When a consumer goes shopping, he or she essentially needs to make four key decisions in each product category. Whether to buy in that category, if so where, which brand and what quantity. All four decisions may be influenced by consumer characteristics (E.g. income, family size, purchases frequency, life style etc), marketing environment and availability of payment instruments. (Reference: Blattberg and Neslin 1990)
The expenditures on promotional activities have considerably increased over the last few decades and the add-on factors like payment instruments available in the market has been boosting consumption across the globe. The concept of online shopping has been shifting from a mere ecommerce based model to a social shopping community that revolves around consumption related interests. In an online world a shopping decision is not just restricted to the above mentioned four key decisions, but it also revolves around the website quality, content, and consumer involvement. Apart from direct shopping features social shopping communities offer user generated content as well. Some of the features include recommendation lists, ratings, reviews and user profiles.
Social shopping Community are experiencing high growth rates in consumer popularity, thus this business model has received considerable venture capital in recent years.
Internet has changed the way we live; over the last decade. The Internet has led to an increasingly connected communications environment, and the growth of Internet usage has resulted in declining distribution of traditional media such as television, radio, newspapers and magazines. Parallel to the increasing importance of the internet as a shopping channel, the advent of web 2.0 is rapidly moving the online landscape into a truly consumer driven era. Web 2.0 provides consumers with many methods of creating and sharing user generated content (UGC).
Therefore, social media such as blogs, message boards and content-sharing platforms are growing rapidly. In particular consumers increasingly communicate and exchange information in social networks, such as Facebook and LinkedIn.
In the area of e-commerce, this results in a linkage of online shopping and social networking, initiating a new form of e-commerce that of social shopping. In general social shopping is about connecting consumers and shopping together, which is also the focus of social shopping communities which can be defined as follows: An SSC is an online shopping service that connects consumers and lets them discover, share, recommend, rate and purchase products, in contrast to traditional ecommerce channels such as online shops and shop bots. SSC’s additionally offer user generated social shopping features as well as potential interaction, so as to initiate or simplify purchase decisions.