http://online.wsj.com/article/SB10001424052748704259704576033792763430596.html

DECEMBER 22, 2010

Using 'Likes' for Gift Ideas

Retailers Are Tapping Social Profiles to Help Customers Shop for Their Friends

By GEOFFREY A. FOWLER And VAUHINI VARA

Online retailers are experimenting with the idea that friends can make shopping easier.

Companies such as Amazon.com Inc. and Etsy Inc., a site that sells handmade and vintage goods, are making gift recommendations for individuals by tapping into the trove of comments and preferences collected by social-networking giant Facebook Inc.

"Shopping is all about tastes and preferences, but so far on the Web, shopping has been pretty clinical," said Siva Kumar, chief executive of TheFind.com, a product search engine that taps Facebook data. "Facebook allows you to provide the personal relevance and context that makes shopping much better."

The social-shopping efforts are all in an experimental phase, but the goal is to change how consumers discover and choose products--and increasing their likelihood to click on the buy button.

The latest retail efforts focus on using Facebook's platform--where outside sites can tap into Facebook user information with their permission. Since last holiday season, more than half of the top 25 retail sites have integrated with Facebook's platform, the company says.

For example, in November, eBay Inc. launched "Group Gifts," which allows users to split the cost of a present with their Facebook friends by logging into eBay with their Facebook credentials.

For Facebook, the goal is to expand its reach on the Web and make its networks more useful. Facebook says it gives retailers some ground rules about how they can use its data--no spamming, for instance.

"We make the platform available and give users controls," said Ethan Beard, Facebook's director of the Facebook Developer Network, but "the core experience of how you make the experience social falls on our partners."

In July, Amazon launched a service that allows shoppers to login to their Facebook profiles through the e-commerce site. With permission, Amazon then uses Facebook information about their friends' favorite music, books and other products to make gift recommendations, and even keep track of birthdays.

Amazon declined to discuss its experiences, but at Etsy, more than 100,000 visitors have tried a similar tool that suggests gifts based on their friends' Facebook profiles.

Jacqueline Dover, a 31-year-old in Philadelphia, recently was recommended a leather jacket and other motorcycle gear for a friend who lists punk-rock bands and motorcycles among his interests. "I didn't buy anything but I'm certainly going to try the feature next time I'm shopping for a birthday gift and coming up clueless," she said.

However, there are goofs: One Etsy user noted in an online forum that the website recommended for a male friend a pair of delicate, dangling metal earrings in response to indications that he likes death-metal music. "Cute earrings, but not quite his style," the person concluded.

Jason Davis, the lead scientist at Etsy who developed the tool, said some missteps are inevitable. "In the end, we offer users 10 or 20 recommendations, and if one isn't good, you can look at another one," he said.

The experiments reflect a recognition that e-commerce, while convenient, can't match the experience of visiting stores with friends or family.

"This is a new frontier for personalization on retail sites," said Jeffrey Grau, an e-commerce analyst at eMarketer Inc. "If a user is on a site to shop-- as opposed to being on Facebook for a social experience--it catches them at a point where the retailer can increase conversions," he said.

While some stores, such as J.C. Penney Inc., have set up stores on Facebook.com itself, it remains unclear whether people want to shop where they hang out online. Some sites also encourage shoppers to share what they buy as well as product reviews on Facebook, in the hopes that one purchase will inspire others.

Facebook stumbled in a previous attempt to work with retailers. In 2007, it launched a controversial service called Beacon that shared information about people's Web purchases with friends--for instance, posting a notice on a user's Facebook page about the movie he rented on another site. That service was shut down after users complained it was difficult to opt out.

To be useful, recommendations need to tap just friends that have relevant opinions, said Darren Vengroff, the chief scientist at RichRelevance Inc., a firm that develops recommendations technology. "A lot of people have their mom as their friend on Facebook, but they don't necessarily like the same kind of movies," he said.

How It Works

* A shopper visits an online retailer like Etsy.com that connects with Facebook
* Etsy seeks permission to access Facebook data about the shopper and her friends
* The visitor selects the friend she wishes to buy a gift for
* Etsy recommends items based on the friend's Facebook profile, such as jewelry inspired by a book she has read or T-shirts for a music band the friend likes.