Jennifer Saranow Schultz recently explored the growing potential of leveraging on our social networks to get product recommendations. The clearest advantage of tapping on our own social network for shopping recommendations and other research information is trust and reliability. Conversely, product recommendations and reviews by strangers are usually unverifiable and possibly unreliable, e.g. consumers with malicious motives giving unfavorable reviews, merchants masquerading as “reviewers” giving over-favorable reviews, consumers recommending products for discounts/coupons, etc. Of course, with friends, there are critical mass issues, since it is unlikely that our relatively-small social circle has all the answers to our multifarious product research queries.

However, consider the possibility of marrying the trust-and-reliability advantage of personal friends and the diversity-and-breadth-of-knowledge advantage of a larger pool of nonetheless like-minded strangers. While information broadcasted to the public by a stranger may be questionable, information shared with or by the personal friends of said stranger is likely to be more trustworthy and reliable. In other words, personal conversations among strangers who know each other in real life hold just as much credibility as our own personal conversations with friends. Any product recommendation system that allows consumers to access their personal friends while still allowing them to view the information shared within the private circles of other strangers is likely to be markedly more useful than either a friends-only or strangers-only platform. This simple new approach solves the respective problems of either of the traditional approaches.

The problem with this system is that it treads on the fine line between respecting and violating user privacy. It is unlikely that, in their ordinary states of mind, people would be willing to share their private conversations with the world, even if it is for “common good.” Consider, however, that social media norms and exhibitionism are becoming more acceptable and even celebrated on the social web. While privacy concerns are nonetheless common, people are generally more open than ever when it comes to sharing their personal life.

Our latest iteration of Zuupy Social Commerce Solution synergizes trust/reliability and breadth of information by not only allowing shoppers to solicit advice from other friends but also view past advice shared within other social circles (i.e. strangers soliciting advice from their own friends). Therefore, any possible dearth of information within our own social network is supplemented by additional trustworthy conversations from outside our social network. While it remains to be seen whether this approach is more effective for both the consumers and the merchants, we believe that social commerce will, in the future, evolve into and somehow be based on a hybrid of friendsourcing and crowdsourcing, and not just a plain amalgamation of the two approaches.

The internet – and social and crowdsourcing in particular – has always amazed me. When mobilized, people on the internet can really be a powerful constructive force, sometimes exceeding the capabilities of the most intricate and advanced technologies. A lot of tasks that used to be difficult and/or costly to accomplish via technology are increasingly made possible due to social and crowdsourcing. In ecommerce, social and crowdsourcing enable contextually-relevant shopping recommendations, ratings and reviews, reputation gauging, deal-finding, group buying, etc. We have indeed approached a point where crowds and people are scalable, feasible for business use at a low cost, and I believe that we are just seeing the tip of the iceberg.

Yet, not too long ago, human-powered endeavors used to be viewed with derision. “Human-powered” reeks of physical work, expensive overheads, and inefficiency, and is very much against the spirit of the Industrial Revolution that preached mechanization over manual labor. However, the internet has enabled the mass mobilization of humans to achieve remarkable things. For instance, posting a “need help” thread in a heavily-trafficked forum (e.g. fashion forum, personal development forum, programming forum) would very quickly result in many responses from other visitors, some of which are highly actionable. Also, allowing the crowd to flag, upvote, or downvote content on content-based websites has been way more effective than appointing “moderators” to curate content.

My opinion is that, in large numbers, people can be highly scalable and efficient. The fact that humans have abilities of judgment, wisdom, and common sense, and machines do not, also makes it remiss to not tap on this growing trend to drive business. The concepts of “the wisdom of the crowds” and “collective intelligence” have never been more relevant than today. There are many social- or crowdsourcing-based services today that can be adapted for use in ecommerce to “automate” various business functions:

1. On-demand, scalable manpower services (e.g. Amazon Mechanical Turk)
Amazon Mechanical Turk still amazes me today. For basically a pittance, businesses can gain access to a large pool of workers to perform manual, mind-numbing work at a very low cost, avoiding the expensive overheads commonly-associated with manpower. I am not sure if Amazon is the first to create a service for scalable, on-demand manpower, but they seem to be getting it right. Adapted for ecommerce, think of the potential of leveraging on visitors for content creation, rewarding visitors with free yet seemingly-coveted tokens like achievement badges (a la Foursquare) and reputation points (a la vBulletin’s reputation system). Undeniably, high volumes of highly-relevant content are the key to search engine optimization and inbound marketing.

2. Q&A services (e.g. Quora, Aardvark, Stack Overflow)
Contrary to what we usually see in real life, people on the internet are surprisingly obliging and helpful, without the need for any tangible incentive whatsoever. Perhaps people do need outlets to demonstrate their expertise, share their experiences, and gain recognition, or, less cynically, people are simply helpful by nature, and this helpfulness is less visible in real life. The opportunity for ecommerce lies in porting this culture over to the storefront, allowing for C2C assistance, customer service, and support. Such a move would conceivably be valuable in reducing customer service costs.

3. Services using collaborative filtering (e.g. YouTube, Reddit, Digg)
The problem with user-generated content is that just about anyone can publish something out there, resulting in information overload, a low signal-to-noise ratio, and general spam. Services that thrive on user-generated content have obviously grappled with these problems and come up with a brilliant solution: use the crowd against the crowd. Ecommerce websites that have a ton of content (e.g. reviews, recommendations, customer feedback) can benefit from simply letting other visitors upkeep their own leisure space. For instance, Amazon’s “Was this review helpful to you?” feature can be really, well, helpful in helping to maintain the quality of content.

4. Plain old social networking websites (e.g. Twitter, Facebook)
Something that algorithms have not been able to do more effectively than humans is recommendations. The problem is not that machines are faulty or inferior; given the right data and methodologies, I believe that machines can achieve remarkable results in modeling what we would and would not like. The problem is that we are fundamentally distrustful of machines, thus we hold them to an irrationally-high standard – receiving just one irrelevant recommendation would almost surely make us lose our trust in machines forever (just talk to companies who work with sentiment analysis). Conversely, humans are treated as fallible creatures, yet it is their judgment and connection with us that illuminate the recommendations, reaching out to us to at least give a damn. We have all read articles and watched videos recommended by our friends that we would not have otherwise consumed. The way to exploit this situation is easy: replace content with products and deals and let social work its magic.

Although social and crowdsourcing are pretty much mainstream concepts nowadays, their application in ecommerce seems to be peculiarly limited. I believe that ecommerce is a mature industry ripe for disruption; my belief is that social and mobile will be the primary disruptive forces that will change ecommerce and move it away from the mail-order-like affair that it is today. With regard to social commerce in particular, the obvious way to leverage on it is to give shoppers a benefit to participate and be engaged, and the benefit does not even need to cost money. The key seems to be making whatever we want shoppers to do part of their online shopping culture – their way of life – so that it would not even feel like work to them.

Of course, my aim is not to be prescriptive but merely provide one perspective on how to make the most of this opportunity. What is your perspective on this issue?