The Wallaby Card | Wallaby Financial. The Next Big E-Commerce Wave: Vertically Integrated Commerce. Editor’s note: Boris Wertz is the founder of version one ventures, and has invested in more than 35 early-stage consumer Internet and mobile companies, including Chloe & Isabel, Julep, and Indochino. Follow him on his blog and Twitter. There has been more e-commerce innovation during the past year than there has been during the last decade. First, flash-sale and daily-deal sites brought a much-needed breath of fresh air to a vertical that hadn’t seen much change since Amazon and eBay arrived on the scene. Now there’s a whole new generation of e-commerce players. Ever heard of Nasty Gal, Warby Parker, Indochino, Stella Dot, Chloe & Isabel, Frank & Oak, Julep, Beachmint, Shoedazzle, ModCloth, Everlane, Bonobos or J Hilburn?
Together, this group of companies will generate over a billion dollars in revenue in 2012. These web-only brands are vertically integrating the retail value chain, including manufacturing, branding, and distribution. 1. 2. Warby Parker has its own brand. 3. Wittlebee Grabs ShoeDazzle Customer Acquisition Superstar Chris Nella. By Michael Carney On October 4, 2012 As any successful entrepreneur will say, assembling the right team is key to any venture.
Nine-month-old kids fashion subscription ecommerce company Wittlebee just took a major step in building its roster with the addition of ShoeDazzle Director of Customer Acquisition Chris Nella. “Chris is easily one of the top acquisition experts in the space,” says founder and CEO Sean Percival. “His experience and ability to deliver convenience, value, and discovery are a perfect match for Wittlebee,” As Percival says, Chris is known as one of the best around, as demonstrated by his presiding over ShoeDazzle’s growth from 200,000 to 14 million members. It’s no secret that there has been some turmoil and executive turnover at ShoeDazzle in recent months, including most recently the return of founding CEO Brian Lee. “I never intended to move on from the ShoeDazzle team, but I was sold by Sean’s vision and immediate success,” he explains.
[Image courtesy BIGDOG3c] The beauty of Birchbox: it’s not subscription commerce, it’s marketing that women actually pay for. By Erin Griffith On October 19, 2012 Birchbox is one of those startups that’s hot with the New York tech cognoscenti but not everyone, here or in the Valley, understands exactly why. It tends to get lumped in with subscription commerce sites, but that’s not right — what it’s building is much more impressive. I only realized that this summer, when I decided to actually shop at many of the commerce startups I write about.
With Birchbox, though, I’m decidedly not its target demographic (or so I thought). I’m firmly anti-subscription commerce (it’s a fad!) The company created a loyal beauty products customer out of thin air, and perhaps the worst part is I don’t even regret it. Co-founder Katia Beauchamp calls it discovery commerce. If you think about it, Birchbox has figured out a way to get women to pay money to be marketed to. That doesn’t happen with a magazine. So we pay, happily, to get boxes full of samples — all of which Birchbox sources for free. Neighborhood Residents Can Now Decide Which Businesses Will Come To The Area. You may have seen Jeremy Bailey‘s work before, though he’s not quite as famous as he purports in his video projects. Bailey’s schtick is a familiar one: a bespectacled, over-optimistic character with a whiny voice braying on about his fantastic inventions and the notoriety they’ve gained him. It’s all part of an act, a narrative about media innovations that would catch on big in a weirder world.
Bailey’s most recent invention is humbly dubbed The Future Of Television, a system used to project multiple TV channels onto one’s face, with the ability to change channels by making various facial movements. What it ends up being is an expressive mask of your personal choice in television programming, which can actually say a lot about you. Would you include your guilty pleasures on your TV mask? As mindless as it might seem at times, the visual aesthetic of TV can inspire some strangely beautiful imagery, likeembroidered renditions of TV stills or glitched out classic movie scenes.
4 ways to compete in Amazon’s shadow. “If it has a UPC code, Amazon will beat you.” Thanks to a bigger inventory, low prices, convenient return policy, trusty user reviews, and services like Amazon Prime, Amazon is the world’s largest retailer and doesn’t seem to be moving from that position any time soon. But even in the shadow of Amazon, there are several opportunities for entrepreneurs to make a dent in e-commerce. Here are four ways: 1. Unique product line: As I recently wrote in TechCrunch, a new generation of web-only brands are bringing their products directly to consumers without the bloat of the traditional retail value chain.
