Avoiding A Threat To Social Networks

In this Aug. 11, 2009 photo, shoppers move through the aisles at Kohl's department store in Springfield, Ill. The Commerce Department said Aug. 13, retail sales fell 0.1 percent last month, a much worse performance than the 0.7 percent gain that economists had expected. (AP Photo/Seth Perlman) AP Photo/Seth Perlman

This column was written by Evan Schuman, the editor of StorefrontBacktalk.com, a site that tracks retail technology, e-commerceand security issues. Retail Realities appears each Friday. Evan can be reached at e-mail and on Twitter.

The foundation of the intersection of social networks and e-commerce is that consumers will be much more likely to trust and buy from a retailer if they know that their friends already shop there. The Catch-22 of such an approach is that it's difficult to get a consumer to name friends without receiving some huge immediate benefit. And, no, the unearthing of friends who already shop at an e-commerce site is seen as a benefit to the retailer, not to the consumer.

One approach has tried to leverage services, such as Facebook Connect, which lets users log onto Facebook and then log onto an e-commerce site (using the same browser.) The technology allows that site to access Facebook names - with the customer's permission. Best of all, the customer does not need to reveal a Facebook password to the e-commerce site. But you then encounter a limit: The system is unable to display a friend's shopping pattern without that friend's permission. ("Hi, Brenda! I see that you're shopping at Phil's Pervert Video House, too.")

The idea of bring social shopping to the Web is not new, with various startups toying with the technology, Sears trying to share passwords effortlessly and even some retailers wondering where to set privacy limits.

One vendor, TurnTo Networks, has rolled out a tweak that might help a little. If consumers connect an e-commerce site with their list of friends -either by typing them in or by connecting the merchant site with existing lists from Facebook, MySpace, LinkedIn or other social sites - it will give a heads-up that one friend has already used that site. It won't say who it is, but it will ask that friend's permission to be revealed.

The idea is a good one, but tiptoeing into this neighborhood is dangerous. What if the customer, for example, has only one or two friends listed? Wouldn't this notification of "one of your friends has shopped here" be a privacy violation?

But there's also the fundamental issue of how much people will use such a service. It's easy to see how many GenY consumers will want to shop where their friends shop. But wouldn't they be more likely to simply pose that question to their friends directly?

Another small hurdle: TurnTo's existing merchants tend to be on the very small side-mostly niche merchants. That's fine, though, because many of e-commerce's greatest treasures are found in relatively obscure sites. But what are the odds that someone's friends will have already shopped there? Isn't there a bad flip side to this if consumers are routinely being told "Nope. None of your friends shop here?" Most merchants would rather the system stay silent unless a friend is discovered to have shopped there.

A nice touch that TurnTo has added is that the social network integration can be done once, but used repeatedly. "Once it's done, it's done for any merchant that uses TurnTo," said TurnTo CEO George Eberstadt, which lists about 24 merchants as participating. "If a friend-match is found and the friend has agreed to serve as a reference for the merchant, we show the shopper the friend's name."

Eberstadt argues that this approach can also be used to encourage return visits from existing customers. "The on-behalf-of-shopper e-mail is a powerful, friendly way to bring past-customers back to the site. For example: imagine you're into your truck and you recently bought snazzy hubcaps at Stylintrucks," he said. "You get a message from them to the effect that, `Your friend (insert name) is shopping here and has a question. Mind helping her out?' with a link back to the site to take action."

The integration of social networks and e-commerce is essential, and it will happen. But there will be a lot of slips and falls en route. What TurnTo has done may not be perfect; early pioneer moves rarely are. It's now up to e-commerce giants to try crafting their own ideas.

By Evan Schuman
Special to CBSNews.com
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