Are Startups Like Wanelo And OpenSky The New Commerce Data Brokers?

WaneloThere’s a new breed of social platform in town, with direct-to-consumer and merchant wherewithal.

The group includes social startups like Wanelo, a uniquely searchlike experience for “all stores in one place,” and OpenSky, which combines the microblogging feel of a Twitter with the slightly more visceral look of a Pinterest.

According to OpenSky CEO John Caplan, who spoke at the National Retail Federation’s Shop.org summit in Chicago yesterday, his company would be the end result if “eBay and Facebook had a baby.”

These new merchant-to-consumer models have the potential to disrupt traditional commerce distribution. “What we’ve worked on solving is, ‘How do you leverage your massive following to have a conversation with consumers and [gather] editorial content around a group of products?'” remarked Deena Varshavskaya, CEO of Wanelo.

Wanelo's 10 million-plus users have posted 8 million product pictures from more than 200,000 brands and stores through “stories.” Consumers can click to purchase from the brand directly and save items for later on their profile pages. This gives the platform a key strength along the lines of what Pinterest has begun to commercialize – intent.

OpenSky has more than 1 million members who discover, share and, ultimately, purchase directly through the platform, powered by the OpenSky merchant portal. According to Caplan, “the merchants and consumers are having a conversation with one another before the purchase even happens.”

Using Universal OpenSky checkout, a consumer can buy in-platform from the merchant. While “traditional ecommerce” has an average conversion rate of 3%, Canelo claims OpenSky has seen 10.5% conversions tied to the OpenSky product feed.

OpenSky can provide data about “which merchant and friends a consumer is following, what time of day they’re shopping, what products are going in their cart --information all the way through the funnel to the cart,” he said. Through a Merchant Dashboard, retail brands and merchants can pack and ship with one-click fulfillment orders through a single portal.

More and more retail brands are looking to build Uber-like experiences that facilitate an “advanced, contextual experience” between the merchant and consumer, according to Sucharita Mulpuru, VP and principal analyst at Forrester. The problem is, it’s expensive. “The price tag is typically no less than $5 million and often goes up to $50 million.”

Developing a service like eBay Now, for example, brings local product delivery (within an hour) to mobile apps users so they “can see, in real time, where both parties (merchant and buyer) are in the transaction,” Mulpuru said. The ultimate question is, how viable is it for brands to reinvent a sometimes decade-old supply and distribution network to facilitate the kind of social and mobile experience an OpenSky affords?

In the end, such as with Amazon, brands will have to decide if they even want to relinquish some of their transaction data to a third party in return for social clout.

 

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