From the shiny new Little Caesars Arena to the fast growing startup scene - Detroit is exploding with innovation, economic, and retail growth. And as Detroit grows so does its entrepreneurial spirit. The city's grit, passion, and energy is what inspired a native Detroit entrepreneur to leave the bright lights of NYC to start a company in his hometown. Andrew Landau is the Founder of Jewel, a luxury ecommerce site that provides customers cash-back for shopping online from their favorite luxury stores.
Jewel: Why, What, and How?
Landau thought of the idea for Jewel by recognizing a trend that luxury retail is one of the most under represented online markets. Landau also has the industry experience - he's a former Googler, early team member of Jet.com, and founder of VC-backed Chalkfly. And according to research from Walker Sands, online sales are expected to be an $80B market and capture over 40% of the luxury sales by 2020. So far, sounds like a 'diamond in the rough' kind of niche.
Jewel is designed so that both brands & consumers benefit through sales. Customers shop the luxury brands they like and get cash back for every purchase they make. For retailers, it's a win-win, Jewel helps brands attract new online shoppers without degrading their brand in the process. Jewel does receive a commission for referring sales and they give part of that commission back to customers as cash back without any additional markups. They also partner with charities, allocating a portion of every sale (and don't have membership fees, either).
By focusing on the top end of the retail market, Jewel caters to brands that typically are not targeting "discount" customers, but that still want to build their online customer base.
"Just because a customer spends a lot of money doesn't mean they don't want value," Landau says.
Additionally, Landau and his team are creating easy-to-use technology to build the brand, rather than building warehouses that normally would be a huge capital expense. In less than 30 days, Jewel has partnered with over 100 luxury brands including many of the top online luxury retailers.
A missing piece of the online retail puzzle
Online retail has jumped dramatically over the past decade, and the healthy growth is ongoing. The National Retail Federation estimates that online and non-store sales will grow 8 to 12% in 2017, nearly triple the growth estimate for the entire retail industry. Millennials, who are the new face of the luxury consumer, expect luxury companies to be part of this online trend and cater to the technological, hectic lifestyle.
But luxury websites are sorely underrepresented online. That's largely because customers who want luxury products also want other perks, too, such as exclusive access, insider knowledge and service that's more customized and intimate. Security in shipping is another issue. Luxury brands that want to work online have to be careful how they migrate to or operate in digital so as to maintain the elite experience the customers want while still delivering on typical online convenience.
Where Landau recognized the unmet demand for online luxury options, he's not alone in trying to improve balance within the market -- and investors are taking note. For example, Farfetch recently grabbed a $397M investment from JD.com, and Felix Capital recently raised $150M for their creative fund. And according to McKinsey & Company, online sales of luxury goods will triple over the next decade. Seems ripe for the picking.
Building a company, restoring a city
While Jewel has its own set of markers that make it distinct for shoppers, it has additional value in the way it's set up, demonstrating some hidden beauties of online business. It proves that a luxury-based company (or, in fact, any general business) doesn't have to base itself in a region known for affluence to be successful. Jewel shoppers can come from anywhere, but as the company's team grows and partnerships develop, the potential for additional jobs within Detroit grows, as well. And where jobs are, there, too, is greater economic stability. That ultimately brings hope and will continue to fuel the entrepreneurial fire.
Landau notes that by bringing together the best of Detroit's talent, passion, purpose and a focus on tackling a huge market, anything is possible. "We can't wait to see where the journey takes us."