57.5% of all shoppers use the omnichannel service, but only 31.6% describe it as being a smooth process, according to a new report.
Retailing is growing more global and yet at the same time, more personal. The online merchants on this year’s Hot 100 are the ones innovating to be at the forefront of these changes.
The retail world is reshaping to be more all-encompassing and also more satisfying to the individual shopper. It’s a dichotomy. Consumers can find virtually any product they want online and have it in hand relatively quickly, shipped from a retailer down the street or across an ocean. And, at the same time, online merchants are crunching data to figure out what products an individual consumer will want or the type of shopping journey he wants to take so it can make shopping more personally satisfying for him, and in turn collect more money from him.
The merchants on the Hot 100 list for 2017 cover both fronts, and business variations in between. These e-retailers are all about finding innovative solutions to fill market gaps, and applying smart retailing and marketing strategies that will pull customers to them.
Take, for instance, Crown & Caliber LLC. Four years ago it was a wholesaler that bought used watches and sold them to other businesses and dealers for resale. Two years ago it decided it could be a different kind of middleman and sell the luxury-level watches directly to consumers on a consignment basis. Today, virtually all its business is B2C, with watch owners from all over the world shipping their Patek Phillipe’s and Rolex’s in for professional evaluation. Crown & Caliber and the watch owner settle on a price point and Crown & Caliber lists it for sale. The deep catalogue of hard-to-find merchandise raises the chance that a consumer will find just what they want, even if its first owner is on another continent.
Andrew Hughes, Crown & Caliber’s digital marketing director, says the most important requirement in the buying and selling of luxury watches is trust, and that’s why the marketplace works hard to convey to sellers and buyers that it is worth trusting. It collects site visitor and behavioral data and applies what it can glean from it into segmented email messages which by design, are less about sales and more about conveying information that shows Crown & Caliber is worthy of their trust. For instance, an email might point the recipient to the merchant’s regularly updated blog, videos, or to reviews it has received on Google or Yelp. See Crown & Caliber’s profile on page 17 to understand more about its success.
Another entrant on this year’s Hot 100 is AwayTravel.com. It is part of a rising group of entrepreneurial merchants that understand the traditional merchandising and supply chain models that have ruled retailing for decades have changed—and that they can upend established market practices by taking a different approach. Away aims to transform the luggage industry in much the same that others are transforming eyewear (Warby Parker), mattresses (Saatva, which appeared on the Hot 100 last year, and Casper, which is on this year’s list on page 17) and razors (see Dollar Shave Club, page 55, or Harrys.com, from last year’s Hot 100).
Away works directly with manufacturers to design and make four sizes of hard-sided suitcases. It then sells the suitcases—which are tricked out with modern conveniences like built-in battery chargers—direct to consumers online. The top three sources of traffic are from media coverage of the retailer’s products—such as a review appearing on TravelandLeisure.com—social media and word-of-mouth referrals from Away suitcase owners, says Stephanie Korey, co-founder and co-CEO. Korey credits some of Away’s early success—it shipped its first suitcase in February and is on track to close the year with more than $10 million in sales—on the direct connections it has with customers and manufacturers. For example, it started with one product, a carry-on suitcase. It was customers who urged Away to design a slightly larger carry-on that still accommodated most airline’s sizers. “With the feedback loop we are able to constantly iterate on our core evergreen product. We are trying to learn from our customers, and we don’t push trends. From a supply chain perspective, we can be lean and efficient,” Korey says. Find Away’s profile on page 14.
Another burgeoning segment blending opportunity and consumer preferences is meal kits, and several appear on this year’s Hot 100. Last year we covered Blue Apron Inc., which has used its first-mover advantage to become the market leader in the category. Internet Retailer estimates Blue Apron, supported by more than $190 million in funding, grew its sales 80% last year. A flock of other merchants have converged on the market. Some are “me too” alternatives, but the meal kit e-retailers on the Hot 100 each have their own positioning, intended to cater to different market segments—there’s now a kit that fits most any kind of personal preference. For instance, Purple Carrot (page 32) offers meal kits for vegans. Home Chef (page 24) offers family-sized kits for classic dishes, tapping into the market of time-strapped parents with picky eaters. Its business approach has garnered it $57 million in investor dollars. Green Chef Corp. (page 24) focuses on all-organic ingredients and gives consumers more options to customize by diet—gluten-free, paleo, etc. These e-retailers—and others in the meal kit area—are well-positioned to get some of consumers’ food dollars. Nearly one-third of U.S. consumers bought food online in the first six months of 2016, according to The Harris Poll, and online food sales in the United States are expected to grow 157% this year. It’s a very hot market, and merchants are giving consumers plenty of choices.