the largest online retailers of modern baby products in Canada.

Its management team realized during the company’s infant stage that Facebook was one of its largest drivers of traffic to the site, says Michael Tran, managing partner of Babybot. While having a “Like” button on its fan page was okay, Tran says, they thought there might be better ways to take advantage of Facebook’s popularity.

Right now, for example, users can use their Facebook login when they reach Babybot’s checkout. The buyer can choose five friends to receive promo codes for 15 per cent off the site’s merchandise. Then, for each promo redeemed, the original buyer receives a $5 gift card.

The social shopping craze has, in fact, now culminated into the Facebook Shopping Mall, launched on Feb. 24 by Payvment Inc. The company already has a free application for businesses to create “stores” on Facebook. A business can put an unlimited amount of merchandise up for sale using the app, which supports 20 different currencies.

The new Shopping Mall app allows users to search products and see what their friends like. It functions a bit like an online shopping site, but with a social angle. The products that trend are not the bestsellers, but rather the most “liked.” The trending list resets daily, so a company that launches today will be on the same footing as an established company.

“It needed to be social and feel like Facebook,” says Christian Taylor, chief executive officer of Payvment. The other goal was to help businesses get discovered, he says. “We needed to level the playing field.”

The mall currently only features products that are available in U.S. dollars, but will be rolling out internationally over the next month.

How your business can make the most of the trend

Even if your business is not prominently technical or housed online like Babybot, there are still ways to use social shopping to your advantage. “It’s not one-size fits all, but it is definitely trending,” says Mast, and every business can somehow capitalize on these social and mobile trends.

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If your company is new to social media, or even to being online, it’s important to get the fundamentals right, says Mast. This includes making sure you are visible in results when a consumer searches for your company online and recognizing the growing mobile market.

“I would highly recommend making your product mobile-friendly,” he says, as a lot of consumers are now looking up quick information on phones that may not support media-rich Web sites.

IBM’s Dawkins recommends small businesses and startups  use Facebook, Twitter, blogging and other inexpensive media for marketing their company and offering promotions. Tran agrees that this is far more effective and much cheaper than paying for a banner ad on an external Web site.

Dawkins also suggests searching e-commerce sites like Amazon to see how your targeted customers shop and also how your competition uses social media and networking tools. “Act like a consumer,” he says, since it’s an inexpensive way to research.

Web sites like Groupon and coupon apps for smartphones are one way to take advantage of the social shopping trend. Using barcodes that can be scanned with a smartphone in ads is also a good way of spreading word of a promotion, says Dawkins.

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Partnerships with larger retailers can also be very useful, he adds. An independent florist, he says as an example, could partner with an e-commerce site or even a major lingerie store’s Web site during Valentine’s Day to offer a promotion.

“Tone and content is extremely important,” adds Tran. “You need to find a voice.” User engagement is a huge part of Babybot’s branding efforts, he says. Even the boxes that the company ships products in include aspects of the branding.

In other words, your company’s social media “advertising” should be as dynamic and creative as possible. Babybot, for example, created an iPhone game where players can gain promotion codes by passing levels of a game. “It shouldn’t feel like reading a flyer,” he says.

Harmeet Singh is a Staff Writer at ITBusiness. Follow her on Twitter, and join the IT Business Facebook Page.

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