PriceGrabber, the price comparison site, just snapped up Snapette, a shopping app focused on brick-and-mortar stores. Here's why.
Today, the founders of Snapette, the location-based fashion shopping app founded in 2011, announced it has been acquired by PriceGrabber, the price comparison site based in Los Angeles.
Sarah Paiji, the app's co-founder, says the nine-person company will continue to operate out of its New York office. Though the terms of the acquisition were not revealed, the deal likely represents a decent payday for the company's founders and investors, which include Accel Partners, 500 Startups, Forerunner Ventures, and Brian Lee of Shoedazzle. The company had been largely bootstrapped, aside from a $1.5 million in a seed round in October 2011.
For the uninitiated, Snapette is like a local, virtual mall--it lets users browse and discover products in nearby brick-and-mortar shops. It's been described as "Foodspotting for fashion," and that's a fairly good analogy. Users open up the app and can toggle through a seemingly endless catalogue of shoes, shirts, dresses, bags, and jewelry. (Ninety percent of Snapette's users are female.)
The app also allows users to search for specific products or items, and then shows them exactly where to find said items. In that sense, it's similar to Milo.com, the local shopping site purchased by eBay in 2010.
The app has cultivated a loyal following--Paiji says it now has 1.5 million users, and has partnered with over 200 brands to supply images and content.
It's not altogether surprising e-commerce companies like PriceGrabber are becoming more interested in local disovery apps like Snapette. It's a matter of usage and buying patterns--people are spending more time on mobile, but continue to shop locally. Despite the rise of e-commerce over the last 15 years, it still remains a relatively small segment of the overall retail market. According to the most recent data from the Department of Commerce, e-commerce sales still only account for about six percent of all retail sales.
"Ultimately what's bringing it all together is mobile," says Paiji, who dropped out of Harvard Business School to start Snapette. "Even if we made local information available on Web, people aren't walking around with their laptops."
And that's exactly the point. Despite the the fact that e-commerce provides a quick, efficient, and potentially cost-saving shopping experience, the reality is that most people still want to purchase items in the flesh. It's the same reason Warby Parker, the trendy Web glasses retailer, just signed a 10-year lease in its first brick-and-mortar location. ("We believe the future of retail is at the intersection of e-commerce and bricks-and-mortar," the site's co-founder toldInc. "People think it's crazy that we went and signed a 10-year lease in SoHo, next to Ralph Lauren, across the street from the Apple Store.")
But, like Paiji says, most people don't walk around with their laptops--so mobile is the obvious answer.
"The addition of Snapette reinforces our commitment to investing in mobile e-commerce and expands the PriceGrabber platform to more effectively reach fashion shoppers," Goldstein said in a statement. "In the last year we have seen accelerating growth in mobile and our acquisition of Snapette further extends the capabilities that we can deliver to our consumer audience and our merchant and publisher partners. Mobile commerce, including innovation around location-based offers, is central to our future."