September 27, 2013, 9:00 AM

A shopping-focused social network tries a new sales formula

Consumers viewing product pages on OpenSky have a 10.5% conversion rate.

Lead Photo

OpenSky CEO John Caplan

When a consumer visits the shopping-focused social network OpenSky.com, she’s looking to browse or buy online, says John Caplan, founder and CEO of the social network’s parent company The OpenSky Project Inc. That’s different from Facebook, Twitter and even Pinterest, where consumers have other objectives, such as catching up with old friends or finding wedding-planning inspirations, he says. 

That difference explains why the conversion rate for consumers who view products on OpenSky is about 10.5%, a rate higher than all but 10 retailers in Internet Retailer’s 2013 Top 500 Guide.

The social network, which has nearly 600,000 monthly active users, lets retailers create an account on the site, post products and sell to the site’s users directly on the platform. When a retailer posts to OpenSky, he can click a button to also share the post on Facebook and Twitter. About 3,300 merchants actively post to OpenSky.

Consumers on the platform can follow merchants, as well as other shoppers. When a user logs in to the site she sees a feed that shows updates from those she follows. When a shopper clicks on a brand’s post, she is taken to a product page where she can complete her purchase with a click.

OpenSky takes a 20% commission on each sale made on its platform, except when the retailer recruited the shopper to join the platform, in which case it doesn’t pay a commission on any of that consumer’s purchases. That means that if a retailer, say Jan’s Jeans, posted a note on Facebook encouraging shoppers to join OpenSky and a shopper named Dean clicks on that post and joins the social network, Jan’s doesn’t pay a commission whenever Dean buys from the retailer on OpenSky.

“That’s why we’re always trying to get people to join OpenSky,” says Angela Parker-Kennedy, designer and owner of Olive Yew Jewelry, which sells on OpenSky, Etsy and about nine other online marketplaces, as well as its own e-commerce site OliveYew.com.

Olive Yew has more than 14,600 followers on OpenSky, more than double its roughly 6,500 Facebook fans.
To drive sales, Olive Yew posts on OpenSky several times a day to highlight its products, says Parker-Kennedy.

The retailer regularly cycles its products on and off the platform; it typically has about 50 of its 189 pieces on the site at any one time.

“That enables us to switch out the products to keep things interesting,” she says.

OpenSky, she says, accounts for about 15% of the retailer’s orders. However, around the holidays that percentage can surge as high as 50% because it heavily promotes items on OpenSky, while also sharing those posts on Facebook and Twitter.

Olive Yew’s sales show the platform works, says OpenSky’s Caplan.

“The Holy Grail of social marketing has been getting the conversion,” says Caplan, who will be talking about retailing’s evolution in a keynote presentation next week at Shop.org’s Annual Summit in Chicago. “That’s what we’re seeking to address.”

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