Fab.com: How Social Media, Apps and Cool Stuff Created One of the Hottest Online Stores

It's not just cool products that has made Fab the hottest place to shop.

ByABC News
December 14, 2012, 10:55 AM

Dec. 14, 2012 — -- In one corner sit a typewriter, a funky iPad-iPhone stand, and a giant Lego that doubles as a storage box. Nearby is a brightly colored couch with a pillow on it in the shape of a cat, and another in the shape of a boom box. On the coffee table there's a set of wine glasses.

In the other corner a lamp and toy gun sit on a shelf -- aim the gun at the lightbulb and it will turn the lamp on. On the wall hangs a calendar made out of bubble wrap and a poster of Dolly Parton.

It's not the set of a sitcom -- it's a room at the headquarters of Fab.com in New York City, and every one of the things in the room can be bought on the popular shopping site.

If you hadn't heard of Fab before you saw this story, chances are you would have soon. The site has gone from one million users to 10 million in just 18 months.

WATCH: Fab.com: Behind the Coolest Shopping Site

So why are millions shopping at Fab this holiday instead of Amazon.com or another online shopping site?

Social Leads to Sales
Other sites claim to push "social shopping," but you could say Fab has been a pioneer in that space. "People get excited about the stuff on Fab and they tell their friends. We're the first kind of social commerce website where we put the social engagement first and the sales second," Jason Goldberg, the CEO and founder of Fab.com, told ABC News in an interview. "The way we measure how well we're doing is how often people share the products on the site."

Goldberg said he built the site with social at its core; it wasn't just an afterthought with a Facebook or Tweet button at the end of the page. You can sign into Fab with your Facebook account and see what items are trending with your friends and what items they are picking as favorites.

Fab has also made it really for users to share things on Facebook, Twitter, and Pinterest. And social linkage leads to sales, at least on Fab, says Goldberg. If people use the social features on Fab, they buy twice as often as people who don't. Conversely, social networking played a smaller role than many thought in Cyber Monday shopping; according to IBM, social media only accounted for 0.53 percent of all online sales.

A Store Built for the iPad and iPhone
But just as droves of people are using Facebook and Twitter's mobile apps, many are using Fab's apps. The company released new iPhone and iPad apps earlier this year -- they're clean, easy to navigate and they constantly remind you what's new in the store. You can set it to alert you when new items have been added.

That leads shoppers to check for new additions to the site several times a day and ultimately buy, especially during the holiday season, according to Goldberg. He said 40 percent of Fab's holiday sales are coming from mobile users. That's more than most e-commerce sites, though more and more people are starting to shop on their phones.

"We think mobile first. Just how people check the news in the morning, we want them to check Fab in morning," Goldberg said. "That's the kind of thing we're seeing is the tablets in the evening. And we're, like, intensely studying that data and really catering that experience towards the part of the day and the device of the day the user is using."

Currently, 97 percent of Fab's mobile sales come from the iPhone and iPad. Goldberg says he has high hopes for Android, but the audience hasn't picked up as quickly as those who use Apple devices.

While social and mobile tools have brought users to Fab, they stay because of those odd items sitting in that room. The cool inventory is just that -- it's cool and unlike other stores on the Internet.

"Over 90 percent of the products that you find on Fab, you can't buy on Amazon or on other online retailers. And that's cause we've got this awesome team of design scouts, who literally scour the earth looking for great design finds, and based on how excited we make users," Goldberg said.

When you walk into Fab's office in New York's West Village you get an idea of just who these young, hip scouts are.

"We've gone from 100 to 650 [employees] and most people in the company are just focused on finding great products. We're constantly looking at is how do we keep it fresh, keep it new, keep it exciting. Every day on Fab we have a thousands of new arrivals," Goldberg said.

And those new arrivals range from the funky to the practical. As you'll see in this video, one of the hottest selling items this holiday season is a product called the Beardo -- a hat with a velcro beard. There's a corkscrew with an icicle, the world's largest gummy bear, popcorn with sriracha and a cat scratch pad that looks like a DJ booth. There are gloves you can use with your phone, furniture, knives and wine glass sets, jewelry, clothing and bedding.

The Next Amazon?
In many ways it's starting to look like a competitor to Amazon, and that seems to be Goldberg's end goal -- at least to a degree.

"We really want to be on Amazon's scale some day. I look at a business like IKEA, which is which is in 30 different countries around the world and over 30 billion dollars in sales. And it stands for something. It's a brand," he says.

Fab might start to have more in common than you think with an IKEA one day. When asked about opening a physical store that would allow people to come see the stuff on Fab in person, Goldberg said it's something he'd love to do.

"I think that we should be multi-device, multi-platform, and we should be where the shopper is," Goldberg said. "We could be one of the first companies that figure it out on digital first, then go to physical."