Twitter-based shopping website seeks retailers

August 12, 2009

imshoppingBuying something online can be a frustrating process. The shear numbers of websites offering the same product can lead to endless hours of surfing to try to find the right deal. Consumers often become overwhelmed and end up not buying anything at all.

Prashant Nedungadi (see Nedungadi’s personal five-day entrepreneur journal, exclusively for Reuters.com) has been one of those people and decided to use that frustration to launch IMshopping.com, a website that utilizes a combination of software and sales experts to direct buyers to the precise product they’re looking for. What Nedungadi has dubbed “human-assisted shopping” is a network of retail experts, or guides, and the broader community of IMshopping’s more than 30,000 registered users.

IMshopping leverages Twitter to help allow consumers to pose shopping-related questions around the clock.

The Twitter part works by submitting your shopping query to @imshopping, which spits back a response to your Twitter account, usually within 15 minutes, with a link to the answer of your question. Photos of the product and other recommended products may also be included in the response.

Every user who registers on IMshopping automatically has an online profile generated when they either ask or answer a question. Their bio page also includes a numbered ranking, a list of their retail expertise (electronics, automotive, household, cosmetics, etc.) and an archive of all the questions they’ve answered so the questioner has a way to judge how credible they are.

IMshopping just released a merchant side to their website and hopes to follow that up in the coming weeks with the announcement of an iPhone application. That is likely one of the key reasons IMshopping garnered $4.7 million in venture capital from SK Telecom prior to the site’s April launch.

The idea for this service stems from Nedungadi’s first-hand experience with Andale, a website he co-founded in 1999. Nedungadi noticed a drop in traffic to the site, which offered cloud-based services to help small- and medium-sized businesses manage their inventories online. Thinking it might be a problem with his software, he started calling customers to see if they were displeased with the service. What Nedungadi discovered was that an explosion of online retailers competing for customers had driven prices down, while subsequently ratcheting up the costs of buying traffic, through services like Google’s AdWords.

“That was a huge red flag,” admitted Nedungadi, who analyzed online retail data from 2002-05 and found that conversion rates for online merchants had nearly halved, falling from 3.7 percent to 2.1 percent. “In 2000 when Google launched AdWords buying traffic was a science and now what we’re seeing is that buying traffic is becoming a commodities business: if you buy the right keywords, you get traffic. The problem was converting traffic into new customers became harder.”

THE PITCH

Nedungadi’s research showed him that the sites that were most successful in getting consumers to buy their products were those that offered the best customer assistance. He feels that IMshopping’s community of experts, answering all manner of initial and follow-up questions, is the closest thing to actually dealing with an in-store clerk and that this will be an attractive and low-cost option for sellers who are looking to connect more deeply with their customers.

“When people ask questions and they get answers, the likelihood of them actually buying the product that was recommended to them is about 15 percent,” said Nedungadi, who asserted that the industry standard is 3 to 4 percent. “What we’re trying to do is make the community sell for them and that is something that nobody has done before.”

In order to do that he will have to convince retailers that his experts are just as credible and trustworthy as those at a big chain like Nordstrom, while at the same time keeping his price point low enough that businesses can afford the additional expense.

“The need is clearly there, but converting that need into a solution that you can give to somebody in a very simple way and have them pay for it, is a chasm that is always very hard and it takes multiple iterations,” said Nedungadi, whose target audience is primarily small- and medium-sized businesses looking to bolster sales during the upcoming holiday shopping season. “At Christmas everybody has questions on every website and we want to leverage that. We want to offer this to every merchant and ask them: can you offer a high-quality service on your site, using our platform?”

TAKING IT TO THE EXPERTS

Tom RyanTom Ryan, the CEO of the trend-setting clothing company Threadless, knows all about leveraging Twitter for business, having formed a partnership with the social media powerhouse to reproduce notable “tweets” on t-shirts.

“I believe that using social solutions to boost conversion is generally promising,” said Ryan, who feels IMshopping’s approach of creating a network of unbiased experts to answer specific questions of shoppers is interesting. However Ryan added they will have a tough go competing with review sites, like CNET and decision-engine sites like Hunch. “I think a key success factor will be the company’s ability to successfully recruit a large, loyal, talented and unbiased group of experts and to convince shoppers that these experts truly are talented, unbiased, and a better source of information than other sources.”

