Convenience has been the backbone of e-commerce and the pandemic only served as a reinforcement of this tenet. However, consumers in need of products quickly may start their journey online but ultimately walk into a store to complete their purchase, resulting in cart abandonment. Developing solutions and addressing omnichannel consumer preference is the future of e-commerce and brands, especially for smaller direct-to-consumers brands. Lucky is a retail inventory fulfillment solution for direct-to-consumer brands to enable them with the capabilities to provide customers with in-store pickup and local delivery options for online orders. The platform connects directly with Shopify and integrates with a store’s inventory system via an API to provide real-time availability information to consumers. Brands are able to offer same-day fulfillment to consumers while stores benefit from the traffic from added in-store visits. According to the company’s data, 20% of online orders were picked up in-store last year. Lucky provides the infrastructure to make this functionality possible for direct-to-consumers brands seamlessly without custom and prolonged development.
AlleyWatch caught up with Lucky cofounders Sneh Parmar and Nafis Azad to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $3.3M, and much, much more…
Who were your investors and how much did you raise?
Seed Round of $3M. Our investors included Unusual Ventures (Lead), Plug and Play Tech Ventures, Sara Du of Alloy Automation, Kyle Wong of Pixlee TurnTo, Gregg of Evolution Venture Partners, Kyle Schroeder of Cremo, and more!
Tell us about the product or service that Lucky offers.
Lucky enables DTC brands to directly offer in-store pick-up and local delivery from any nearby retailer. We connect brands to their inventory at retailers.
Our goal is to use data to bridge the gap between brands and retailers, providing fulfillment solutions and data-driven insights into real-time inventory distribution, discovery, and how to merchandise brands in-store.
Sneh was buying charcoal toothpaste online from a brand I love and consistently was left waiting a week to receive the package. When talking to a friend about the product, I was told he liked the brand too and always purchased it from his local Target.
That’s when he had a lightbulb moment and thought: Why am I buying online and paying for shipping when I can walk two blocks to Target?”
We really dug in and began trying to understand the relationship between retailers and brands. We realized post-distribution, that these forces would compete for the customer rather than work together to truly benefit them.
How is Lucky different?
Instead of requiring brands to add logistics and operations to their supply chain to offer instant fulfillment, Lucky enables brands to use their existing distribution across any retailer for fulfillment for any online customer.
From there, our plans lie in disrupting the traditional distribution process by using our unique set of data to help brands and retailers truly work together.
What market does Lucky target and how big is it?
Lucky is currently working with the largest retailers that including Nordstrom, Sephora, etc., so we can work with any brand that sells in these stores. The market opportunity for omnichannel fulfillment and data aggregation is valued at ~$300B and growing exponentially as consumers want products faster and brands and retailers want to be more sustainable and improve efficiency.
What’s your business model?
We charge a take-rate on every transaction that occurs where a consumer buys the products from the brand and fulfills from the closest retailer near them.
What are your post-COVID office plans?
We are a remote-first company and really believe this flexibility is key for attracting the smartest and most motivated people. That being said, we have existing and future plans for office space in NYC and Miami for employees that want to use it. We believe the energy and serendipity that occurs when you are in proximity to coworkers is invaluable. We fly employees to in-person meetups in NYC or Miami to co-work every quarter.
What was the funding process like?
Anyone that says it was easy would be lying! We really found our strides after closing a few major retailers and great brand clients, and our investors really like our traction over the last year. Finding that signal towards product-market fit helped a ton! These things made the process much easier, and after we had those traction points, we were able to really focus on fundraising and close the majority of the round within a few weeks. Those few weeks of successful fundraising, however, were preceded by months and months of connecting with people in our space that helped us refine our product and meet those that would eventually become our investors. This process of digging into our industry was really key for our early-stage success.
What are the biggest challenges that you faced while raising capital?
Focusing on fundraising and building the company at the same time. The best founders realize you must keep both in mind while fundraising and having a great team to support you while fundraising is key.
What factors about your business led your investors to write the check?
Our vision and traction played a key role in raising. Our platform is the first that enables both the brand and retailer to collaborate and win together. Leveraging the strengths of both sides in order to create the best experience for the consumer was important to us, and after we proved our model by getting partnerships with the largest retailers and brands, many investors were excited to join our mission. We also spent a lot of time deeply thinking about what we wanted to do in 3-5 years to really disrupt our industry with the path we are taking, and I recommend companies spend the time to authentically think about and have a vision for this. If you don’t have that answer, you should re-assess the long-term problems you are solving and if you have a vision for creating that solution.
What are the milestones you plan to achieve in the next six months?
We plan to double the number of major retailer partnerships, and substantially increase the number of brands we are working with. We are hiring across sales and product and launching multiple new products within our ecosystem in the coming months.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Stay persistent. The number one reason companies fail is because the founders quit – often times too early to give the company a chance to learn and pivot properly. If you continue building and listening to your customers, you will find a way. Most successful founders have gone through the stress of running out of capital or having no capital to work with until they hit an inflection point that changes their direction.
Where do you see the company going now over the near term?
Short term, we will continue adding retailers and brands to our network. This will build the foundation for us to start having a strong data set to learn from. Long term, we will use all the data we are collecting to build an omnichannel data platform that brands and retailers can use to optimize inventory management, merchandising, enabling same-day fulfillment at scale, and more.
What’s your favorite outdoor dining restaurant in NYC?
Duckedup (inside Ludlow House) has one of the best ambiances in NYC.