As I embark on this holiday season, once again I realize that all my shopping will be done online. Recently, I have grown enamored with Web 2.0 social shopping sites that provide a targeted, and personalized experience for time-starved individuals like myself.

In the real world, I rely on my friends to support my major purchase decisions. I also use their guidance to follow trends, find the best price, and identify stores with a great reputation. Why would I not rely on the recommendation of thousands to help hone my online purchases or to find a gift for someone who is hard to shop for?

With Forrester Research projecting that holiday sales will reach more than $33 billion this season, 21% more than last year, companies are starting to look outside of traditional internet shopping experience for an understanding of what makes Web 2.0 shopping sites successful, and what elements they can incorporate in their daily practice to create a stronger relationship with their customer base. Here are some guiding principles to help shape a successful shopping experience.

Make shopping fun

There are sites that entice users, even before they are customers. They are visually pleasing, with a consistent user interface propagated throughout. Aids like breadcrumbs and recently viewed pages are displayed which help orient users.

These sites offer a variety of self-service methods to appeal to different types of users. They all contain browsable topic trees and search capabilities. Many also offer decision trees and parametric searches. For example on hi-tech sites, visual decision trees that contain photos of products help orient users to their correct product, and guide them down a particular discovery path to the requested information. Other sites allow you to search by price range, by recipient, and even by personality like gadget geek, mom-to-be or fashionista.

Interactive sites relying on rich internet application interfaces based on technologies like AJAX can hold audiences captive. This technology allows users to drag and drop content on a page to where they want to interact with it, or to display information in the colors and fonts of their choice. Rollovers make sites more engaging. Sliders for price range pickers, or a color palette to search for items of a single color make sites fun.

It should always be easy to check for sale or newly available items. Let peer pressure help you out by allowing users to see what the top searches or hot buys are - both which serve as good indicators of current trends.

Let Users use their own words

Users don’t always think in the context of company-generated navigational topics. One approach is to let users tag content and browse tag clouds. Tags do not preserve the intrinsic relationship between objects, but they echo more closely how users interact with content that they come into contact with.

Information on the User’s Terms

Many shoppers today are web-savvy and time-starved. Sites that push relevant service alerts or policy changes to their users, or allow them to subscribe to content of interest are true productivity-boosters. One especially useful time saver is to allow users to create watchlists so that they can be alerted when an item goes on sale, or falls below the price that they are willing to pay for it. Some sites even allow users to receive alerts in the way that they want – over email, SMS or even via phone – which makes them even more appealing.

Some shopping sites even go a step further. If a user’s watchlist item is consistently out of his price range, he can be sent recommendations for lower price alternatives. Personalized product recommendations can also be generated based on prior purchases or watchlist items. For example, by allowing users to tag items that they like, sites can offer targeted recommendations on new products calculated from the user’s tagged data.

Use the wisdom of crowds

Sites that I have learned to trust have brought their user community to the forefront. Kaboodle, for example, touts “shopping is more fun with friends”. It surely is, and, additionally you inherently trust the advice of peers over company recommendations. Sites can tap into this collective wisdom of their user community by appending feedback forms to all content and letting users’ rate content. The received feedback and ratings can then be used to optimize their content.

Some sites promote peer-to-peer communication by allowing users to create wishlists, and to email them to friends. Others even allow the broadcasting of wishlists on blogs or social networking sites like MySpace.

All these strategies and tools help streamline the shopping experience, and use the community input to validate purchase decisions. Users are starting to have a greater voice in shaping purchasing behavior, and companies will have greater success in creating a loyal customer base if they listen to and use the voice of their customers.

Company: KANA