Beth GoldsteinBeth Goldstein, the president of Marketing Edge Consulting Group and author of “The Ultimate Small Business Marketing Toolkit,” is skeptical on whether businesses will entrust their hard-earned brands to an anonymous and untrained sales staff.

“Without a staff trained to understand your brand, it’s akin to pulling people off the street to reinforce your brand and help your customers,” said Goldstein, who added not even Nordstrom’s highly-trained sales staff has been able to help the retail giant stem huge losses in a recession where price trumps everything. “That’s a risky business model for any business that is interested in long-term customer loyalty.”

Josh HallettJosh Hallett, a social-media expert and New Media Strategist at Voce Communications feels IMshopping has merit and an interesting platform, but would need to see more of a “wow” factor in terms of the kind of product suggestions being made by Nedungadi’s experts.

Hallett said IMshopping is similar to what entrepreneur Jason Calacanis is doing with his human-powered search engine Mahalo, which he launched in 2007. “Everybody knows Google and Yahoo as search tools, but (Calacanis’s) business model has always been we’ve got actual humans reviewing and providing recommendations based on just intuition,” said Hallett, who says the downside is that sites like Mahalo and IMshopping have to pay those people, which can be a big expense. “What’s interesting about the IMshopping platform is that he (Nedungadi) can offset those costs onto the retailers using the service as opposed to having to rely upon an advertising model.”

What do you think of IMshopping’s business model? Would you use this tool to help you shop online? Leave your comments below:

9 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

This is neat. Another great shopping site that will let consumers find deals and save money. Going to join the site.

This is a great idea. Being able to find other users who have used or heard of the production in real time is great. Certainly a good way to continue to engage users. Found a good poll on social media: http://www.polladium.com/poll.php?poll_i d=7&location_id=19191

Posted by Joey S | Report as abusive

[...] Entrepreneurial » Blog Archive » Twitter-based shopping website … [...]

Very much keenly noted the contents.
Great ideas for future shopping people
Many Entreprenruers will join it.
Definite success in future years.
Inspirational news from this website.

Sounds promising, but difficult to implement. Also concerned about a type of “upsell”. No, this isn’t what you want. You want the item that’s $50 more, kind of thing. There will be commissions and fees being transfered, and that kind of upselling isn’t uncommon.

Video On The Pitch is full of knowledge and research oriented project.
I am seeing and enjoying the fruitfulness.
Really wonderful.Very useful to aspiring industralists
If i go on seeing,listening,watching and writings to this website,hence i will not have time to write any things to other news channels and to any social websites.
Whole time goes to Reuters
I am very keen observer of this world famous news provider channel
Eager to participate of all your economic editors blogs.

The human element seems to always make or break many start-ups. If the process is not fluid, easy and customer focused, the model breaks down. There are many industries that have untrained staff and the only ones that survive are ones that have little competition.

Now let me go buy my wrinkle cream from a store clerk at the mall. I want to see if it is working on her.

Sofia Hogan

This is bring a competitive choice to the on-line market; I believe it will also be a great buyers option for online shoppers like myself. I will join this site today.

Posted by Charles Harris | Report as abusive

Certainly IMshopping is a great social shopping tool. But for one who is a frequent shopper requires to consult generic deal sites to save large amount of money. Sites like http://www.cheapdeals101.com/ , http://www.dealtaker.com/ are helpful to save your money. Thanks for sharing great info.

Bella.

Posted by Bella Jong | Report as abusive

[...] Entrepreneurial » Blog Archive » Twitter-based shopping website … Tags: babies, baby diaper cakes, baby shower gifts, newborn baby gifts, pregnancy, shopping Posted under: Family Comment (RSS)  |  Trackback If you like this post then consider sharing it with others. [...]

This is bring a competitive choice to the on-line market; I believe it will also be a great buyers option for online shoppers like myself. I will join this site todayLa Martina

Posted by jonesmit | Report as abusive