GigaOM » Social Commerce

Social fourth-quarter 2012 analysis

Mon, 21 Jan 2013 15:49:29 +0000

Interest may be weakening in consumer social media businesses. But social technologies are working their way deeper and deeper into enterprise computing, and social media is playing a bigger role across advertising and marketing sectors. In the fourth quarter social business software went both vertical and horizontal, Adobe and Behance built in community, and Facebook tested new revenue streams.

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Social 2013: The enterprise strikes back

Wed, 19 Dec 2012 07:55:38 +0000

In 2013 look for the action in social technologies to be increasingly enterprise-focused. In 2012 investors soured on consumer social media companies: Groupon, Zynga, and even Facebook were deemed disappointing. Arguably, Facebook left no money on the table. As it began to show revenue from mobile by the year’s end, its stock began to recover, but the damage was done. So a different set of companies will drive innovation and perhaps a little disruption in social technologies in 2013. Look for the likes of Salesforce.com, Jive Software, and other enterprise players to make headlines in the new year.

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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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Techstars-backed Pickie raises $1M for Flipboard-like app for shopping

Ki Mae Heussner — Mon, 29 Oct 2012 15:00:17 +0000

Tech-savvy shoppers who look to their friends for purchasing inspiration, can already turn to platforms like Pinterest, Fancy, Fab and plenty of others. But with a Flipboard-like app for the iPad that aggregates social activity across shopping sites, New York-based Pickie believes it can get in on the social commerce action, too.

The startup, which is a recent graduate of TechStars New York, is announcing on Monday that it is launching in Apple’s App store with $1 million in seed funding.

The round was led by DFJ Gotham, and included Betaworks, Liberty City Ventures, Bertelsmann Digital Media Investments and MESA+. It also included several angel investors, such as Buzzfeed president and COO Jon Steinberg, TechStars New York’s former managing director David Tisch, SessionM CEO and co-founder Lars Albright, Highland Capital Partners’ Andy Miller and Epsilon EVP Eric Stein.

We first covered Pickie back in June, when it was still in beta but already an interesting entrant into the growing social commerce space. Recognizing that more startups and established companies would marry social features with e-commerce, Pickie’s pitch was that consumers would want one destination that would filter through all of the social recommendations and highlight the most interesting and relevant items. In addition to showcasing the products at the center of social activity, Pickie layers in original content, as well as eventually more content from publishers, to give it an editorial identity.

“Long-term, the plan is to build out content and make it feel more like a magazine than a catalog,” said co-founder and CEO Sonia Sahney Nagar.

When users first sign in to the app, they indicate their gender and top categories of interest. Then, Pickie integrates with Facebook, Twitter, Pinterest and other social sites to identify the products that are attracting the most attention from users’ friends. From that social data, the app generates a custom magazine of items, enhanced by relevant articles. For now, Sagar said, most of that additional content is produced in-house. But over time they plan to expand with more content from third-party publishers, so that a drop-waist dress could appear alongside a Glamour article on the trend or a book could be featured with a New York Times book review.

For now, the company makes money through affiliate commissions. But, down the line, Nagar said, the plan is to host transactions and charge a fee, as well as work closely with retailers to offer dynamic catalogs through the app.

Personalization and social are two huge trends in e-commerce, so Pickie is hardly without competition. The startups mentioned earlier, as well e-commerce giant eBay (which recently acquired New York-based Svpply) all want to be a place where consumers discover products. And Google Catalogs and CoffeeBook both provide a tablet-based magazine-like experience for browsing new items (although they’re not as focused on social curation). Pickie may be a helpful app but it remains to be seen whether consumers feel like they need an aggregator when they can just go to the sites they know well directly.

Still, similar to how Flipboard found success by using social data to assemble a personalized magazine for news, Pickie could draw in users with a personalized magazine for shopping. And, as I’ve mentioned previously, Nagar and her founding team seem to have the experience that fits their goal. All three co-founders are engineers who previously worked at Amazon, Microsoft and Applied Predictive Technologies (a big data company that works with top retailers).

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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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Fancy that, Pinterest rival brings yet another subscription box to market

Ki Mae Heussner — Thu, 20 Sep 2012 18:13:35 +0000

Subscription commerce has taken a few hits over the past few months for being over-hyped and over-invested, but that isn’t stopping social shopping site Fancy from launching a new box-of-the-month of its own.

Starting today, Fancy users can sign up to purchase a $30 monthly box curated by the site’s two million members. When they order the box, members can indicate their favorite categories and Fancy populates the box with some of the most popular items in those categories.

A picture of a sample box shows what appears to be lower-priced, knick-knack type items (such as a watch band, T-shirt and a pack of gum), but the New York startup says each box exceeds $60 in retail value.

