Social shopping

I must admit that I have seen way too many social networking related plays that want to be the next MySpace of some niche market.  When asked about monetization the standard answer is they have a much more focused audience than MySpace with highly targeted CPMs.  Guess what, if MySpace is only monetizing a fraction of their visits, how can a tiny, little niche site scale to enough volume to make a meaningful business?  In addition, who wants to sign up for multiple social networking platforms like MySpace, Facebook, and niche sites for politics, sports, etc.  While there will always be a few dominant social networking sites, I firmly believe that we will see more and more social networking functionality get built and weaved into commerce sites and other ventures.  One of the reasons why eBay and Amazon have done so well is because of their respective communities and the ratings that are created by their customers.  Netflix does a great job as well by allowing you to sign up friends and track their recent movies and get recommendations based on your location.

The next step in this evolution of commerce will be social shopping or companies leveraging Citizen’s Media (blogs, podcasts, videocasts, tagging) to drive commerce.  According to, "Social Shopping is based on the principles outlined in the wisdom of crowds where a large group of users can recommend products to each other and between them work out what to buy and which ones have the most buzz."  I believe this is an interesting area that has not been fully tapped yet.  At the root of it, people want to connect.  Most people I know tend to check the Internet first to research a purchase and also ask friends for recommendations or reviews about products.  The more inefficient a market is, the more opportunity there is to educate consumers and peers leveraging the web. 

A great example is the wine market.  I am certainly no wine connoisseur, but I have been trying to learn more about it over the last two years.  Over time, I moved from an Excel spreadsheet to using the web to track some of my purchases and to learn more about each bottle.  One of my favorite sites is Cellartracker.  It leverages almost a wiki like concept so when I add a bottle of wine, it first searches its database to see if anyone else in the community has already input the data.  If it does, I can easily add a bottle to my virtual cellar and if not, I can add the data myself.  It already has over 3 million bottles of wines in its database so I did not have to do alot of work to get started.  It also has community reviews built into each input of wine so you can get recommendations for other bottles and figure out what others that have the same bottle as you have in their wine cellar. The downside is that the UI is not the prettiest and the site may be too flexible for the average user.  Cork’d is another example of social shopping – it allows you to catalog your wine, review and rate it, maintain a wish list, and subcribe to your friend’s wine lists.

One of my favorite examples of leveraging citizen’s media is Wine Library, which has one of the largest selection of wines and some of the best prices on the web. Gary Vaynerchuk, Director of Operations, really gets the web and has leveraged podcasts and videocasts to launch Wine Library TV, a wine video blog with daily updates.  If you haven’t checked it out, I suggest subscribing to his videocast and buying wine from his store.  I just had dinner with Gary tonight and it really blows my mind to hear how he helped take a small, family owned wine retailer based in New Jersey and leveraged the Internet to create a powerful wine retailer.  It is great to see Gary bring next generation web concepts to the under the radar world of wine retailing.  He especially understands how content can and does drive commerce for his company.  Every videocast drives sales and as you can see from his site, he has built a pretty loyal following in a short period of time.  He has a pretty sizable subrscriber base and uses RSS, tagging, and comments effectively to  build a community around his videocasts.  Since Gary understands how powerful the web can be, I would not be surprised to see him becoming the Robert Parker for the web generation as he delivers his reviews and thoughts in a way that we get and can consume on the go on any device. The big difference will be that Gary can and will leverage the web and his community to rate the best wines versus relying solely on the fine taste of one person.  When speaking with Gary, it is also quite interesting to hear him talk about Wine Library as a content and social networking site as much as an ecommerce player.  In the future, Gary plans on delivering alot more functionality on his site allowing his users to instantly add any purchase to their own virtual wine cellar, take notes on the wine, and share recommendations with their friends or the public.  In my mind, this is a great example of how powerful social networking and blogging concepts can be for ecommerce plays. It has allowed Gary to build a stronger brand, acquire new customers virally, improve his conversion rates from web marketing, sell more wine, and ultimately boost his profitability per new customer (lower acquisition costs + increased sales).  Given some of these benefits, I truly believe that social shopping will become a big thing in the next few years.

Published by Ed Sim

founder boldstart ventures, over 20 years experience seeding and leading first rounds in enterprise startups, @boldstartvc, googlization of IT, SaaS 3.0, security, smart data; cherish family time + enjoy lacrosse + hockey

16 comments on “Social shopping”

  1. Gary Vaynerchuk won’t become the Robert Parker for our generation, and not because of the quality of his opinions. Wine buying is about tasting, and tasting happens at friend’s homes and at local wine retailers. As local retailers catch on, look to them to build local social networks around those that come taste and become local arbiters of taste and purchasing decisions.

  2. Ed —
    Great post! The question is will the sites themselves host these social services or will services emerge that can cross different commerce sites in same sector?

    My bet is these will become web services which smart commerce sites will use to leverage scale they can never get on their own — and the web retailers who first realize how they can effectively partner with these networks will benefit first as in your example.

    I think the old model of a closed commerce community only avail to your customers if over.

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  4. Excellent a consumer no body will want to create/maintain “n” number of social aspects for every thing like social network for wine testing, for jobs, for travel, etc

    Therefore it is sure that there will be some sort of “hub” or web service API enabling community sites to make use of social network aspects.

  5. The wine industry really needs this type of approach to wine validation. The Parker approach is broken for a couple reasons mostly the reason that wine is experienced with friends and family not rated on a point scale which may not mean the same thing to everyone. I personally ignore the rating scale since it limits the ratings to well known vineyards and wines that are easy to drink with not a lot of substance to them.

    My view is I would rather get an opinion from someone that likes similar wine and not from a point rating. It cheapens the wine.

    Off the soap box on wine now, since most of the services for communities are based on RSS feeds it wouldn’t be that hard to create a central point of where you can view all of your information and have a certain provider of content by category.

    Send me an email if your interested in something like this.

  6. I agree with the above post that wine is an individual experience best explored with people close to you rather than a weak socially linked online experience.

    Having said that try a ’98 Chateau Musar from Lebanon…due to the american centric fascination with Californian wines (people can’t be bothered to learn about other cultures) these types of beauties are still reasonably priced if you can find them around!

  7. Great article and very relevant to the site we launched this week – – a social wine site where you can rate, tag, review wines and share them with friends and family.

    What Gary Vaynerchuk is doing with his videocasts is great – really making wine accessible to people – making wine fun!



  8. Gary is the best..He was the first to take a chance on my Monet’s Palate 2004 Cab even before Spago decided to put it on their menu. He is a amazing and I am happy to be counted among his loyal Vayniaks – Aileen Bordman

  9. Really interesting article, in many ways I’m surprised social shopping hasn’t caught on in a bigger way yet. I think sites like and kaboodle have done a lot to raise the profile of social shopping and one site I have just found, encourages participation by letting users make money from their product recommendations. Do you think social shopping sites like these will be ultimately successful and hit the mainstream anytime soon?

  10. could be of interest to you. It is a new startup launched on sept 8th at the techcrunch50. It is a social shopping portal with a unique patent pending feature called pKaboo!

    pKaboo! enables gift givers to anonymously find out the recipient’s current interests, hobbies or perfect gift ideas. The giver’s identity is disclosed to the recipient by myfavz on the day of the event, thus maintaning the element of surprise which is so crucial to the ritual of gifting.

    Let me know your views on myfavz

    founder / CEO

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