There’s a wonderful, iconic statistic — seemingly unsupported by anything as trivial as hard data — claiming that “70-75% of all purchase decisions are made by the shopper as he or she is actually walking around and shopping”. It’s a figure we’ve seen bandied about many times, largely by those promoting Point Of Purchase marketing solutions.
A related figure, this one supported by a US study by the Prime Consulting Group, concludes that “at-retail advertising drove additional sales 70% of the time”. That strikes us as significantly more credible, as long as you broaden the definition of “at-retail advertising” to include price-tags, packaging and all the normal tools of the retail trade.
Whatever the numbers, however, one thing is clear: there’s a serendipity factor involved. Shoppers come into a store to buy Product X but happen upon Product Y and add it to their list. Retailers can afford to promote loss leaders (and indulge in other expensive promotional tactics) because they count on and budget for this effect.
Ecommerce operators try hard to trigger the serendipity scenario, but it ain’t that easy. Even Amazon.com, masters of the “people who bought this also bought …” software, struggle to interest destination shoppers in peripheral opportunities.
Enter the social shopping networks. As reported in the New York Times, sites like ThisNext.com, Kaboodle.com, Wists.com and StyleHive.com are spearheading a new category of e-commerce called “social shopping,” that tries to combine two favourite online activities: shopping and social networking. The sites are hoping to ride the MySpace wave by gathering people in one place to swap shopping ideas.
How does it work? Users who register with social shopping services typically create their own pages to collect information on items they find. But instead of simply describing what they have found on other sites and posting a Web address, they can download a piece of software that allows them to grab images of those products to post on their own shopping lists.
In effect, these social shopping networks are trying to harness the “recommendation engines” of early adopters, to create a network of influencers who do the product finding and then bring their choices to the attention of the community at large. The result might be more compelling if they weren’t so blatantly commercial in their intentions — the sites expect to generate revenue through a mixture of context-sensitive advertising and sales commissions.
We suspect that the current crop of startups will struggle to sustain a user base — who wants to be a shill for others to exploit? But somewhere in a garage in cyberspace there’s bound to be an idealist who’ll take the concept and make it work — accidentally creating a very valuable property while serving the greater good.
Serendipity in more ways than one.