Combine the concerns of a nation in recession with the social networking phenomenon and we have a whole new online trend: Social Shopping.

Introduction

As the credit crunch takes hold and consumers feel the pinch, savvy shoppers have been turning to online in their droves not just to purchase but to seek advice and sharing tips with each other whilst shopping. Consumers aren't just looking for the cheapest bargains, they are increasingly looking for reassurance and solutions. This isn't just looking at user reviews. This is the online world's equivalent of having a natter with shoppers on the high street and pointing out which stores to go in.

There's clear evidence of this from Neilson's Blogpulse which show how consumers flocked to blogs to find money saving guidance leading up to Christmas.

This represents the emergence of a new form of online behaviour. Consumers have for a long time been using forums and blogs to share opinions among a like-minded community. However, due to today's economic uncertainties and pressures, people are beginning to use social media to find and share 'smart buys'. This is more than just consumer generated reviews - this is 'social shopping'.

Social shopping is a method of e-commerce where people use the wisdom of the crowd to communicate and aggregate information about products, prices, and deals. Many social shopping sites allow users to create custom shopping lists and share them with friends, either people they already know or those they've met and whose product recommendations they trust. This is social shopping's USP. Consumers are becoming increasingly distrusting of user reviews. However, a review from like-minded individuals carries far more weight.

The last couple of years have seen several social shopping sites launch. Their growth has been gentle so far but we believe the recession will provide the stimulus for these sites to feature prominently in the immediate future.

Among a number of different social shopping sites are Kaboodle and Skimbit. Kaboodle's shopping tools allow people to organize their shopping through lists, discover new things from people with similar style, get discounts on popular products and find best prices. Kaboodle was launched in 2005 and has 400,000 registered users and over 4 million monthly visitors.

Skimbit allows you to compare a number of products on different sites, ask for friend opinion and use community ratings.

The economic downturn has undoubtedly presented significant challenges but with this emerging channel will come opportunities for retailers. Many of these sites have been designed with advertising in mind. Kaboodle was recently acquired by Hearst Digital, an international media owner, so opportunities exist to promote products through these sites.

Critically, it is not just IT geeks and teenagers who've been adopting these new websites. Housewives are set to be the main drivers of social shopping as pressure increases to cut back on household expenditure. And this audience are no stranger to online!

According to Touchpoints the heaviest consumers of daytime TV are also the heaviest consumers of the daytime internet. 84% of this audience are main-shoppers and they regularly watch 5.8 hours of TV and surf for 2.4 hours every day.

Consumer behaviour has changed and brands who can meet current and emerging needs will profit. As consumers use online to talk about their pressures and exchanging tips on saving money it gives brands the opportunity to drive consumer loyalty by listening to what they're saying and giving them what they need.

Buzz monitoring tools can be used to identify consumer sentiment. We're advising clients to use these tools to understand the kinds of pressures their audience are under and the kind of products they are seeking and advocating. By doing this advertisers can create propositions that really meet consumer needs.

These offers can be promoted online by seeding them in social shopping sites, by identifying the most influential online commenter's and telling them about these amazing offers. Brands can help them spread the word by giving them free merchandise to use. And word of mouth can be enabled by creating e-vouchers and material for people to share.

We believe social shopping will emerge as a key trend across 2009. As consumers increasingly seek out bargains and money saving tips online, advertisers can improve their brand empathy as well as driving sales by providing consumer centric solutions.

A thought piece by Gavin Reeder, Head of Digital Strategy

© 2009 Arena BLM