Shop.org Summit Highlights Social Networks Focused on Purchasing

CHICAGO—People go to the mall to hang out with their friends. They patronize their neighborhood store because of the relationships they've built with the merchants. The next era of e-retailers is focused on bringing these elements of the brick-and-mortar experience online.

"It's time for a new era about relationships," CEO and founder of OpenSky John Caplan said in a speech Wednesday at Shop.org's Annual Summit here. Caplan, a loyal Amazon Prime customer, praised the online retailer for enabling consumers to find what they want and receive it fast. But he created OpenSky to serve the same consumer when she is interested in interacting with merchants and using friends to facilitate the process of discovery. "The interaction between a merchant and a consumer is why we love shopping, and that relationship builds trust and creates loyalty," Caplan described.

OpenSky users follow merchants and interact with them in a comments section. When someone is ready to buy, they do it directly on the OpenSky site. Caplan boasted of a 10 percent conversion rate in the company's feed. Merchants tend to have followers that number in the thousands, not the millions, but more buyers among those followers.

Joining in the conversation at the panel "Digital Influence: Where Do We Go From Here?" were social e-commerce companies Trunk Club and Wanelo.

Just over three years old, Trunk Club tries to scale the process of personal styling and bespoke clothing. Dressed in a custom suit, founder Brian Spaly talked about how he wanted to help men who aspired to dress well but were clueless or didn't have the time. There's currently a "rebellion against choice," he said. "The Internet barfs on you if you do a search for black shoes." With Trunk Club, you're matched with a stylist who will be able to respond to your request for black shoes with select, edited choices. Men try on their boxes of items, and return those that don't work. Spaly's philosophy is to let the customer guide the process, whether it's someone who texts "Send me a blazer and a shirt I can wear in Las Vegas" or who wants to chat for an hour about his style—and his life. The process sounds labor-intensive, but at least one number suggests otherwise. A good stylist can handle 500 to 1,000 clients, thanks to back-end technology that tracks the customer and enables "progressive personalization," according to Spaly.

Wanelo, a portmanteau of "Want, Need, Love" that allows consumers to save and buy items that fit one of those three categories, is hugely popular with college-age females. Founder and CEO Deena Varshavskaya created a shopping-based social network with a clean look that suggests a Google image search. As users scan clothing and home goods, they create stories and collections. The difference is that a "buy" button takes consumers directly to a site to check out. Varshavskaya shared tweets from customers excited about the buy option, noting that items people pin on Pinterest can be out of stock and difficult to find; this lets them buy on the spot. Brands can also own a page and join the sharing process with consumers, which she highlighted as a way for brands to join what's mostly a user-generated space.

These three retailers are trying to bring in-store elements to the online process, but they do so recognizing that back-end technology makes the process scalable and adds to the sense of discovery.

It's a strategy that established retailers are embracing too. Walgreens CEO Gregory D. Wasson spoke about the company's innovations in-store, where customers in select locations can get manicures or see a nurse practitioner about a cold. With more Americans likely to be insured due to Obamacare, Wasson expects its pharmacy offerings to grow. One of the company's apps allows a customer to scan a prescription with a smartphone to refill or transfer the order. Walgreens also can offer pill reminders and give text alerts when it's time to refill a prescription. Pharmacists and customers alike appreciate text alerts when a prescription is ready, Wasson reported, which takes much of the friction out of the fulfillment process.

As e-commerce continues to grow rapidly, companies stand to benefit by letting customers interact with their friends and merchants during the buying process. DraftFCB's Senior Vice President and Director of Global Retail Strategy Janet Rose noted in her own presentation, "There's never been a more exciting time to work in retail."

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