GigaOM » Online Commerce

Superman wears Warby Parker

Om Malik — Thu, 23 May 2013 20:54:07 +0000

You all know that we’re fans of what the folks at Warby Parker are doing. In particular, we’re quite intrigued by their effort to take their online brand offline. The New York-based company, which recently raised a ton of money, is now taking the next step in terms of branding and is going to be working with the makers of the movie, Man of Steel, on two special frames with a hint of Superman Blue or Red near the temples.

Clark Kent — you know, the nerd journalist who is also Superman — and Warby Parker, the brand that was made by nerds, is one movie merchandising deal that makes a lot of sense. Of course, we talked about Warby Parker’s future with its co-founder at our RoadMap 2012 conference. (You can find out more about our RoadMap 2013 conference later this year by clicking here.)

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One Kings Lane raises $50M to dominate home decor

Ki Mae Heussner — Tue, 11 Dec 2012 12:05:03 +0000

The past few months have been very good to e-commerce companies concentrating on specific verticals. In September, eyeglasses startup Warby Parker said it raised $36.8 million; last month, Zulily, the deals site for moms, babies and kids, said that it raised $85 million; and, on Tuesday, home decor site One Kings Lane said it raised $50 million in Series D financing, bringing its total funding to $117 million.

The round was led by Institutional Venture Partners, with participation from other previous investors Kleiner Perkins Caufield & Byers, Greylock Partners and Tiger Global Management and new investor Scripps Network Intractive, which operates HGTV and the DIY channel.

“When it comes to media companies, they are really the leaders in lifestyle content and have a huge following in home decor enthusiasts,” said One Kings Lane CEO Doug Mack. “We thought it would be great to have a backer with that kind of expertise.”

As consumers use smartphones and tablets more for shopping, Mack said, a major focus going forward will be mobile and tech investments. On the heels of the company’s first national TV ad campaign, it plans to invest more in marketing and branding, as well as in merchandising and services, he said.

Looking at the broader e-commerce landscape, he said, vertically-focused companies like San Francisco-based One Kings Lane are emerging as the companies with the strongest profitability profile and potential for longevity. But they will also be challenges to keep up with consumers’ migration to mobile, he said.

“I feel that the world is moving to mobile first faster than any company ever imagined,” he said. “Our rate of investment in mobile will only have to be accelerated.”

When we caught up with One Kings Lane this summer, it had recently hired a new CTO, Jean Sini, a former head of engineering for Mint.com, to go “all in” on mobile.

As evidence of the growing power of mobile platforms, Mack said that this Thanksgiving, 50 percent of the company’s traffic came from mobile, which was a surprise considering that the holiday has historically been quieter.

The company expects to reach $200 million in annualized revenues in 2012, with 25 percent of monthly revenues coming from mobile purchases. It says it launches up to 3,000 new home products each day and counts more than six million consumers among its members.

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Birchbox, Warby Parker co-founders to speak at RoadMap

Ki Mae Heussner — Thu, 11 Oct 2012 12:00:38 +0000

When a company can craft an annual report that looks like a work of art, you know it has design in its DNA. And when a startup spawns a crop of clones that barely bother to change their names, you know it’s making a mark.

Eyewear maker Warby Parker and beauty discovery service Birchbox are both cutting new paths in retail – and with style to boot – which is why we’re very excited to announce that co-founders from both companies will be taking part in our upcoming RoadMap conference on November 5^th in San Francisco.

Warby Parker co-founder and co-CEO Dave Gilboa

Birchbox co-founder Katia Beauchamp and Warby Parker co-founder and co-CEO Dave Gilboa will join us on stage for a conversation about the future of connected retail and how they plan to interact with consumers as they move between platforms and receive more personalized experiences.

Given that this year’s theme is “design in the age of connectedness” it only makes sense to confab with two companies that have been strategic about the design of every last detail. From the product to the web design to the company’s very name, “We obsessed over every pixel,” Gilboa recently told Vanity Fair magazine. And, in an interview with Forbes this summer, Beauchamp said Birchbox was launched to marry convenience with curation. “It’s like having a beauty editor as your best friend,” she said.

