Online retailers will depend more and more on “word of mouse” – but is that good or bad?
Believe it or not, online shopping may be hitting its peak. This article reports that Internet sales climbed an amazing 24% to hit the $100 billion mark in 2006. Now the experts are saying that within four or five years, the sales gains will likely be only 4-5% per year. Why? Partly because everyone who is going to be shopping online probably already is. Which means that Internet retailers are scrambling to figure out how to increase their market share, or increase business with current customers.
One key opportunity which retailers are becoming more interested in is what I call “word of mouse.” Web sites and blogs like this one spread the word about good and bad shopping experiences, and help our fellow users find the best stuff.
Called mavens by The Tipping Point author Malcolm Gladwell, these are “inherently helpful” people who gather and share product and style information with their friends and social peer group. Their influential advice is spread to eight times as many people as the average person. So some retailers are trying to insinuate themselves into the social networks where these people hang out, including photo-sharing sites MySpace and YouTube. A study released by Yahoo! Inc. estimates 43-million people fit the description and influence $1-trillion in retail sales.
Here’s my take on this.
The tricky part for retailers will be how, when and were to “insinuate” themselves into social networks. We online shoppers are no dummies, and we know a blatant commercial when we see one (”Drink more ovaltine!? A lousy commercial!?”). We can also spot a fluffed up product review vs. an objective one, making it easy to see if a “maven” has been bought off. Social networks work because they are an open forum for sharing ideas and reviews, and as soon as they become overly commercial, we will find other places to hang out.
Online Shopping, Online Retailing, Social Networking
August 26th, 2009 at 11:19 am
When i take a look at your blog I just ask myself this: “How could i compete with THIS?” Awesome info and love your blog. Keep it up!