By John Hennessy
Internet retailer Buy.com recently, and quietly, launched a companion social networking site call YUB.com (http://www.yub.com). Short for Young Urban Buyers (and conveniently "buy" spelled backward), Yub rewards members for making product recommendations.
Unlike other social networking communities such as Friendster, Yub membership also comes with an economic benefit. Yubbers (as they're called) earn rewards and points for the role their product recommendations play in helping other Yubbers buy products.
If you buy through another Yubber's link, that Yubber earns Yub points on the sale. Yub points can be redeemed for cash after 1,000 ($10) points are accumulated.
Yubbers also earn discounts on purchases they make through the Yub site.
The Yub mall currently includes Target, Foot Locker, iTunes, drugstore.com, with new tenants planned such as Linens and Things.
Membership in Yub comes in two flavors - free and paid. The paid version is currently $19.95 for a year. For that price, you earn a larger percentage on purchases made and gain expanded social networking tools; picture posting, saved message limits, subscriptions to other members, etc.
Moderator's Comment: How can other retailers wrap communities around their stores to encourage greater loyalty? Is the risk of negative feedback from members an impediment to more widespread adoption of this approach?
Buy.com's goal is pretty clear. They want the advantages of Yub community membership to make Yub the place where twenty-somethings go to shop.
They're using some economic flypaper to encourage stickiness. Members earn points for their recommendations. This encourages members to engage and make frequent recommendations. Members gain discounts on purchases, which encourages consumption and drives sales. And members make new friends, which creates a non-commerce driven reason to return frequently to Yub.
In the face of a barrage of messaging and increased skepticism, the community recommendation approach alone is a strong benefit to shoppers, particularly online where there is no ability to interact with the product. Adding the economic component makes it even more appealing and should be a carrot that encourages active participation.
Rather than stand still and watch Amazon, eBay and others eat their lunch, Buy.com is stepping up and fighting back with what they hope is a unique advantage. Retail innovation like this sure beats a price war.
It will be interesting to track how Buy.com's Yub initiative helps sales at Buy.com and the Yub mall partners. Right now the focus of Yubbers seems to be more on community. But it's still early in the experiment. - John Hennessy - Moderator