Joseph Einhorn is a 30-year-old serial entrepreneur with a simple, if audacious, goal: to render Amazon obsolete.
His battle-ax is TheFancy.com, a Web site that launched in 2011 and aims to create a seamless integration between social media and e-commerce by enabling users to purchase products without leaving its platform. PPR's Francois Henri-Pinault, Twitter founder Jack Dorsey, hedge fund manager James Pallotta and Facebook co-founder Chris Hughes have all signed on as investors.
“There is an explosion in self expression and discovery.It's time for [that] to give way to commerce," says Einhorn. "You have sites like Tumblr and Pinterest which are great, but you reach a dead end. They don't have the commerce bit," he continues, before declaring:
"Now it's time to get down to business."
Einhorn is far from alone in his ambitions to build the biggest social commerce platform. Ever since 1-800-Flowers made history by launching a chrysanthemum-bedecked “birthday cake” on Facebook in 2009 as the first-ever product to be retailed on the site, cracking the social commerce code has been top of mind for marketers and technocrats alike. The management consulting firm Booz & Company estimates that sales via social commerce will increase sixfold by 2015, from about $5 billion in 2011 to #30 billion in 2015. Granted, that's still a blip compared to the $194 billion in e-commerce sales reported by the U.S. Department of Commerce for 2011 — but the potential is clearly there.
"We are in the very early stages — it's probably the first inning for social commerce," says Wade Gerten, the founder and ceo of 8thBridge, the pioneering Minnesota-based company that has created the technology many brands use to enable social shopping on Facebook, Web sites and mobile apps (including the aforementioned 1-800-Flowers experiment). "Shopping is giong to look very different," he continues. "Our vision of social commerce is a multichannel one."
"What we're talking about is the online reflection of something that has been happening since the Roman marketplace — people who trust one another's opinions and enjoy spending time together and influencing each other’s purchasing decisions,” says Amaryllis Fox, the founder and ceo of Mulu, a socially “curated” commerce site that lets users choose a charitable cause to receive a portion of the proceeds from purchases. “At the moment, social discovery and commerce are still in their infancy and quite fragmented. Increasingly, there won’t be much of a distinction between the online and offline purchasing realms.”
Fox describes the landscape thusly: Right now, many sites, such as Pinterest, are focused on “fortuitous discovery,” where users may not know they wanted a particular object — say, an earthenware mortar and pestle — but then want it when they see it. Then there are the evaluation sites, such as Quora and Yelp, where users can ask the community for their opinion on a particular product or service before purchasing it. More recent additions are curated purchasing Web sites, where users can see what other people (often celebrities) recommend for purchase. Finally, there’s what Fox calls the “game-ification element,” in which apps like FourSquare enable users to check in where they’re shopping and communicate online with their friends about what they’re doing.