1. Social Shopping: Concepts, Benefits, and Models
Chapter 6
Social Shopping:
Concepts, Benefits, and Models

2. Learning Objectives Describe social shopping and discuss its drivers.
Describe the framework for social shopping, its major participants, its components, and various models.
Define group buying and flash sales and explain how they work together.
Describe shopping together, shopping communities, and shopping clubs.
Describe social recommendations, marketplaces, and other shopping aids.
Provide examples of other innovative shopping models.
Discuss shopping for virtual goods.

3. Opening Case: Groupon— Will the Company Prosper?
The Opportunity
Groupon is a start-up that offers special highly discounted deals, mostly via
The Solution
Groupon is basically a flash (daily or longer) discount deal business and an operator of a marketplace
The reason merchants are willing to offer a 50% to 90% discount to volume shoppers is that the merchants’ marketing and overhead costs are lower, while their market share increases due to the attraction of new customers

4. Figure 6.1 The Business Model and Process of Groupon

5. Opening Case: Groupon— Will the Company Prosper?
Benefits and Expansion
The major benefits to customers
Steep discounts (50% to 90%)
Discovery of new/specialized services and products
No need to search for deals; Groupon organizes them for you
The major benefits to merchants
Can sell larger quantities and liquidate merchandise.
Save on advertising and marketing expenses
Get repeat customers Lower customer acquisition cost.
Knowledge of, and collaboration with, vendors in a close geographical area

6. Opening Case: Groupon— Will the Company Prosper?
Limitations of the Model
Some of Groupon’s deals can become too large for vendors to fill
Some businesses may not make money on the deal and may possibly even suffer a loss
The Competition
Hundreds of Groupon clones exist
Factors in the Competition
Groupon still controls more than 50% of all daily deal markets

7. Opening Case: Groupon—Will the Company Prosper?
The Results
The company went public on November 4, 2011, raising $700 million
Groupon lost money until the first quarter of 2013
The share price slowly began recovering in late 2014

8. Lessons Learned from this Case
Groupon’s initial business model included group buying, which is a social activity
Later, it changed this model, concentrating instead on daily deals
Group buying is a powerful social shopping model but it is difficult to implement

9. Definitions, Drivers, Concepts, and Benefits of Social Shopping
The Drivers of Social Shopping
The large number of people visiting social networks attracts advertisers
Changing customers’ shopping habits
The increasing number of recommendations/suggestions made by friends and the ease and speed of accessing them
The pressure from top management to increase effectiveness and efforts to improve overall efficiency of marketing in general

10. Definitions, Drivers, Concepts, and Benefits of Social Shopping
Concepts and Content of Social Shopping
Where Is Social Shopping Done?
Video: “How to Create a Facebook Store Even If You Are a Beginner” at youtube.com/watch?v=UWRNVzXXYIM
Why Shoppers Go Social
Communal shopping*
People’s Roles in Social Commerce
Connectors
Salespeople
Seekers
Mavens
Self-sufficients
Unclassifieds

11. Definitions, Drivers, Concepts, and Benefits of Social Shopping
The Benefits of Social Shopping
Benefits to Buyers
Get super deals via group buying, daily specials, and more
Socialize while shopping and receive social support and rewards
Discover products/services you never knew existed
Interact directly with vendor (brand) representatives easily and quickly

12. Definitions, Drivers, Concepts, and Benefits of Social Shopping
Benefits to Sellers
Improve overall sales unit productivity
Increase revenue growth per customer
Gain feedback from new customers
Learn from customers
Increase customer loyalty and trust
Quickly liquidate overstocked or obsolete merchandise

13. Components and Models of Social Shopping
What Components to Expect in a Social Shopping Site
Visual Sharing
Online discussions
How to use products
Guides

14. Components and Models of Social Shopping
The Major Social Shopping Models
Traditional E-Commerce Sites with Social Media Additions

15. Figure 6.2 The Major Categories of Social Shopping
The heads are inconsistently set as cap/lc vs initial cap (i.e., Group Buying vs Shopping communities). Please make consistent one way or the other. Thanks.
Figure 6.2 The Major Categories of Social Shopping

16. Group Buying and Deal Purchasing
The group buying model describes a group of people who come together to get a quantity discount
Group Buying in China
How Group Buying Is Done in China
Group Buying and Flash Sales on Facebook
The Future of Group Buying
Deal Purchases (Flash Sales, Daily Deals)

17. Shopping Together: Communities and Clubs
Online Social Shopping Communities
Common Features in Communities and Forums
User forums
User galleries
Idea boards
Examples of Shopping Communities
Polyvore (polyvore.com)

18. Shopping Together: Communities and Clubs
Kaboodle -- A Unique Social Shopping Community
Some of Kaboodle’s Capabilities
Private Online Shopping Clubs and Retail by Invitation

19. Recommendations in Social Commerce
Social Shopping Aids: From Recommendations, Reviews, and Ratings to Marketplaces
Recommendations in Social Commerce
Ratings and Reviews
Social Recommendations and Referrals
Illustrative Examples of Recommendation Sites
crowdstorm.com
buzzillions.com
Concerns about Social Reviews and Recommendations

20. Other Shopping Aids and Services
Social Shopping Aids: From Recommendations, Reviews, and Ratings to Marketplaces
Other Shopping Aids and Services
Yelp: The Shoppers’ Best Helper
Collaborative Reviews
Filtering Consumer Reviews
Dealing with Complaints

21. Social Marketplaces and Direct Sales to Customers
Social Shopping Aids: From Recommendations, Reviews, and Ratings to Marketplaces
Social Marketplaces and Direct Sales to Customers
Social marketplace*
Examples of Social Marketplaces
craigslist.org
us.fotolia.com
flipsy.com
storenvy.com
shopsocially.com

22. Innovative Shopping Models and Sites and Virtual Goods
Examples of Innovative Social Shopping Ideas and Sites
Getting help from shoppers via TurnTo Networks
Find what your friends are buying
Wanelo
Additional Examples of Social Shopping
Helping Sellers and Bloggers Sell Products
Event Shopping

23. Innovative Shopping Models and Sites and Virtual Goods
Socially-Oriented Person to Person (P2P): Selling, Buying, Renting, or Bartering
P2P Lending
P2P Sharing (Also Known As Collaborative Consumption)
Facebook’s MyStartUp: Examples
“Wine Condom” Bottle Stopper
Divas Snow Gear

24. Innovative Shopping Models and Sites and Virtual Goods
Shopping without Leaving Facebook and Other Social Networks
Shopping for Virtual Goods in a Virtual Economy
Virtual goods*
Virtual economy*
Why People Buy Virtual Goods

25. Innovative Shopping Models and Sites and Virtual Goods
Real-Time Online Shopping
Auctions In Social Shopping
Tophatter
B2B Social Networking
Virtual Visual Shopping

26. Innovative Shopping Models and Sites and Virtual Goods
Social Shopping in the Near Future
Video: “The-Future-of-Shopping at youtube.com/watch?v=0VII-xdg5Ak&feature=related
Instagram Marketing
Facebook’s Plans
Twitter's Activities