You can make a safe assumption that the reason I am visiting your online store is because I have an intention to buy something from you. All I need from you is to help me find what I am looking for and then take me from point A (Product Page) to point B (checkout). I am ready to fork over my money if you show me a clear path! So it is up to you to decide how easy or difficult you want my journey to be. Need a few tips? Here are few ideas to consider:

1. Do not force me to register during the checkout process. If I click on checkout, that is usually a safe assumption that I have made a decision to purchase. Please get out of my way so you can take my money as quickly as possible before I change my mind. Don’t present me with unnecessary registration steps or other information that would slow me down. If you want to give me an option to register after the checkout is complete, sure I will consider it.
   
2. Remember that Google is not your target customer – I am. Don’t write your product descriptions or other content containing tons of SEO keywords with a sole purpose to please Google. Sure you need to focus on SEO but the product description has to make sense to customers first. At the end of the day, you might get a good ranking on Google but if consumers don’t understand the content on your site, you will not win.
   
3. Don’t let me add something to the cart if later you will tell me that it is out of stock. If you already know that something is out of stock, can you please show that upfront on the product page so we don’t waste each other’s time?
   
4. Do you have categories which do not have any products online? Can you please disable those categories so that I don’t have to click those categories, just to find a “No Products Found” message?
   
5. Just because you have a lot of promotions and products on your site, you don’t have to show all of them on your homepage!! Please keep the homepage clean and focus only on few key promotional or merchandise messages that truly tell a compelling story. If you have more than 100 links on your homepage, you are trying too hard!
   
6. It would be nice to know when I will receive an item – not just when you plan to ship it. You know my zip code – you know the delivery times with UPS and FedEx, you know your processing time – so can you please show me a date when I should expect to see the item at my door instead of having me do all guesswork in my head?
   
7. If I add something to the shopping cart, please show me the cart before showing any other recommendations or offers that I might be interested in. Don’t slow me down by showing 10 recommendations before I get to my cart page. I have a short attention span and if I get overwhelmed with too much unnecessary information, I might just leave.
   
8. If you take my email address during checkout, please make good use of it! For example, if would be nice of you to follow up few days later to check if the item arrived properly, and if I would be interested in writing a review for the item. I don’t mind writing an honest review – you just have to ask and remind me! Which is a good segue to the next point.
   
9. If I write a negative review about a product, please don’t go out of way to “moderate” the review to put a positive spin to my content. Please remember that customer reviews are supposed to be “unbiased” and any attempt from your side to hide or suppress the negative reviews is a sure way to lose trust with your loyal customers.
   
10. Don’t wait until the final step in the checkout to show me the final price including the coupon discounts, taxes and shipping costs. I would like to know that information at the shopping cart page so there are no surprises during the final step. If you need my zip code in the shopping cart page to calculate these costs, just ask me and I will be happy to provide that information to you. Which leads me to the next point –
    
11. If I have told you anything about myself such as my zip code, please try to remember it. Don’t make me re-enter that information at the time of checkout. There is a good probability that I will not change that information, but just give me an option to change it later if I need to.
    
12. Please don’t try to hide your contact information just because you want to minimize the number of customer service calls. If you have an 800 number hidden somewhere on the site, please display it prominently. Customers need to know upfront that there is an easy way to contact you if something goes wrong with their order.
    
13. When I am providing my credit card information, you really don’t have to ask me what type of credit card it is because you can figure it out from my credit card number. Just show me the credit card type for confirmation and I will let you know if there is a problem.
    
14. While you are thinking about that checkout experience, can you also do something about that Captcha! It is nice to know that you are concerned about our security and want to make sure that I am a human. But for the sake of humanity, please don’t make me decipher that 10 characters Captcha image. Just try to keep it simple, if possible.
    
15. If you display any AdSense ads on your retail store, can you please turn those off? That sends a mixed message to me as a customer. If you are truly an online retailer, your focus should be on selling products, not making a few bucks from customers who accidentally click on those ads and end up somewhere else.
    