And these are exciting times for both companies – in the last month, Warby Parker launched its first TV ads and Birchbox made its first acquisition (and an international one at that). At RoadMap, we’ll ask them to talk about their future plans, where they see online retail moving and how design will continue to fit into the equation.

Other speakers at RoadMap will include Pinterest CEO Ben Silbermann, Nest CEO Tony Fadell, Instagram CEO Kevin Systrom, Tumblr CEO David Karp and others. Take a look at the full schedule and speakers here.

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Social marketplace Copious courts men, adds art categories

Ki Mae Heussner — Tue, 02 Oct 2012 15:00:26 +0000

Copious, a social marketplace based out of San Francisco, is making a play for men. Starting Tuesday, the startup is announcing that in addition to its current categories of women’s fashion and accessories, it will also offer men’s clothing and art.

Launched last summer, Copious is an eBay-like marketplace of buyers and sellers that leverages Facebook and Twitter, as well as users’ interests, to personalize their sopping experiences. Jonathan Ehrlich, the company’s cofounder, said the addition of menswear and art categories is a natural next step as the marketplace grows to appeal to all kinds of buyers.

“Copious is powered by a person and [his] interests,” he said. ”It’s representative of this trend of organizing around people.”

To date, the vast majority of the platform’s users have been women, but with the expansion, Ehrlich said, the company hopes to reach a breakdown of 60 percent women and 40 percent men.

In addition to new categories, such as men’s vintage, photography, home décor and design, the site updated its home screen and navigation to be more inviting to men. For example, while the previous logged out screen featured only women’s fashion items, the new screen displays men’s and women’s shoes.

The startup also announced that it has partnered with Brad Goreski, star of Bravo TV’s “Brad, Brad World,” who will sell items from his own closet on the site.

As we’ve written about before, there is no shortage of online marketplaces angling to reinvent eBay for a more social, design-focused crowd. Sites like Fab, Fancy and Wanelo don’t include a peer-to-peer component but similarly use social signals to personalize a user experience. But Ehrlich said each action a person takes on Copious further personalizes their experience so that social commerce isn’t just about “social marketing,” but real personalized curation.

Copious declined to share user or engagement numbers, but said it has hundreds of thousands of users and has sold tens of thousands of sites. It has raised $7 million from Foundation Capital, Google Ventures, Relay Ventures and other investors.

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4 startups to watch from Entrepreneur Roundtable Accelerator’s demo day

Ki Mae Heussner — Fri, 21 Sep 2012 21:41:19 +0000

From e-commerce to e-mail to politics and paperwork, startups of all kinds were on display Friday at the Entrepreneur Roundtable Accelerator’s Demo Day in New York. The accelerator program, which just launched last year, debuted its third class of startups, bringing its total portfolio to 30 companies.

The 10 startups ran the gamut from marketplaces for custom goods, catering and yoga gear to companies looking to optimize online video, totally digitize paperwork processing and simplify group travel. Here are a few of my favorites:

mxHero

Email may be decades old, but mxHero is trying to make sure it keeps up with the times. The Sao Paulo-based company has a bunch of cool services – from self destructing messages to the ability to hide email addresses from out-of-company recipients to enhanced email monitoring – to help enterprise clients improve email. It also allows people to send attachments of any size, block or track the use of BCCs, and add email signatures to everyone in an organization. In the last six months, the startup has added 1,300 companies, and several of its apps are already ranked among the top 10 in Google Apps.

CaterCow

I wasn’t expecting to get excited about a marketplace for catering, but something about the site’s Seamless-meets-Pinterest vibe really pulled me in. CaterCow, launched by a team of former Airbnb employees, gives caterers of all kinds – from local bakeries to food trucks to independent foodmakers – a place to showcase their services. And it gives businesses and individuals an easy-to-navigate place to discover and pay for catering. The packages range from traditional appetizers and desserts to Sno-Balls, frozen bananas, and custom cocktails. The company takes a cut of the transactions, and said that since launching earlier this summer it’s processed about $9,000 in transactions.

