GigaOM » online shopping

Why retailers should forget showrooming and turn to in-store Wi-Fi

laurielamberth — Mon, 06 May 2013 06:55:36 +0000

Showrooming. Everybody’s heard of it by now — conniving shoppers checking out a product in a retail store, then buying it online later for less. But today it makes more sense for retailers to shift their focus away from this practice and focus on harnessing the shopper’s in-store wireless experience for themselves and their brands. In addition to making mobile-data-hungry customers happy, customer-facing in-store Wi-Fi networks will bring the retailers themselves much value.

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Frenemy mine: The pros and cons of social partnerships for online media companies

Tue, 16 Apr 2013 20:50:29 +0000

For online media companies, social platforms like Facebook and Twitter bring many opportunities as well as risks. An intelligent and proactive social media strategy can expand a brand’s reach. But the more heavily a media company relies upon a social media platform the more it relinquishes control over the customer experience.

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Want to get people shopping socially? It might be harder than you think

Eliza Kern — Tue, 09 Apr 2013 23:19:21 +0000

When it comes to online fashion and large digital brands, it seems social shopping might have hit a plateau. It’s pretty standard now for companies like Amazon or Nordstrom to display products along with buttons for sharing to Twitter, Facebook, or Pinterest. Products might have reviews and photo galleries, or the company might have its own blog.

But beyond that? There isn’t much social activity happening on most of those larger sites.

I sat down with the team at Zappos Labs last week to talk about the future of online shopping. It’s not like Zappos is struggling to find shoppers, but the company’s leadership clearly understands that as the world moves more toward social media adoption, there must be ways to use social to boost sales and improve the shopping experience.

“It’s hard for us to think of new ways to shop when people are keeping the lights on of a 2 billion dollar e-commerce site,” said Will Young, director of Zappos Labs. But social media for large e-commerce sites is tricky. ”For a lot of people, they just want their shoes overnight. And they want free returns.”

So where is a team like Zappos looking for inspiration?

Young immediately pointed to sites like Poshmark or Pinterest as having built strong communities around liking and sharing particular items. I’ve written about Poshmark before, and there’s no doubt users are engaged on the platform, but it’s unclear how many people are actually turning those likes into purchases. Wish lists do not always turn into shopping lists, even if the engagement is strong, although some sites like Wanelo are trying to change this.

And then Young pointed out that you have sites like Modcloth or Lululemon or NastyGal, which have built notoriously passionate communities of shoppers around fairly niche products, and turned those shoppers into sales. But those companies have very clearly-defined products and target audiences.

But for Zappos or Nordstrom or Amazon, who can’t just settle for targeting one specific demographic, like young women? They need to figure out if they can grab any of the social elements these other sites are using so well, and then apply them to a broader audience.

“If our main goal was just to do sales, we’d just be creating coupon applications,” Young said, noting that Zappos Labs is dedicated to understanding how people shop. “That’s one of our big challenges. Which is, how how do we put social only in front of people who care about it? Building communities is tough when we’re so wide.”

So what has Zappos come up with so far? The company has tried out a Pinterest recommendation engine that was fairly hit or miss in terms of the products it suggested, but they said it had enough positive reactions that they’re looking to improve it. They’re also trying out a site called Glance that shows curated groups of items around particular themes that users can like and save, since discovery on a site like Zappos that has so many products can be a challenge. And the company has experimented with collecting all the tweets about individual products to serve as a sort of crowdsourced Twitter review.

Young pointed out that for the majority of the company’s shoppers, getting them into the idea of social shopping at all can be tricky.

For most of our customers, “they’re on Facebook. They’re probably on Twitter,” he said. “But when they come to a site like Zappos they don’t always want to link their Facebook account or anything. They might like our fan page, but how do we create a social experience for those users?”

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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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After false start, insurance comparison site Leaky nets $670k, launches nationwide

Ki Mae Heussner — Wed, 05 Dec 2012 17:00:02 +0000

After a bit of a bumpy start, Y Combinator-backed insurance comparison site Leaky is getting off the ground.

On Wednesday, the San Francisco-based startup said it had raised $670,000 in seed funding and opened up its site to users nationwide. The funding came from 500 Startups, Box Group, Start Fund, Y Combinator, and several angel investors.

The company initially launched in August 2011 with a site that compared car insurance quotes from top agencies and quickly gained traction among users. But it was forced to go offline and back to the drawing board after insurance companies sent it cease and desist letters because the startup was scraping data from the insurance companies’ web sites.