Some of the above points may seem very obvious but it is amazing to see even large online retailers who end up building complex checkout processes, overlooking some of these points just because they have a “complex” business. If you think from customer’s perspective, they really don’t care about complexities in business – they are looking for a simple and intuitive shopping experience.

New York, 2010: It is 11:30pm and Sally is looking to buy a new dress for the upcoming Christmas party. She logs on to Looklet.com, picks up a dress and matching shoes and saves the new look in her profile. She gets prompted by Looklet if she would like to get an opinion from her friends. Looklet displays all her online Facebook friends via Facebook connect . Sally sees that her best friends Nancy and Tina are still online and invites them to give an opinion on the new look. They are able to chat and view the products in real time. Both Nancy and Tina love the new dress but aren’t too crazy about the new shoes. Sally is able to find other “Fashion Experts” on Looklet who have favorited the same dress – and she is able to find better shoes based upon recommendations from those experts.

Welcome to a new phenomenon in online retailing – “Social Shopping”. This term has been used more and more in the past few months to describe the future of online shopping. Although the above two examples are not yet real but several pieces of these concepts are already in action at several online retailers. Given all this hype around social shopping, I thought it would be good to talk about some of the practical examples where online retailers can start thinking about implementing some of these concepts on their platforms.

The Progression of Social Web

If we think about the progression of social web, it has significantly evolved over last few years. It started out “Relationship based” where people could just connect with others and stay in touch. Then it evolved into an open medium where the social platforms took the role of an operating system allowing third party applications to enable significantly richer social interactions among people . Now, it has evolved even further where all interactions are context based (think Facebook News Feed) where users only see information and conversations in the context they are interested in. The next logical step in this evolution is to allow sharing of products and services within the social context so that users can turn to their friends and trusted experts for advice on buying products.

For those who think social shopping is just a fad, consider this–What makes a great product recommendation? Is it the number of strangers who recommend something or is it the person who recommends it that matters most? In other words, if you are asked to chose between a book on Amazon that is rated 5 stars by 10 strangers and another book highly recommended by a close friend who has very similar tastes and background as you – which book are you more likely to buy? If the answer is latter, then you believe in the power of social shopping. The only thing needed is a platform which helps you listen to your trusted friend’s and follower’s recommendations in a structured format. Facebook Connect is the first step that would make these interactions possible in a meaningful way. Still not convinced? Let’s hear what our friends from Nielson say –

“Recommendations by personal acquaintances and opinions posted by consumers online are the most trusted forms of advertising globally, according to the latest twice yearly Nielsen Global Online Consumer Survey. The Nielsen survey, the largest of its kind, shows that nine in every ten Internet consumers worldwide (90 percent) trust recommendations from people they know, while seven in every ten (70 percent) trust consumer opinions posted online”

Ok – enough about general ideas and numbers. Let’s look at specific opportunities that are likely to shape up the social shopping landscape in the coming months and years:

Key Opportunities in Social Shopping

Opportunity 1: Product Discovery (Help me find a good product)

This is where most of the action is today. If you think about most of the social shopping sites today such as Kaboodle or Stylehive, they allow users to follow other experts and discover new products every day.

The key tools to make this concept are following:

1. Product Experts – There needs to be a notion of unbiased product experts who have authority in various categories. These experts have ability to share products that others will discover. The key aspect is that these experts need to be recruited by the online community using some sort of unbiased reputation/ point system. This leads to my second point.
2. Reputation Management – Experts earn reputation based upon the quality of their contributions to the online community. This needs to follow a democratic process where users vote for expert’s contribution and based upon pre-determined eligibility criteria, certain users are able to earn an “Expert” or “Guru” status in specific categories.
3. Online Profile – Ability to know about the tastes, preferences and the products currently owned by an individual would allow platforms to better connect individuals with each other based upon their common interests. I think this is a critical step in a successful social shopping platform because it would make all shopping related interactions context sensitive. Imagine logging into Facebook and seeing News feeds from all Facebook users at the same time! Facebook has allowed users to customize the context around their own friends – similarly the social shopping sites should allow the users to customize the context around other “experts” and individuals who have common tastes.

