Social Shopping Is the New Mall for Electronic Commerce

Many entrepreneurs are attempting to recreate the shopping mall experience online in what is generally known as “social shopping.” Internet retailers such as Amazon, eBay, and Etsy have made shopping online easy for large and small sellers. However, retailers are looking to make their sites more social, and create new opportunities. Startups are receiving venture funding, and established companies are adopting their own social features.

“The social shopping sites essentially compile stylish goods of similar sensibility from shops around the Web, and make it easy to share with friends what items they like and buy,” explains The New York Times. “Most of the sites have adopted the interface of pinning images on a virtual bulletin board popularized by Pinterest, one of the most popular social networks.”

“The current state of commerce is very fragmented,” says Deena Varshavskaya, founder and chief executive of the social shopping site Wanelo. “Stores expect you to discover their site on your own and know what’s relevant and interesting.”

Many social shopping sites, such as Polyvore, Svpply, Fancy, Fab, and Wantworthy, are online versions of a bazaar, allowing users to browse for goods. Most let their users find and follow their friends and favorite brands, and create Instagram, Twitter or Facebook feeds of what they buy or want.

While earlier e-commerce sites with social features had mixed results, recent social shopping sites are designed to appeal to younger shoppers who prefer to see what is trending among friends and others with similar tastes, says Gene Alvarez, an analyst at Gartner.

Wanelo is an example of a once struggling company that has later raised $11 million, placing the company’s value at $100 million. The site has more than 100 million members (mostly women and teenagers), with more than 200,000 participating companies and brands.

Several other shopping sites have also attracted venture funding, such as Fancy, a type of crowdsourced wish list of things online that are on sale. The company raised $53 million in July from American Express and actor Will Smith.

Major companies are interested in social shopping. Amazon recently introduced Amazon Collections that allows users to see what others have liked, saved to a wish list or recently purchased. Last September, eBay purchased Svpply. Pinterest, the inspiration for many social shopping sites, has debuted its “Rich Pins” that lets sellers include details about where and how to buy items on the site.

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