Leaky (as in “we keep your wallet from leaking”) relaunched in March of this year, but only in California, after finding a way to reverse engineer insurance estimates based on publicly-available data and insurance documentation.

“Innovation in insurance has always been sparse,” said co-founder and CEO Jason Traff. “There are very few people who are doing impartial comparisons that are beneficial to the user.”

Several services help car owners get online quotes, including Progressive, which lets people see a comparison of price estimates, and Insurance.com and CarInsurance.com, which include samplings of actual prices. Bu Traff said the latter two sites are limited by their ability to only show prices for insurers who have partnered with them, which won’t include prices from most of the largest insurers.

On Leaky, users take about 2 to 3 minutes to complete a questionnaire asking about their location, demographics and car-related questions, and then the site returns estimates from an average of 10 to 11 insurance companies, the company said. Additionally, the service monitors users’ insurance profiles and alerts them when they may be able to save more by switching plans.

For now, the company is focused on auto insurance but Traff said Leaky, which is actually a licensed insurance agency, plans to expand into other kinds of insurance. The service will always remain free for users, he said, but as Leaky expands it intends to make money from sponsorships.

At the moment, not too many startups are taking on the insurance industry. But Leaky isn’t completely alone in its mission. CoverHound, a 2011 graduate of the AngelPad incubator raised $750,000 to similarly help car owners compare insurance quotes.

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Content and commerce collide: is it harder for publishers or e-tailers?

Ki Mae Heussner — Tue, 04 Dec 2012 23:16:37 +0000

When it comes to online content and commerce these days, it seems like everyone wants to be in everyone else’s business. E-commerce companies like Birchbox and Gilt Groupe talk up the value of an “editorial voice” (even hiring professional content creators to back that up). And recognizing the limitations of traditional display advertising, publishers from The New York Times and Bonnier magazine to newer players like Thrillist and Gawker are turning to their readers as a source of commerce.

“This notion of content being here and commerce being there doesn’t really exist any more. Everyone has become a publisher,” Lerer Ventures partner and former Huffington Post CEO Eric Hippeau said Tuesday at Group Commerce’s Think Commerce conference in New York.

But, as content and commerce merge, he added that “it’s a lot easier for commerce brands to become publishers… than it is for people on the media side to add commerce.”

Historically, publishers have respected the line between “church and state,” separating editorial content from advertising and commercial content. Even Condé Nast’s Lucky fashion magazine, which is perfectly positioned for commerce, has not made the transition, he said. (Although the recently-launched iPad app does include direct links to products.)

And, it’s easy to understand why that bridge is difficult to cross. In addition to the cultural resistance against compromising an editorial identity with a commercial interest, e-commerce involves creating a whole new business model, with potentially new margin structures, customer service needs and other requirements.

How much credibility can commerce companies earn?

Interestingly, however, Philippe von Borries, co-founder of fashion and beauty site Refinery29 recently told Pandodaily that he thinks it’s commerce companies who have more challenges crossing over into publishing. “No one gives a shit about content from a commerce company,” he said, explaining that his is a media company that uses content to drive its commerce business. While media companies come from a place of credibility, he believes that any content from commerce companies will only be viewed as a kind of sophisticated marketing.

But while it’s true that a customer may never look to Warby Parker or Gilt Groupe for a position on, say, the fiscal cliff, it doesn’t mean that commerce companies can’t be credible purveyors of content within the verticals on which they focus. And, as Hippeau said, as social platforms turn everyone into some kind of publisher, the definition of “content” itself is changing, in turn altering what it means to be in the media business.

Thrillist: we’ve turned readers into buyers and vice versa

One company leading the way in the new world of content-meets-commerce is Thrillist and, at the Think Commerce conference, Ben Lerer, the company’s co-founder and CEO, said that more than half of Thrillist’s nearly $70 million annual revenue comes from Jack Threads, the e-commerce site it purchased in 2010.

“We’ve proven that we can turn a reader into a buyer,” he said. “We’re pleased that we can also turn a buyer into a reader.”

But despite Thrillist’s own success, he acknowledged not all media companies are as well positioned to cross into commerce. From its launch, Thrillist’s value proposition was a site that recommended ways in which young men should spend their time – an ideal starting point for a commercial relationship. But news and sports publishers, even those with engaged audiences, may have a more difficult time with commerce because their content isn’t recommendation or action oriented.