Juniper & Trade

Seizing on the anti-mass production movement driving artisan food, local breweries and handmade products, Juniper & Trade is a marketplace for custom-made home goods. Through the site, people who might otherwise head to retailers like Crate & Barrel can find reasonably priced custom home products and have them delivered to their door. It’s true that woodworkers and other craftsmen can already offer these kinds of products through Etsy, the biggest site for handmade goods, or CustomMade, which offers a range of custom-made items. But, unlike those sites, Juniper & Trade exclusively focuses on home goods. And, as the success of One Kings Lane is showing, the demand for home goods online is strong. The platform has not launched yet but will start with 18 makers in New York.

Houdini

Services like Amazon’s Mechanical Turk can put an army of human laborers at your disposal to complete small tasks. But the problem, according to Houdini’s founders, is that there’s no quality control, no training and no assurance that you’re actually getting the best people for your needs. Companies come to Houdini with a particular need, and then Houdini screens and trains workers to complete that task, and also reviews their work.

Citing management firm A.T. Kearny, Houdini said outsourcing as we know it will disappear in the next five years. And, as that transition takes place, companies taking advantage of web-based “cloud laborers” could be well-positioned. Since launching earlier this year, the company has seen impressive traction. It’s logged 8,000 man hours of work for over a dozen customers and has a waiting list of 380 businesses eager to use the platform once it opens out of private beta.

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Birchbox goes global with acquisition of Paris-based JolieBox

Ki Mae Heussner — Thu, 13 Sep 2012 19:59:23 +0000

Beauty e-commerce startup Birchbox is crossing the pond with the acquisition of JolieBox, a Paris-based company offering similar services.

In the past year, JolieBox, basically a Birchbox clone, has itself acquired Spain’s Glamourum and the UK’s Boudoir Privé, so in addition to adding an office in Paris, New York–based Birchbox is expanding its footprint to London and Barcelona. As more companies enter the beauty e-commerce market, including Fab and Beautylish, an international focus could help Birchbox keep ahead of competition.

“We always knew that we would be a global company because we believe wholeheartedly in discovery commerce,” said Birchbox cofounder Katia Beauchamp. “The business model really does translate…it makes sense for us to be international.”

With its first acquisition, Birchbox, which has raised $11.9 million from investors including Accel Partners, First Round Capital and Lerer Ventures, will add about 30 employees to its 90-person team.

Birchbox was founded in 2010 by Harvard Business School classmates Hayley Barna and Katia Beauchamp and sends over 100,000 subscribers a monthly box of beauty samples, which they can purchase in full size on the company’s website. The company initially focused on women but, earlier this year, expanded to include a men’s box of grooming and lifestyle goods.

Birchbox is often credited with giving rise to the recent trend of subscription commerce but, in recent months, the trend has come under scrutiny, with some saying it’s overhyped and over-saturated. On a panel this week at TechCrunch Disript, Sequoia Capital’s Alfred Lin (who is not a Birchbox investor) reportedly said there’s now a “Birchbox for everything.” Statements like that are good for the Birchbox brand, even the business model doesn’t fit every category.

But Birchbox distinguishes between “subscription commerce” and “discovery commerce,” with the former involving just the delivery of a monthly box of goods and the latter creating new demand among consumers.

“We’re not a box-of-the-month company — that is the very surface view of what Birchbox is,” Beauchamp said. “What we do is generate demand where there wasn’t any before.”

Of the company’s subscribers, she said, about 50 percent go on to purchase full-size items from the online store.

As for future international expansion, Beauchamp said Birchbox will first look to other European countries, then potentially explore other areas, like South America and Asia, with its brand partners.

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E-commerce engine BigCommerce raises another $20M

Ki Mae Heussner — Wed, 05 Sep 2012 14:29:09 +0000

E-commerce platform BigCommerce is getting even bigger. The Shopify rival, which has offices in Sydney, Australia and Austin, Tex., announced on Wednesday that it raised $20 million in Series B funding from current investor General Catalyst, as well as new investor Mike Maples of Floodgate.

The company, which powers the online storefronts for about 30,000 small- to medium-sized businesses worldwide, said the new funding would go to product development and an expansion of their sales and marketing team.

“We’re really proud that we can enable small businesses to compete with larger players,” co-founder Eddie Machaalani said in an interview. “We want to be synonymous with e-commerce for small- to medium-sized businesses.”

In the past year, the company, which raised $15 million in Series A funding last summer, said it has doubled its staff to 160 employees and plans to grow another 70 percent over the next two years.