Together vertically integrated retailers like Warby Parker, Indochino, Stella Dot, Chloe & Isabel, Frank & Oak, Everlane, Bonobos and J Hilburn will generate over a billion dollars in revenue in 2012. By creating their own unique brand and offering products that can’t be found elsewhere, these retailers don’t have to worry about competing head-to-head with Amazon and Amazon prices. 2. 3. 4.
S-commerce. Passbook Gives App Store Apps Massive Position Boost. Whatever the concerns have been about Apple’s Passbook and educating customers so far, it’s clear that people really want to use it. The introduction of Passbook support to a variety of ticketing apps has seen their popularity skyrocket in the App Store. Nearly every ticketing app that has implemented Passbook since Apple released iOS 6 on the 19th of last month has gotten an in-category boost as well as a cross-category boost in its placement on Apple’s charts.
The graphs below are from the apps’ entries on the popular App Store tracking service AppShopper. Each of the vertical growth spikes you see in category positions coincide directly with their Passbook support updates. It doesn’t hurt that Apple has featured these Passbook supporting apps in a dedicated section of the App Store that is accessible via a button directly in the initially empty Passbook app on the home screen of every iOS 6 device. There are more apps in the category and they all show an increase. Takeout Food Ordering App, PayDragon Makes A Pivot To Offer One-Click Household Good Purchasing. I’ve been following Paydragon, a startup that launched at SXSW’12 for some time now.
It launched as a mobile app allowing users to place restaurant takeout orders (mainly food trucks), purchase inside the app and then pick up their orders once the food is ready. From the beginning, they told investors their plan was to “offer the easiest solution for consumers to buy any offline product from their mobile devices.” They’ve done just that in an update today. I loved the concept then but I love their pivot announced today even more! Essentially the new functionality allows users to scan the bar code of any household item, place the order with one-click and then have the item shipped to their door in two to three days. The app also adds an element of gamification that can garner rewards and discounts based on purchase volume.
The idea is to get consumers comfortable with ordering items the moment they recognize the need, while they’re in their pantry. Like this: Like Loading... Ecommerce: The Supply Chain Perspective. By Michael Hsieh On July 2, 2012 To build a successful ecommerce business, it’s critical to make sure customer lifetime value is higher than customer acquisition cost. Jeremy Liew‘s article “Why Do Ecommerce Startups Come in Waves?”
Provided insightful analysis of this point. Not mentioned, however, are two variables that play a major role in determining the viability of ecommerce startups – supply chain and logistics efficiency – which are often ignored by entrepreneurs and investors. This oversight can be extremely costly and therefore should be factored into their analyses. To start, it is instructive to look at the evolution of retailing in the past century. Over the next 50 years, Sears opened large format stores which eventually eclipsed and shuttered the catalog business. Therefore, when we look at online retailing, it is actually not a new phenomenon but the re-emergence of a previous catalog model with new and more powerful capabilities.
[Image courtesy Tetrapak] Why Do Ecommerce Startups Come in Waves? By Jeremy Liew On June 20, 2012 It may seem daunting to think about starting a company like Amazon, Zappos, or Shoedazzle* from scratch. But at its core, ecommerce is a simple business. If Lifetime Value (LTV) > Customer Acquisition Cost (CAC), then you have a business. If not, you don’t. Simple! Calculating lifetime value properly can take a bit of work. It is a function of purchase rates, average order size and contribution margin. In most cases, larger companies have a real advantage over smaller ones on both LTV and CAC. In a steady-state environment, lifetime value is reasonably constant, and well understood by all competitors in an industry. So where is the opportunity for a startup? The answer is that the environment has not been steady-state. Before we look at the present in detail, it’s useful to look at the past. The first period was in the late 90s.
Even mighty Amazon grew and benefited from these portal deals. Now, let’s come back to today. [Image courtesy mikeyskatie]