Social Shopping & Recommendations

Source: WSJ, Dec 2010

Online retailers are experimenting with the idea that friends can make shopping easier.

Companies such as Amazon.com Inc. and Etsy Inc., a site that sells handmade and vintage goods, are making gift recommendations for individuals by tapping into the trove of comments and preferences collected by social-networking giant Facebook Inc.

The social-shopping efforts are all in an experimental phase, but the goal is to change how consumers discover and choose products—and increasing their likelihood to click on the buy button.

The latest retail efforts focus on using Facebook’s platform—where outside sites can tap into Facebook user information with their permission. Since last holiday season, more than half of the top 25 retail sites have integrated with Facebook’s platform, the company says.

Jason Davis, the lead scientist at Etsy who developed the tool, said some missteps are inevitable. “In the end, we offer users 10 or 20 recommendations, and if one isn’t good, you can look at another one,” he said.

The experiments reflect a recognition that e-commerce, while convenient, can’t match the experience of visiting stores with friends or family.

“This is a new frontier for personalization on retail sites,” said Jeffrey Grau, an e-commerce analyst at eMarketer Inc. “If a user is on a site to shop— as opposed to being on Facebook for a social experience—it catches them at a point where the retailer can increase conversions,” he said.

To be useful, recommendations need to tap just friends that have relevant opinions, said Darren Vengroff, the chief scientist at RichRelevance Inc., a firm that develops recommendations technology. “A lot of people have their mom as their friend on Facebook, but they don’t necessarily like the same kind of movies,” he said.

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