With all the possible kinds of subscription boxes out there – from cosmetics to eco-friendly products to food for all kinds of diets, you’d think consumers wouldn’t be looking for another box of the month. But Fancy COO Michael Silverman said in an e-mail, “this was a feature our users were asking for and we decided to act on it as the holiday season approaches.”

To Fancy’s credit, the company has been especially active creating new ways for consumers to actually purchase the products they curate in a Pinterest-style way on the site. Last week, it launched a new group gifting option and earlier this summer it rolled out a program to compensate users for their actions.

A monthly Fancy box is an interesting idea, but I’m curious to see if the company can fill it with items that people actually want. Several of the most visible popular items on Fancy cost in the hundreds, if not thousands, of dollars. And, personally, I’m not sure I’d be into some of the cheaper items (like graphite skulls and a vampire fangs ice tray). But the company is clearly busy cooking up ways to turn curation into commerce and the new box is yet more evidence of that.

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Pinterest rival Fancy gets into group gifting

Ki Mae Heussner — Sun, 16 Sep 2012 16:23:10 +0000

While the tech world waits for Pinterest to reveal a money-making strategy, social discovery rival Fancy is rolling out yet another shopping feature.

The New York-based startup, which lets people curate and purchase items through its site – and even compensates users for their actions – is now giving users the option to organize group gifting on its platform.

The new feature, which the company said has been a popular request, enables users to organize a gift, invite others to contribute and have the gift sent directly to the recipient. If the gift invitation doesn’t receive enough contributions within seven days, it expires and the company refunds all of the money.

eBay, which acquired group gifting startup the Gifts Project a year ago, also gives users the option to chip-in on a joint gift. Swedish social gifts startup Wrapp offers a similar feature. The startup FriendFund provides a platform explicitly for group gifting.

For Fancy — which is steadily building a business but trails Pinterest in numbers — the group gifting option gives non-members a new reason to join the site.

The startup also announced a partnership with American Express, which enables members who sync their cards with Twitter to receive $20 back on their next purchase of $100 or more if they tweet #AmexTheFancyOffer. The deal doesn’t extend to all items and only lasts through the end of the September, but Fancy said it’s the beginning of an extended relationship with American Express.

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Treater nets $2.5M for just-because social gifts

Ki Mae Heussner — Tue, 21 Aug 2012 11:30:14 +0000

Next time a friend posts a message on Facebook about a big win at work or a bad day, you can do more than just “like” the message or say you’re thinking about them, social gifting startup Treater wants to help you send them an actual physical, consumable gift.

Yes, startups like Karma (which was purchased by Facebook in May), Wrapp and Boomerang already use Facebook as a platform for sending tangible gifts and experiences to friends. But Washington, D.C.-based Treater, which Wednesday launches to the public, doesn’t want to focus on formal occasions (as the aforementioned rivals do), it wants to offer a platform for sending casual, impromptu gifts.

“It’s all the little things that are a little bit more meaningful than a like or a post to show you’re thinking about somebody,” said CEO and co-founder Jeff Ross.

In addition to coming out of beta, the company is announcing that it has raised $2.5 million in seed funding from several funds and angel investors. As part of the round, the company will add to its board Fred Schaufeld, managing director of SWaN Investments and founder of NEW Asurion Corporation; Jack Davies, founder and former president of AOL International; and Gene Riechers, former general partner at Valhalla Partners.

In broad strokes, the service seems to work much like Wrapp and Boomerang. Users select the Facebook friend they’d like to send a gift and, through the platform, they can notify the recipient of the gift. But while Wrapp and Boomerang are focused on higher-ticket items (with the former partnering more with national retailers and the latter working closely with local merchants), Ross said Treater is focused on lower-priced items, such as Peet’s coffee from Peet’s or a Chipotle burrito.

By zeroing in on the lower-value items, Ross said, the company hopes to expand the circle of friends to which people might gift from a handful of people who might get a $100 present to dozens who could receive $5 gifts.

Once gift-givers select a friend and an item to gift – from a cupcake or beer to movie tickets or a lunch – as well as a personal note, Treater sends a message to the recipients smartphone via Facebook wall post, text message or email. To redeem their gift, recipients show the “treat card” (a one-time-use credit or debit card) on their phone. Treater takes a cut of the transaction. Some of the merchants who accept treat cards include Peet’s Coffee, Caribou Coffee, Cosi, Chipotle and Urban Outfitters.

For gift-givers, it’s an easy way of sending friends a “thinking-of-you” treat. And, for the merchants, it’s an interesting way to use social media to drive commerce and traffic, without discounting goods and services. I’m curious to see if Treater can encourage more spontaneous gifting, as that seems to be its biggest point of differentiation. But the startup is is entering a crowded field and, while its rivals play up formal occasions, they could easily shift their positioning. In addition to Wrapp, Boomerang and Karma, Starbucks offers consumers a way of sending redeemable digital gifts to Facebook friends, and CashStar and SocialGifts enable other retailers and chains to do the same.

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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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