Shana Fisher, managing partner at High Line Venture Partners, said that while it can be tricky to focus on two revenue streams at once and that companies initially supported by advertising revenue (like nearly all media companies) may find it difficult to later ask customers for credit card information, more companies should blend revenue strategies based on content and commerce.

“In verticals that are transactional, the divide is really small,” she said, highlighting food and fashion. “If it’s not related to something that’s transactional, it’s more abstract.”

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Social commerce site Polyvore, now cash flow positive, launches mobile app

Ki Mae Heussner — Tue, 27 Nov 2012 21:00:02 +0000

Polyvore‘s community of fashionistas is finally getting a mobile app of its own. On Tuesday, the five-year-old startup plans to launch a free iPhone app that brings much of the platform’s desktop functionality to mobile.
The new app caps off a year of strong growth for the company, which saw traffic climb 90 percent since the start of the year to 19 million monthly unique visitors. It has increased revenue nearly 2.5x and almost doubled its staff to 55 people in Mountain View and New York. Last June, the company told GigaOM it had reached profitability and, as of the second quarter of this year, it has become cash flow positive, co-founders Jess Lee and Pasha Sadri told me. Earlier this year, the company raised $14 million in funding from Goldman Sachs and others, bringing its total raised to $22.1 million.
“Polyvore is for millions of people around the world who love to express their sense of style,” Lee said. “It’s like a magazine but instantly shoppable and all created by the community.”

Through the site, members can assemble collages of products (called sets) that can be shared with other users. They can also follow other members, “like” each other’s creations and then purchase items from the site. Users can also browse items by category, style, color and other variables, as well as search for specific kinds of items.

Last November, the company launched a mobile-optimized site and, like other e-commerce platforms, has watched its mobile traffic soar. Already, 25 percent of its overall visits come from mobile, Polyvore said. But with the new app, users will be able to do more than they could on the mobile site, such as assemble sets and receive push notifications with messages from other members.
When Polyvore launched in 2007, fewer startups were taking on fashion and social commerce. But over the years, fashion and e-commerce have grown significantly, with the rise of Gilt Groupe and other sites. More recently, social commerce startups, such as Fancy and smaller rivals like Uncovet, have also taken off offering fashion items (as well as other kinds of products) online.

Given that iOS Polyvore users outnumber their Android counterparts by a ratio of three to one, Lee said the company plans to focus on apps for Apple products first (an iPad app is also in the works) and then later launch on Android.

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Design shopping site Fab partners with LivingSocial for distribution

Ki Mae Heussner — Wed, 21 Nov 2012 22:32:24 +0000

Design-centric shopping site Fab is getting a new distribution partner for the holidays. On Thursday, the New York-based company announced that it would curate a special collection of items for deal site LivingSocial‘s gift guide. As part of the deal, LivingSocial will promote the gifts on its site and in emails to its 24 million U.S. members.

Fab, which has 9 million members and its own set of Holiday Shops launched earlier this month, already has strong traction and reach. But the new distribution deal – which the company said is just the second after it’s deal with Facebook – will allow it to access even more shoppers.

“It’s an opportunity for us to get the Fab brand and products out in front of another large user base,” CEO Jason Goldberg told the Wall Street Journal. “Whether it’s LivingSocial or Facebook, it’s less about selling a specific product and more about how do we get introduced to customers we might not be reaching otherwise.”

Though the deal helps Fab reach a broad audience, it was apparently LivingSocial who initiated the conversation, the Journal reported. LivingSocial might have more members, but Fab has a strong following among design-lovers, which could help build LivingSocial’s brand.

The terms of the deal have not been disclosed, but the Journal reported that it will be profitable for Fab, which earns revenue from the product sales, while LivingSocial receives a marketing fee for distribution.

Fab has already had something of a banner year. At the start of the year, it had just 1.5 million members but has been growing steadily. It raised a massive $105 million round of funding in July (and added another $15 million earlier this month) and reaches customers in 26 countries.

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Hukkster and Trunqit: never miss a sale for a coveted product

Ryan Kim — Tue, 20 Nov 2012 20:58:38 +0000

Shopping is its own reward for many consumers, but getting a deal on a coveted product can make a purchase even sweeter. This holiday season, consumers have more tools to ensure they are up to date on price drops and sales for sought after items.

New York-based Hukkster launched in this past summer, allowing people to “hukk” or pin a product using a browser bookmarklet. When you come across a product you want to buy but would like to get for a cheaper price, you just hukk it from your computer and Hukkster will alert you via email or text message you when it goes on sale. So instead of opening up an inbox full of retailer emails on sales for things you don’t always want, you can just see when the item you’re pining for is now within reach.

