Since the early 90s, mega companies such as Amazon and eBay have been using ecommerce to reach a wide customer-base. Now, startups everywhere are making use of this convenient, online industry. This past week at the Apple Store in SoHo, Women Innovate Mobile hosted their monthly tech panel, to address the popularity of ecommerce. Emily Hickey, COO at Lolly Wolly Doodle, Selby Drummond, Accessories Editor at Vogue, Chantel Waterby of Chloe & Isabel, Liza Kindred of Third Wave Fashion, and Andrew Mitchell of Zig Capital were invited to share their insight.
The evening kicked off with the panel sharing some of the most exciting sites out in ecommerce today. Some of those included:
Wantful.com, mentioned by Liza Kindred, for its ability to get rid of a headache – I mean solve a common problem – which is how to find the perfect gift for someone.
The Beauty Counter (as well as Chloe & Isabel), mentioned by Selby Drummond, for its model which empowers customers to be the seller, thus simultaneously helping to grow real brand attachment.
Warby Parker, mentioned by Andrew Mitchell, for its ability to eliminate the middleman, thus providing affordable glasses to the masses.
Posh Mark, also mentioned by Liza Kindred, since its part of the many companies who are creating sites that allow users to sell their own content to each other.
The ecommerce market has certainly grown large enough to the point where Kindred even noted that she finds it saturated, save for exceptions such as those above. The panel thus tackled what they thought was driving the innovation in the market and what might have been holding it back.
According to Mitchell, it’s the “push and pull effect” in which traditionally, brands pushed out their ideas and consumers were forced to accept them. Entrepreneurs, however, find a niche and focus on making their business transparent, which is what customers want to see. Thus, more customers are rooting for those new brands to succeed.
Another source of innovation, said Chantel Waterby, is the increasing usage and importance of social and mobile networks. She noted that 74% of consumers look to social networks to guide their purchases, while 91% of people trust recommendations friends make online.
Emily Hickey agreed with the social aspect and remarked that 60% of her revenue is made through a Facebook newsfeed. Thus, if five people comment that they want an item, five are made and if 500 comment, 500 are made. At the same time, both she and Chantel said that the lack of innovation in the platforms that support these businesses are currently holding them back. While Emily said the startup cost is a lot lower, when trying to scale up and build your own technology to support the demand, you realize that you have to slow down your progress.
If indeed the ecommerce market is saturated, companies must further stand out with their sale strategy. One example of the innovative business models mentioned:
StitchCollective, mentioned by Kindred (whose company ‘lives and breathes fashion tech’). StitchCollective lets people vote on the design to be produced. Kindred is interested in social production since, as she sees it, “When people are involved in the brand earlier, they’re much more invested in it and much more likely to make a purchase.”
Another important factor of sales strategy for ecommerce is the mobile experience.
For Waterby’s company, her main focus is to ensure that her sellers can build an experience that can showcase each of their style in an accessible way.
Kindred and Drummond both stressed the idea of a mobile’s accessibility. A phone, said Kindred, can let you know which stores are nearby. Drummond gave the example of walking into a Prada store and finding that a shoe you want doesn’t come in your size. You should be able to easily look it up online and purchase it that way.
Mobile and online have created more opportunities for businesses to interact with customers. As Hickey noted, interacting with customers on Facebook has allowed them to build genuine relationships where people are comfortable enough to post pictures of their newly adopted kids in the company’s clothes. With online so popular then, is there a need to innovate offline?
“This is where the importance of having a ‘touch-point’ comes in,” Kindred. “What everyone knows is that people will always want to have that experience of physically trying something on.” Thus, the popularity of pop-up shops, or as Drummond noted, places like Story, a sort of popup evolution based in Chelsea, which holds month-long stores for online shops.
And back to those famous billion dollar companies mentioned in the beginning. Sure, they set the trend, but will their models still work in the future?
To Kindred, Amazon does commodity purchases well but not editorial, which is what many niche businesses focus on instead.
For Mitchell, achieving Amazon-like success is really what a company’s end game is.
For Hickey, their end game is to become the top kids brand in the country. At the same time, they never want to sell wholesale and don’t try to compete with Amazon’s shipping and pricing. Right now, they’re taking things one step at a time, with this question always in the foreground, “How do we serve our community?”
Which, in the online world, can be a pretty big neighborhood.