Theoretical Perspectives on Social Shopping

Theoretical Perspectives on Social Shopping

In Lee (Western Illinois University, USA)
DOI: 10.4018/978-1-4666-9787-4.ch169
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Social Shopping As A New Business Model

Social shopping brings buyers and sellers together in e-commerce where shoppers' social networking facilitates the shopping activities. Social shopping attempts use technology to mimic the social interactions found in physical malls and stores. Social shopping can largely be divided into two categories: (1) Group shopping sites and (2) Social shopping marketplaces. Group shopping sites group individual consumers to purchase products and services together from merchants at discount prices. Examples include Groupon, Gilt City, LivingSocial, and BuyWithMe. Social shopping marketplaces bring social shopping sites, merchants, and consumers together to connect and transact. The marketplace brings together independent buyers and sellers and creates a forum for them to conduct business transactions. Examples include Sttorenvy and Jasmere. Social shopping also encourages people to exchange information about products and services. The revenue sources include sales commission and advertising. Social shopping sites develop Android and iPhone-based mobile apps to provide location-based services.

Key Terms in this Chapter

Social Shopping: A way to combine product/service sales with consumer participation in a social network environment with a synergistic relationship between social networks, consumers, and local merchants.

Price discrimination: A marketing method of differentiating price sensitive consumer groups from less sensitive customer groups and offering different prices for the products and services to each group.

Information Asymmetry: The difference in the information between two parties.

Social Shopping Marketplace: An electronic marketplace which brings social shopping sites, merchants, and consumers together to connect and transact.

Group Shopping Site: An electronic shopping site which helps group individual consumers to purchase products and services together from merchants at discount prices.

Network Externality: The increase in the value of a product or service to a user, not because of the inherent quality of the product or service, but because of the increasing numbers of other users adopting it ( Katz & Shapiro, 1985 ).

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