Hukkster scrapes data from hundreds of websites including J. Crew, Macy’s, Bloomingdale’s and Anthropologie. If a user isn’t ready to buy immediately, Hukkster will continue to send alerts until the item is removed from a user’s Hukk list. It can also send alerts on items with coupon or promotion codes.

Hukkster’s co-founders Katie Bell and Erica Finnegan last week raised the company’s total funding to $1 million, including $750,000 in new money led by the Winklevoss twins. The two met six years ago as merchandisers at J. Crew and reunited as management consultants before giving their idea a go in April.

Hukkster co-founders Erica Bell and Katie Finnegan

Bell told me Hukkster, which now has 30,000 registered users, works for consumers because it’s not overtly social, so it allows people to shop and save items without feeling like they need to broadcast their shopping list. She said retailers also win because they can move inventory that might not get purchased were it not for sales alerts.

Hukkster doesn’t have direct partnerships with retailers but Bell said the company will pursue those next year. That could mean direct data feeds from the retailer and potential revenue sharing. More immediate plans are in place for an iOS app which is coming soon.

“Consumers and retailers don’t speak today. Retailers are putting out marketing campaigns and consumers are getting frustrated with hundreds of emails. We think we can facilitate those conversations,” Bell said.

Trunqit, another New York City startup, is now coming out of stealth with its own shopping tool, an iPad app that allows people to browse certain stores through the in-app browser and save products they want to track. Trunqit then sends alerts when the product goes on sale.

Trunqit is trying to make its name by going mobile first, banking on people’s affinity for shopping via a tablet. The app also features different ways to discover what other shoppers are saving or “trunqing.” So users can filter by products or stores to see what sales are going on and what products other users are trunqing. Mick Malisic, the founder of Trunqit also created a separate iPhone app called Salestreme that allows people to just see streaming sales information.

So far, the service is starting off more slowly with more than 20 stores supported including Pottery Barn, Crate & Barrel, Victoria’s Secret, Zara and others. Additional stores will be added each week and Android and browser-based versions of Trunqit are also planned.

Malisic told me he tried to start on a desktop browser but found the experience to be “sub-optimal.” He said the iPad provides a cleaner experience and it’s where shoppers are moving to.

“It’s like the Wayne Gretsky quote: we’re skating to where the puck is going to be. Things are going mobile now,” Malisic said.

Malisic, former director of marketing at Frog Design and founder of Hedgeye and Kapitall, said the focus right now is nailing the consumer experience. But like Hukkster, he sees business opportunities in providing a utility to retailers.

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Birchbox goes ‘home’ for the holidays with higher-priced lifestyle box

Ki Mae Heussner — Thu, 15 Nov 2012 15:00:14 +0000

Discovery commerce startup Birchbox isn’t just a pretty face. After launching in 2010 with a monthly box of curated beauty products for women, the startup began offering a subscription-based box of grooming and lifestyle goods for men earlier this year. On Wednesday, the New York-based company announced that it’s dipping its toes in yet another vertical with the limited-edition roll out of Birchbox Home, a collection of home goods and accessories, design products and gourmet food items, launched in time for the holiday season. In addition to the box, the company launched a corresponding online store offering the same kinds of goods.

“We loved home because within that category there’s a lot you can do,” said co-founder Katia Beauchamp. “We felt that it wouldn’t become repetitive or boring — we could be creative with it.”

Items in the one-time box include home decor goods from designer Jonathan Adler, gourmet goodies from Dean & Deluca and stationery from Paperless Post. The home-themed box is $58, which is significantly more expensive than the $10 original box and $20 men’s box. But Beauchamp said the items included are valued at about $140 and that the company opted for a higher-priced package because they wanted to showcase the potential of a home-centric Birchbox. When the company launched a special-edition men’s box last holiday season, it was also on the pricier side but they lowered the cost when they decided to make it a monthly product.

The higher price tag could be a deterrent for some customers. But those who already look forward to their monthly beauty box could trust Birchbox’s taste enough to spring for limited edition offer.

For now, Birchbox, which says it has 300,000 subscribers and 400 brand partners worldwide, is focused on selling the thousands of one-time boxes it’s produced in time for the holidays. But as with the men’s box, if the response is positive, Birchbox Home could become a regular offering.

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