May 15, 2007, 12:00 AM

Independence is key to success in social shopping sites

Social shopping sites such as Kaboodle, ShopWiki, StyleFeeder and ThisNext are growing quickly. What sets off this explosion? Independence.

Social shopping sites such as Kaboodle, ShopWiki, StyleFeeder and ThisNext connect consumers and give rise to discussions and recommendations. Their number is growing quickly and so is the number of users. One of the key ingredients that set off this explosion is independence, analysts say.

For online shoppers, having a site independent of retailers on which they can network and chat has the potential to outshine retailer site-based consumer product reviews, says Kevin Ryan, CEO and co-founder of ShopWiki Corp., which receives between 100,000 and 200,000 unique visitors every month.

“People want independent advice and reviews,” Ryan says, “and they’re not getting that on comparison and other kinds of sites.”

Scanning social shopping sites, one quickly sees there are a great many users quite happy with the concept and the results. But shoppers aren’t the only ones with smiles on their faces.

“Retailers are very happy because they’re getting what amounts to free advertising,” Ryan says. “Thousands of products show up on our site, and shoppers are sent from those listings straight to an e-retailer’s site. It’s really no different from Google: Is a retailer happy to show up on Google for free? Yes.”

But with “free advertising” independently posted by shoppers unknown to merchants comes the risk of brand damage. This requires retailers to monitor social shopping sites and learn how best to participate, experts say.

“Retailers have to figure out how to engage with these communities,” says Kaboodle Inc. CEO Manish Chandra. “In ours, retailers can create profiles and interact. They need to declare in their profile they are a retailer, though, so users know a retailer is not pretending to be something else.”

Being honest and straightforward when addressing brand concerns is the best way to make an impact on a social shopping site, advises Jeremy Dalnes, vice president of e-commerce at Panasonic Corp. of North America, No. 158 in the Internet Retailer Top 500 Guide. “You should put yourself out there and make yourself available,” he says. “Many times consumers think you’re a large company and what will their individual voice do to make a difference. But when they see you respond, it creates affinity for your brand.”

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