Another day, another shopping app launches.
The latest one is called Strut, and like a number of shopping apps before it, it aims to solve the biggest e-commerce challenge for retailers: how to make buying things on mobile devices a seamless (and social!) experience. To tackle the mission, this week the company snagged $1.5 million in seed funding from Khosla Ventures.
CEO Mark Daniel, a Peter Thiel fellow, and Chief Technology Officer Nate Chiger founded Strut in 2013, but the app is still forthcoming. In an interview with Inc., Daniel declined to explain exactly how the app will work, but here's what I've gathered: Strut will be a personalized platform where users can save, share, and shop fashion items from photos. If you're thinking that Pinterest (and others) already offers such a platform, you wouldn't be mistaken.
"We're trying to build the world's best, sexiest, curated platform," the 20-year-old Daniel says, before adding that he thinks a lot about malls. "People do a lot of browsing and buy one thing, but that hasn't been brought online yet."
He says Strut will be as simple as making one click to buy. Daniel also reveals that the app will operate on an affiliate model, meaning when shoppers click to buy, they'll be bounced to a retailer's site, and if they follow-through with the purchase, Strut will get a commission. No word yet on how much that is, however, Forrester analyst Sucharita Mulpuru says it's probably not much to write home about.
To be frank, low commissions will be the least of Daniels' worries. Strut, like so many e-commerce startups, faces an uphill battle and some stiff competition to win the hearts and wallets of mobile shoppers.
Cracking the Code
The world of mobile e-commerce is teeming with consumer-facing utility apps such as Groupon, retailer apps, and pinboard-style "curated" destinations such as Fancy and Wanelo (short for Want, Need, Love)--the latter of which seems to have a firm grasp on what shoppers want based on the app's 11 million monthly users. But most startups have yet to crack the code on e-commerce.
The fact is, it's hard to launch a mobile e-commerce startup these days. "You have to get people to learn about the app first," Mulpuru says, then pay for customer acquisition and get people to download and use it. Then you have to make sure there are no bugs in the process and get people to keep using it. And of course, there's the issue of scale.
"Venture capitalists are now funding these startups with the expectation that they're going to be tiny," Mulpuru adds, underscoring the issue of growth. "It's one thing to build a successful, tiny company [like RetailMeNot]--but it's the big opportunities everyone's hoping for."
There's also the challenge of simply making the act of shopping itself less onerous on such a tiny screen.
On a phone, toggling between websites takes heruclean effort and few websites have the right setup--"they have all these different formats and signing up for an account is highly inconvenient and a psychological barrier," says Wanelo founder Deena Varshavskaya. "The question is, who's gone the farthest as far as solving those problems, and why haven't they been fully solved yet? The answer is, those problems are just incredibly hard."
Wanelo's strategy is to bill itself as a mall on your phone, with over 350,000 retailers ranging from low-end to high-end, and thousands of indie boutiques in between. Instead of selling a lifestyle, its pinboard-style platform hosts a bevy of mostly user-generated photos of roughly 14 million products, all of which can be purchased on retailers' sites.
"Every single product and retailer is presented in a simple format," says Varshavskay of the site, which launched in 2011. Brands such as Urban Outfitters, Lululemon, and Sephora have built rabid followings on Wanelo, to the point where they've installed Wanelo save buttons on their product pages, according to Women's Wear Daily.
But what makes Wanelo stand out in this crowded app space is Varshavskaya's vision for tackling the unsexy stuff. "The hard problem is, How do you know that the products you're looking at are available, in your size, and the color you want?" she says. "How do you know if the price has changed? That's where things really get hard."
To her mind, consumers want a "single experience that unites shopping for them in one place," where the content is standardized, payments aren't a hassle, and, yes, they can find what they want. "It's not just enough to have images of your product," she says, "you have to really be able to back it up." With the forthcoming release of a new system that will provide "near real-time data" on products, thanks to an integration with retailers that is currently underway, Varshavskaya is confident she can crack the code.
If the cracking part of that equation is still up in the air, the end goal is clear. Mobile shopping needs to be one part utility and one part fun. Shoppers want to be able to easily find a lot of products in one place, get accurate information about them, and be inspired by the fashion, Varshavskaya says.
In other words, they want the online equivalent of a mall.