As e-commerce grows globally, Machaalani said their platform can support clients as they grow from small startups to bigger companies that bring in a few million dollars a year. In addition to offering the tools for launching an online store on the Web and mobile platforms, the company provides under-the-hood online marketing and SEO technology to help stores attract and retain customers.

The company’s client base is primarily in North America (65 percent), but it intends to expand its presence in Europe, Asia and other regions.

In addition to offering clients their own tools, the company is enabling third-party developers to build on its platform with apps of their own. BigCommerce launched a $2 million fund earlier this year to support developers and has approved 300 apps so far. Shopify, which has also has a strong customer base created a similar fund when it announced its $15 million Series B round last October. In addition to Shopify, BigCommerce faces competition from eBay’s X.Commerce platform and Yahoo Merchant Solutions.

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Social lags search and email in driving ecommerce conversions, revenue

Ryan Kim — Fri, 10 Aug 2012 13:04:46 +0000

Social networks are driving more traffic to ecommerce sites, but they still lag behind traditional channels like search and email in conversions and average order value. According to Monetate, an online marketing provider that analyzes more than 100 million online shopping experiences, email was the leader in conversions to sales in the second quarter of this year, with 4.25 percent, ahead of search at 2.49 percent and social at 0.59 percent. When you look at average order value, search comes out on top with $90.40, followed by email $82.72 with social trailing with $64.19. These numbers come from Monetate’s second quarter ecommerce report.

Monetate, which serves more than 100 top commerce sites, reported in its first quarter study earlier this year that social traffic to ecommerce sites has increased by 77 percent in the past year. The company found that 73.19 percent of Facebook visitors view at least one product detail page, but they also don’t stick around on a site, with 45.67 percent leaving after viewing just one page. By comparison, 56.30 percent of visitors coming in from Google search view a product page, but just 25.69 percent leave after viewing one page.

The numbers are a reminder that social is still not up to par with other channels in driving actual sales and revenue. Networks like Facebook, Twitter and Pinterest can be good for building a relationship with consumers and prompting conversations around products. But, online retailers can’t expect that in-bound traffic from social networks to pay off in the same way as search and email.

Monetate Director of Corporate Communications Marifran Manzo-Ritchie told me that social is still new but many retailers have been measuring it by referral traffic. She said a fuller view of the effectiveness of social shows it’s still maturing as a commerce tool.

“Ecommerce providers are still using email and search because those methods are proven to work and they’re not going away. That being said, with the hype around social, it can be very tempting for an ecommence marketer to launch a full-scale ad campaign on social media, thinking that traffic = conversions. But with this kind of data now available, a marketer might think twice before betting the farm on social,” said Manzo-Ritchie.

Social can be a complicated tool to wield. It can definitely raise awareness and, for people who can establish themselves as a trusted authority on a social network, that can drive traffic. But the nature of many social networks means most people aren’t in shopping mode, so they’re not always ready to make a purchase.

It doesn’t mean investing in social media isn’t worth it. Social can still drive a lot of new commerce that might not have come through other channels. And for some retailers who integrate social well, there’s still a lot of upside. Fab.com, for example, said people who use social features on the site continue on to purchase more than twice as much as Fab members who don’t use social features. But retailers should be aware of the current limitations of social in driving revenue.

Image courtesy of Flicrk uses jsteebyphd.

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With $1M, Boomerang launches locally-focused social gifting platform

Ki Mae Heussner — Tue, 31 Jul 2012 14:00:48 +0000

Backed by Lightbank, the investment fund created by Groupon founders Eric Lefkofsky and Brad Keywell, Chicago-based Boomerang aims to provide a social gifting platform centered around local merchants.

The startup, which has raised nearly $1 million from Lightbank, MediaBank, InnerWorkings and Echo Global Logistics, launches Tuesday to let Facebook users send digital gifts, including vouchers for restaurants, spas, sporting companies and other local businesses, to friends in their network.

“We think gifting is a massive space where [local merchants] have traditionally been left out of the equation,” said founder and CEO Zachary Smith. “We think there’s a huge opportunity and we’re ready to jump on it.”