Opportunity 2: Product Selection (Help me pick between the products that I like)

This is the next step of the purchase process. Once the user has discovered a few products, they need to select which one would be the best match for them. Whether it is a dress or a pair of shoes or a gift for a co-worker, a lot of times people look at their trusted advisors or friends to select a product. Technology has now evolved such that social shopping platforms can now enable these interactions. Following are the key components that will act as the technology foundation of this aspect:

1. Facebook Connect – In my mind, in the short history of social shopping, Facebook connect is the most powerful development that will help take the concept of social shopping to mainstream. For those who are not aware what Facebook connect is, it is a powerful set of APIs for developers that lets users bring their identity and connections everywhere

So what’s the big deal? Well, this would allow users to take their friends along with them for shopping. Shopping online, that is. With Facebook connect, the shopping platforms now have the capability to allow interactions across the 300 million users who are currently on Facebook. I have some examples later that illustrate the practical implementations of Facebook connect in a social shopping context.

2. Google Wave

For those who don’t know what Google Wave is – here is a great2 minutes illustration of what it can do.

Now you might think that this looks slick for email communication but what does it have to do with shopping. Well – given that the API is open for developers, the opportunities are endless. For example – an Outdoor apparel retailer could allow customers to connect with each other via Google Wave and share their pictures of favorite Ski Vacations, showcasing all the products purchased at the online retailer. The opportunities are endless – the key thing is that Google Wave is a revolutionary product that opens up new way of communication and collaboration which could be easily applied to social shopping to connect individuals with common tastes and interests.

So what are some of the retailers doing in the collaboration and product selection space? Here are some real life examples where the concept of social shopping is already advancing to the next level:

1. My Zappos: Users are able to add items to their closet, and can then invite their friends from Facebook or Twitter to help select the best product. After registering, you can get introduced to groups with similar interests, such as Zappos Golf, Zappos Beauty, etc. Consumers can create shopping lists of items they want, have or like. Friends can tell them what they think and/or suggest new “stuff” for them. In the past when you shopped online, it was a lonely experience. With My.Zappos, consumers can shop together and have their “best friends” give them feedback.

2. Jansport has done something similar where prospective customers invite friends from Facebook (using Facebook Connect) to shop with them; then share comments and ratings conveniently—without a need to leave Jansport.com. Shoppers are able to converse freely with those whose opinions matter the most: their friends and family. Purchase validation can be achieved without interruption.

3. Apparel retailer Charlotte Russe has also implemented a “Shop Together” concept. Users can invite their friends to simultaneously shop the latest styles. Friends can view, compare, chat about and create a “favorites’ list of items together. This allows online customers to share synchronized shopping sessions with friends and family.

4. Vans.com has taken the concept of social shopping to customizable products. Shoppers can now invite friends to help design their customized sneakers. The collaborative-shopping technology allows consumers building custom shoes online to chat with friends in real time about the product design. Click on a link saying, “Invite friends to design with you,” and access friends through AIM, e-mail or any other service a link can be sent through. Assuming the friend is also at a computer, she can join a chat on the Vans site to give a thumbs up or down on the design, as well as make her own suggestions.

Opportunity 3: From Affiliate marketing to Social Marketing

The concept of Affiliate marketing has been quite successful for online retailers to drive sales to their portals. I think affiliate marketing will continue to be one of the important marketing channels – but we shouldn’t underestimate the potential of Word of mouth marketing that is possible at social platforms such as Facebook and Twitter. Out of 300 million users on Facebook, approximately half of them log in to their account every day – according to Facebook more than 6 billion minutes are spent on Facebook everyday. If these users are able to recommend products to their friends, resulting in a sale at an online retailer, this opens up a new marketing opportunity – some people call this social affiliate marketing. If the retailers are able to figure out an incentive structure to reward individuals who share products with their friends that eventually lead to a sale, the opportunities are limitless. Keep in mind there is a fine ethical line between sharing “authentic recommendations” with friends, vs. paying individuals to become social advertisers. In addition, FTC has issued guidelines (albeit vague) that would require users to disclose the association with a retailer if they are getting paid for driving sales. As marketers continue to over-do influencer outreach – trying to capture the attention of influencers like mom bloggers and food bloggers such that they authentically talk about products – we can expect to see some simpler and more direct solutions to transparently engage those influencers as affiliate marketers. The benefit back to them is a percentage of sales – all very transparent, of course. The same concept could be applied to users on Facebook and Twitter. However, the incentives don’t always have to be monetary – they could also mean earning a better status/ reputation on the retailer’s online platform.

