In the Know

When it comes to staying in touch, reaching out and attracting new customers digitally, Facebook is just the tip of the iceberg. There are many up-and-coming applications that retailers can use not only to leverage brands but to bring in big sales. Here’s a look at several sites that should be on retailers’ watch lists:


Groupon.com 


Groupon.com made headlines in November when Google put in a bid to buy the popular deal-of-the-day site and e-mail newsletter company for a whopping $5.3 billion. News of this was widely spread throughout the industry, raising many questions about how a company that just formed in 2008 could possibly be worth so much. Even more surprising was that Groupon turned down the offer. 


The Chicago-based Internet-coupon service is all about geo-targeting, providing its 35 million users steep discounts on things to do, see, buy and eat in various cities. The catch is that a certain amount of people must buy the deal in order for it to actually be valid. Since the minimum amount of daily purchases is almost always met, it has become one of the most recognized group-buying sites around.

Savvy companies from Gap and American Apparel to small salons, restaurants and boutique shops have joined forces with Groupon. (The deal site shares part of the revenue with its retail partners.) In August, it launched its first national, non-local discount by offering $50 worth of apparel and accessories at Gap for $25. About 441,000 Groupons were sold that day, raking in $11 million. 


The exposure that sites like Groupon give retailers big and small is a huge traffic- and sales-driver. Plus, it links them to a hip, savvy and budget-minded new brand, according to Susan A. McKenna, CEO of Winnetka, Calif.-based social media firm McKenna’s Marketing.


“We are living in a new social Internet, and good ideas are growing faster than ever,” she said. “Groupon’s concept is one that retailers should take note of and perhaps even consider emulating, especially given their very early success. Regardless, looking for ways to partner with Groupon could be an amazing geo-targeting tool for both brick-and-mortar and online retailers.”


Social Shopping Sites


Many social shopping sites are a gold mine for merchants. GoTryItOn.com, for example, has become a hot new destination site dominated by teens and young adults. Serving as a virtual dressing room, members can use a Web cam or upload pictures of what they are wearing and share it with the community. Those on the site can then leave comments about the outfit, offer style suggestions and, if more than one photo is uploaded, vote on which look is best for them. This also means photos can be snapped from a dressing room of a store, and, depending on the feedback, shoppers can decide whether or not they should make a purchase. Users can also keep pictures private and seek feedback from trusted friends.


“We have thousands of people uploading pictures while in the dressing room at stores,” said Marissa Evans, CEO of Go Try It On. “Brands and retailers could get engaged with our community by reaching back to customers who are at the point of purchase and making the ‘to buy or not to buy’ decision in real time — whether they are in their own stores or a competitor’s shop. Shoppers are usually alone with brand labels in a fitting room, but now retailers can access [those consumers] directly when they are seeking advice and feedback, which could be very powerful.” 


Another popular social shopping site is Chictopia.com, a blogging community that offers fashion inspiration from photos of people in places around the world. Launched in 2008 and now with more than 100,000 registered users, Chictopia is a mecca for trendsetters and allows members to post pictures of what they are wearing on the street. Retailers can analyze which styles are trending and determine if any are worth bringing into their stores.


“The ‘word on the street’ is always important for fashion and retail, but so is staying true to one’s brand,” said Lauren Freedman, president of Chicago-based e-tailing group. “However, the interpretation of street trends is the most successful part of merchandising strategies, and this is where Chictopia can help merchants. Fashion trends are also being spread quicker and faster through sites like this, so retailers can listen in and be a part of the conversation.”


Alibaba.com


Alibaba.com is China’s largest e-commerce company and the world’s largest online business-to-business trading platform for small companies. The site — which is 40% owned by Yahoo! Inc. — connects retailers looking for inventory to worldwide sellers with wholesale prices. Although the site has been around since its launch in 1999, it is a huge resource for small businesses looking to get off the ground and grow their supplier network. In fact, it has more than 50 million registered users in more than 240 countries and regions.


The site, a unit of Alibaba Group, was in the news most recently when the group’s founder Jack Ma had reportedly been approached about joining a private equity group considering a bid to buy Yahoo.


Set up like popular career-networking site LinkedIn, Alibaba encourages users to chat in forums, leave comments and build professional relationships. In June 2010, the company purchased Vendio, a provider of e-commerce solutions to 80,000 retailers, to further its supplier reach and help small retailers run Web stores with various e-commerce services.


Penny Auction Sites


Penny auction sites have seen exponential growth in the last 12 months due largely to the down economy in the United States and other parts of the world. The business model for sites such as Swoopo.com, Beezid.com and Quibids.com allows shoppers to bid on factory-sealed products at huge discounts, from mobile phones and laptops to cameras and TVs. First, users have to place a bid on products. At Swoopo, each bid costs $0.60, but bid-packs are sold at a discount (e.g. 40 bids for $24.00). To win, shoppers have to be the leading bid when the auction clock runs out. On average, winners end up saving 65% off the retail price. 


Some industry experts recommend retailers take a look at this business model and even partner with sites like these to get rid of surplus or clearance items. According to McKenna, these sites may also become viable channels for retailers looking to establish an online brand for new products.


“Retailers of any size that ignored eBay, Amazon and Overstock.com as distribution channels for products regretted it over time, and the same might be true for the penny auction sites,” McKenna said. “They are not only taking the Internet by storm, but even challenging the eBays and Amazons, especially in this economy. Where these will end up, I’m not sure, but the model and current popularity certainly should be noted by merchants.”