Etsy Wholesale: The Growing Trend of Bringing Online Offline

August 5, 2014Leave a comment

As recorded in yesterday’s weekly industry round up, Etsy officially launched its wholesale business. Coming out of beta, the program enables small boutiques to purchase Etsy products to sell in their brick-and-mortar businesses.

According to Etsy’s official announcement post, if accepted into the program the makers (called “sellers”) pay a $100 fee at start followed by a 3.5% transaction fee paid to Etsy for all future purchase orders. For makers having trouble getting in front of the right independent shops, this is an amazing opportunity. Etsy will essentially do all of the heavy lifting of marketing, PR, and tech systems that facilitate the order. Similarly, small boutiques and shops can now easily find curated marketplace selections without having to attend trade shows or tirelessly search for that one gem that will delight customers.

My take: First, the one thing the program doesn’t address (yet) is the big brand partnerships such as West Elm and Nordstrom. I’ve even seen Etsy products show up at Anthropologie stores. I assume some iteration of this will become part of the program’s roadmap, if not its own program entirely.

Second, Etsy is joining the ranks of other successful online pureplays that are providing an offline experience (Birchbox, NastyGal, Warby Parker) as a complement to their core business. It speaks loudly to the current customer demand for tangible, IRL (in real life) experiences that engage more than just the sense of vision. Online can (currently) only go so far and while pureplays have cried “old school” in the face of traditional retail, they are now returning to the basics of what it means to provide customers with more than just a transaction. This doesn’t mean throwing innovation in the garbage, it is just the same thing retailers had to do when customers went online: adapt or die.

Etsy is right to adapt.

Some coverage from around the web:

Etsy Launches ‘Etsy Wholesale,’ a Platform for Retailers (VentureBeat)

Etsy Wholesale Launches Out of Beta (Etsy Blog)

Etsy Wants to Get More Sellers’ Goods in Brick-and-Mortar Stores (Fashionista)

@WalMartLabs Acquires Luvocracy

July 29, 2014July 30, 2014Leave a comment

…or acqui-hires Luvocracy. According to TechCrunch, @WalmartLabs acquired a solid roster of talented peeps with pedigrees including Yahoo, Blurb, and eBay. They reportedly plan to use this talent to improve their own site’s product discovery, building off of Luvocracy’s past as a sort of cross between social recommendations, wish lists, and Pinterest. Sort of like Wanelo or Svpply.

Walmart has been on the prowl lately, with this acquisition marking the R&D arm’s14th startup purchase. Recently, they’ve been clearly focused on ecommerce and mobile innovation. Still fresh is the June acquisition of fashion commerce and discovery app Stylr.

I don’t hate it as a strategy. In fact, there was just a Mobile Marketer article published on this topic exactly. Big brands are putting their financial resources to good use by acquiring top talent who have innovative ideas and technical skills. It has become increasingly apparent that the expertise needed is in mobile and social, two areas where perhaps traditional retailers are struggling to keep up. The traditional retailers may not have the culture, perks, location, or thought leadership to attract top talent in these areas but are able to adapt in the shorter term via acquisitions.

It will be interesting to see how smaller brands or brands with fewer resources work around and compete with the likes of WalmartLabs and Nordstrom, which I wrote about recently.

One thing is for sure: mobile and social aren’t going anywhere. I think this was a solid acquisition.

Here is some coverage so far:

WalmartLabs Acquires Kleiner Perkins-backed Luvocracy, a Pinterest-like Marketplace for Product Recommendations (TechCrunch)

Walmart Buys Shopping App Luvocracy (InvestorPlace)

Wal-Mart buys another tech start-up, Luvocracy – only to shut it down (WSJ MarketWatch)

Wal-Mart on the Prowl to Boost Web Expertise (Women’s Wear Daily)

Rent The Runway Launches Subscription Service

July 21, 2014July 21, 2014Leave a comment

Rent the Runway made big news last week with the beta launch of a new subscription service for accessories. With Rent the Runway Unlimited, customers pay $75 per month to rent everything from handbags, to sunglasses, to jewelry. The customer gets up to three accessories at a time and can keep them as long as they want, until they are ready to trade in for the other items on their list.

The new section of the website currently features a metallic silver Barbara Bui leather jacket that retails for over $2,300, a nearly $600 Elizabeth and James bag, and $675 Balenciaga sunglasses.

Co-founder and CEO of Rent the Runway, Jennifer Hyman, told WWD that they are aiming to “attack” Zara and H&M, which appeal to the mass market with what she calls fast fashion disposable “junk food.” With Unlimited, customers can enjoy the thrill and high of wearing of on-trend luxury products without breaking the bank. A nice proposition for those weary of spending big bucks on a trend that may not last through next season.

My take: Rent the Runway has been doing a great job of distorting their category. Temporary ownership of luxury goods is not a ground-breaking idea but they’ve been able to successfully increase share of wallet from millions of women. They’ve gone the same way as other successful tech start-ups such as Bonobos, BirchBox and Warby Parker by opening brick and mortar retail stores and now, they seek to capitalize on the subscription business model. Next up, they are planning a brand face-lift that will include more editorial content (Net-a-porter anyone?) and a further push to sell their products permanently via a Try to Buy program. Though they haven’t said so, I imagine international is on their road map as well as a more digitally innovative in-store experience.

Way to use your VC funding well, ladies.