Although the scope of social shopping is fairly small today, the opportunities are significant. The opportunities are even greater for multi-channel retailers such as Target, Walmart and Sears in engaging the customers at stores and helping them connect with their online friends who can “virtually” shop with them in the store. I think it is time to start thinking about retailing in the context of people vs. products. At the end of the day, it is the social interactions and conversations that help drive a purchase decision. Therefore, the online retailers need to start thinking about opening up their platforms to allow people to have these types of two way interactions vs. focusing on one-way merchandising aspects of retailing.

Fast forward 5 years – enter the connected world! I recently visited MySears.com and was amazed at the community involvement! Even though you see customers occasionally venting about product issues and their experiences, what is really impressive is that Sears has taken a bold step to let it all out in the open. They have provided an online platform where Customers are free to post their experiences. This is bold because it demonstrates leadership as well as compassion that Sears not only cares about listening to their customers, they are also not afraid of letting customers openly talk about their experiences online, however negative they might be. Interestingly, there is a group “Sears Cares” that addresses the customer service issues posted on the website. I think this strategy will definitely pay off in the long run, as long as the customer issues are addressed in a timely fashion and there is a feedback loop where customers are then able to share how their issues were resolved. In today’s world when there are so many forums and discussion boards where customers can vent about their experience – why not invite them to your own backyard and address the issues head on! MySears also has a section for customers to submit new ideas, and vote on other submitted ideas. Although this level of transparency will definitely improve the level of trust across Sears’ customers, the question is – is this enough?

Multi-channel retailers such as Sears or Walgreens have been focusing on traditional retail for more than 100 years. Although I think it is impressive that retailers such as Sears are able to leverage the online channel to win back one customer at a time, this approach is still reactive. What is more critical is to change the mindset of every single employee in how they think about leveraging the online channel. In today’s world, retailers need to stop thinking about a one-way means to push messages and product assortment to the customers. No company can outsmart or beat the collective intelligence of millions of users even if they spend millions of dollars every month. The online channel offers means to harness this collective intelligence that can help in making the right decisions for the target customers. Everyone talks about it, and yet, when it comes to making decisions, those decisions are generally supported by internal executives’ intuition vs. objective data that is collected from the customers. All the money that is spent by the retailers in marketing campaigns, assortment planning, merchandise planning, product design, store signage – how many of these decisions are based upon real customer feedback at the ground level?

Perhaps it is time to reinvest some of these dollars in platforms where customers can help make these decisions. Perhaps it is time to put the customers in charge – if they matter the most, shouldn’t they be the ones helping make strategic decisions? Why are retailers not investing in building an online portal where customers can collaborate on what assortment to carry in the store? Where customers can vote on what kind of promotions to run in the store? Where customers can rate the performance of the store associates that they interacted with? Where customers can not only help design the marketing campaigns, they can also become part of driving these marketing campaigns? Where customers can participate in designing cool apparel outfits or voting on the designs submitted by others?

I can go on and on but at a broader level, I think there is a significant need and opportunity for retailers to start outsourcing (or “crowdsourcing”) their internal decision-making to their own customers. The concept of Crowdsourcing has been around for few years now and yet only a few businesses have been able to take true advantage of the power of online communities. Multi-channel retailers stand to gain most from the power and wisdom of communities – learning from the customers using the online channels, and applying those ideas in the stores. Yes, it will require some sort of incentive to get the customers to participate in these kinds of communities. It is, however, amazing to see how eager customers are to participate and collaborate as long as their voice is heard and as long as they are able to achieve some sort of reputation/ expert status in the online community.