American consumers spend $100 billion a year on gift cards, he said, but the lion’s share of that goes to national retailers because local businesses haven’t been able to get distribution on the platforms centered around gifting. Through Boomerang, local merchants can offer unique packages of goods and services, from free options (which get new customers in the door) to full-price dinners, movie tickets, spa packages and more.

Much like Karma, the social gifting platform acquired by Facebook in May, Boomerang scans a user’s Facebook network for gift-worthy special occasions, like birthdays, anniversaries, promotions and more, and then it personalizes options based on location and interest data. Swedish social gifting startup Wrapp also delivers gifts, in the form of gift cards, to Facebook friends. But Smith said Boomerang’s focus on local merchants makes it distinct.

The gifts are delivered digitally via links through email or Facebook and can be redeemed by showing a merchant the offer on a smartphone screen. While Smith wouldn’t disclose the exact percentage of the transaction taken by Boomerang as a fee, he said it was in the low double digits.

In addition to working with local business, he said Boomerang will partner with at least one non-profit in each city to let gift-givers make donations in recipients’ names. For now, the 10-person startup has partnered with 40 merchants in Chicago, including the Navy Pier IMAX Theater, Metropolis Coffee and Bike and Roll Chicago, but Smith said they have started hiring teams in two other cities and plan to go live in those areas later this month.

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SafePay wants to use smartphones to combat online fraud

Ryan Kim — Thu, 26 Jul 2012 12:00:40 +0000

While online merchants have been getting better at combating online fraud, it still cost them $3.4 billion last year, or about 1 percent of online revenues. Now a Toronto startup is hoping to help reduce that figure by employing an increasingly ubiquitous tool: the smartphone.

SafePay Solutions Group is launching a tool in the U.S. and Canada for merchants and consumers that uses a smartphone to verify online purchases. It gives merchants an added layer of protection against fraudulent purchases and helps users prevent someone else from putting purchases on their card. But it will face a lot of challenges in trying to make an impact.

Here’s how it works: A consumers downloads the free SafePay app (on iOS for now with Android, Windows Phone and BlackbBerry coming later this year) and enters in their billing address and the first and last six digits of all the credit cards they want to register with SafePay. When that customer or someone who obtains the user’s credit card number tries to make a purchase at a site that uses SafePay, the user is sent a real-time in-app push notification alerting them to the transaction and providing them 60 seconds to approve or decline the sale.

SafePay starts working the minute it recognizes a user’s address or credit card numbers during the shopping cart process. If the user declines a purchase through a push notification, the transaction is canceled. If a user isn’t near their smartphone to deny a fraudulent charge, the merchant processes it like any other transaction. But users can flag the transaction and report it after the fact to their bank or credit card company. SafePay is working on a feature for this fall that will allow a user to set a default denial if they don’t respond to a push notification.

SafePay’s founder and CEO Mick Bhinder, a veteran of Visa, American Express and Discover, said the service will roll out first with five unnamed online retailers. Retailers will pay a $240 annual subscription for SafePay. He believes many merchants will find this valuable because of the potential for reduced fraud liability.

“The credit card companies and banks have said merchants are 100 percent liable for fraud. Our solution prevents losing bottom line revenue from fraud and it also protects consumers,” Bhinder.

SafePay is part of a growing number of mobile tools aimed at combating online fraud. Banks in recent years have rolled out mobile fraud alerts, sending messages to users when a transaction looks suspect. SafePay, however, is different in that it takes a merchant angle and also asks for every purchase to be verified, not just suspicious transactions.

But it faces some big challenges to really make a dent in online fraud. Merchants will only find protection and significant cost savings if a large number of users sign on. But users won’t have much need for the service unless a lot of big name retailers are on board. Even if a user signs up and there are a good number of sites participating, a thief could still use stolen card information on thousands of sites that don’t employ SafePay. Unless it’s somehow comprehensively rolled out on most big retail sites, it’s going to be hard for SafePay to really cut into online fraud.

I’d be more optimistic if SafePay was used by banks or credit card companies, who can encourage their merchants to participate. But the financial institutions don’t bear as much penalty for fraud as the merchants do so they might not have a big sense of urgency. Still, I’d like to see a smartphone powered service like this gain acceptance at some point. We have smartphones with us all the time and they can act as a real-time tool to spot and prevent fraud.

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