There are several retailers who make sure every new corporate employee in the company spends few days in a store when they start. I think the companies should also make sure that every corporate employee spends one week understanding the customer analytics that are being collected from the online channel. Every decision should be supported by some objective information that was collected by the online channel. I am not promoting the online channel just because I am biased. In this day and age, especially in a struggling economy, every single dollar that is leaving the company should be based upon a true customer insight – and the online channel offers a perfect means to not only capture those insights but also engage the customers in testing the ideas at a significantly cheaper cost.

An excellent example of leveraging the community in product design is Threadless.com – a web-based startup launched in 2000, which has become a poster child for how customers can actually create a company. Threadless sells t-shirts, but it does not design them. That’s up to its customers, who submit designs and stand to win small prizes if their submissions end up on a product. Then there is Polyvore, where people can combine fashion pieces into outfits they call “sets.” The interesting thing about fashion is that no item really stands alone — they are always combined into outfits. So instead of selling individual articles of clothing and accessories as most retailers do, combine them into outfits. And better yet, let customers do the creative work and then decide which outfits are most popular. The concept of crowdsourcing is now slowly being adopted by traditional companies. Whether it is My Starbucks Idea or Dell’s IdeaStorm or P&G’s Collect and Develop or Campbell’s Ideas for innovation, they all have one thing in common – they believe in the value of customer involvement in product design, and they have begun using the online channel to collect insights that would have been almost impossible to collect in the past.

What Sears has done is a good starting point – and is certainly more than what other “successful” retailers have done so far. Case in point – Target which still believes that the online channel is just another channel to drive sales therefore they don’t see any downside in outsourcing their entire online channel to Amazon. Wait a minute – did I just read that Target announced to end its pact with Amazon and build its own online presence? There are signs everywhere that multi-channel retailers are now seeing the online channel as something more strategic than just a revenue opportunity. However, I am rooting for the under-dogs like Sears who have recognized the strategic value of online channels and taken initial steps in directly engaging their customers. The true winners will however be the retailers who implement practical means to collect meaningful insights directly from their customers and then reform their internal processes to make and evaluate all tactical and strategic decisions based upon these insights.

I’ve been following the US and India eCommerce industry very closely during the last several years.  I have met quite a few talented individuals who are either in the process of or have already built a good online offering. However, I feel there is still a huge opportunity to take the online shopping to the next level and this may be just the right timing to go after that opportunity.

I have now decided to focus on building a next generation shopping portal for US and India market that combines the power of communities, user content as well as product customization in a game-changing way. I am looking forward to the journey over the next several months and I will be sure to post new learnings and insights in this blog as time goes by. Although I feel confident about the opportunity and the timing, I also believe that any successful venture requires a great team with complementary skills and a passion to win! I am in the early stages of building the team of individuals who will support this venture.

I am thinking of building a small team initially that will eventually expand as the idea scales. So if you are an amazing User Experience/Creative individual or if you are an expert in open source technologies such as Ruby on Rails or if you have strong experience in product/merchandising (especially customizable products) but most importantly, if you have the passion and desire to do something big in the eCommerce space – I would love to hear from you.

These are the initial signs of what is changing in the digital world. Information created by users is following them from one site to another. This is particularly timely now that the users have started feeling the “network fatigue” that comes from maintaining multiple social-networking profiles, e-mail accounts, blogs, address book applications and the like. Things are changing, really changing in the social web. Initiatives such as Dataportability group are all about making the web more free flowing in terms of user data – most of the key players such as Google, Facebook, Microsoft and Yahoo have already signed up. If things pan out the way they are intended by the Dataportability initiative, the user’s data can almost flow like a river across various social destinations as opposed to being locked in the confines of individual sites scattered in an unmanageable forest. This video does a great job of explaining what Dataportability initiative is all about. Until now, we have seen the social networking sites as the hubs and the users as their spokes. By making the data portable, the scenario will change – the users will become the hubs and the social sites will be spokes – users getting full access and control of the data they create on these social sites and they can take it anywhere they go.

This is exciting – however, it does raise some questions. If the data becomes so easily portable, will the social networking sites lose some of their competitive advantage, because the switching costs for users will get significantly smaller? Even in the case of Facebook, one of the key competitive advantages is the “social graph” – which means the network of connections and relationships between people on Facebook. Only future will tell if this will have a negative impact on some of the existing social networking sites, but one thing is clear – Social sites that just rely on “data lock-in” as the only competitive advantage will have to think harder about creating better products for users.

This is good news for the Indian context. Good, because it is still too early and there is only a handful of social networks in India that have seen meaningful adoption. This opens up various opportunities where new web 2.0 ventures can be built to ride on already established social graphs such as Orkut to offer unique capabilities for the Indian community. Now I am not saying that this will result in an increased adoption of the social networks in India – most of the barriers to internet and web 2.0 adoption in India still remain. However, I do believe that if you offer unique capabilities that add value for the Indian community, it will be much easier to bring people into your network because of data portability – riding on an already established social network is a lot easier to build one from scratch.

So what are some of the strategies to improve the likelihood of success for new or existing social networking ventures in India? The first and foremost, in my opinion, is to open up your “walled garden”. In other words, if you already run a social networking site or if you are intending on building a new one, you should make it easy for your users to take their data with them if they decide to move to a different platform. Ok, this does sound bad, after-all we are in the business of protecting our user base as opposed to giving it away. Now, I am not suggesting that we should start promoting the competitors on our site – all I am saying is that the user should come to your site ,not because he or she is “locked in”, but because they see something of value that they don’t see elsewhere. On the other hand, if they see that they have the option to easily move to a different platform in future, they might in fact contribute more content to your site. This is because they see less concerned about the risk of losing all their hard work associated with content contribution, in case a better platform becomes available tomorrow. Having said that, this does raise the stakes for your business. This means that remaining competitive will be more about proactively understanding what the customer is looking for, and offering products and capabilities that remain unique in the marketplace. Easier said than done, but it is possible – and besides, isn’t that what being on the edge is all about!

Another shift in focus should be from acquiring the user to retaining the user. It is always good to focus on building the site’s user base, and establishing some goals around where it needs to go. We have started to see a lot of stories and celebrations even in India for web 2.0 portals reaching a certain user base – like this one from BigAdda . Nothing wrong with that, infact it is good to see the Indian web 2.0 portals reaching a decent amount of scale. However, what is generally not talked about is how many of those users come back for the second time. It is easy to acquire new users (expensive, but easy). However, the real question is how many of those users stick around to contribute something to the social network. Isn’t that what defines a social network? I am not saying size doesn’t matter – however, in the end what makes a social network successful is how actively communities are participating in that network. Therefore, it is more important to think about what would make the user come back for the second time. That’s because there are a lot of reasons a user would have landed up on your portal for the first time –by advertising, by word of mouth or simply by accident. However, there is only one reason for users to come back for a second time – they see something of value that is worth their time.

Ok, so we open up the “walled garden” and we build some capabilities that make the user come back for the second time. How do we make the user stick and build a long term relationship with us? Is there any way to still “lock-in” the user for the lack of better words? The one way I believe we can still keep the users from switching is by offering some kinds of phased incentive program. I am not suggesting that we offer users monetary incentive to stick around – even incentives such as a better social status on the site as the users make more contributions will make it less attractive for them to switch to a different platform. Even if the users can easily carry their own data or content to other platforms, they may not be able to take the social status that they achieved on the current platform. There are a lot of sites which promote users to “Experts” or “Style leaders” and depending upon the context of the social network, some of these incentives can help maintain the stickiness with the platform.

I do think that initiatives such as DataPortability will eventually change the dynamics of online businesses – and will actually create significant new opportunities especially in the social networking space. However, there is an active debate going on about the pros and cons of DataPortability – especially concerns related to data privacy and security which I didn’t cover in this article. It is perfectly ok if you disagree with above view points, as long as you don’t post your comments on this blog! Ok, that was bad joke! I would in fact be very interested in your comments, especially if you disagree! Because having a balanced discussion on this trend will actually help establish the real opportunities.