Posted June 4, 2012 by Veronika Sonsev
inSparq sat down with Karen Griffith Gryga- CEO of FashInvest, Venture Capitalist, and Ecommerce industry expert to answer our questions about the wonderful world of online shopping.
Have a great idea for an online shopping store you think will rock the Ecommerce world? You’re one of many. Have a hard time pitching your brilliant idea to Venture Capitalists in order to get seed funding? Well, you’ve got a lot of company. Karen Giffith Gryga – CEO of FashInvest, Venture Capitalist, and Ecommerce industry expert knows this scenario all too well. She started FashInvest in late 2009 when she saw the disconnect between entrepreneurs in the Branded Goods, Fashion and Retail sectors (including Fashion Tech)and venture capitalist funding. Investors struggled to see potential in fashion business plans and preferred to invest heavily in technology-oriented startups. With online retail only representing 7 per cent in overall retail sales and projected to reach 9 per cent in 2016 (Forrester) there hasn’t been a better time to invest in Ecommerce.
Fashion entrepreneurship has been underserved and commonly misunderstood in the marketplace, Karen explained. She found herself consulting a lot of investors who admitted they didn’t know how they should evaluate a fashion company. She decided to start FashInvest with her partner and co-founder, David Freschman, to help investors connect with new companies and information about investments in the ecommerce industry. With a standalone conference, multiple events, and a blog serving as a continuous news source, FashInvest is truly in the center of where ‘fashion meets finance.’
When we asked Karen about what she thought the biggest trend for Ecommerce this year was she didn’t hesitate with her answer: Pinterest, of course. With a new $100 million round of funding from e-commerce platform Rakuten and a $1.5 billion evaluation, the social pinboard is now the third largest US social network. Although Pinterest satisfies the visual gratification of shopping, ecommerce sites need to tackle another almost impossible problem: the tactical experience of trying on a product before the purchase.
The Ecommerce Problem
Shopping in-store has always been a very visual and interactive experience where you can both see and test the quality of garment up close. When Ecommerce burst onto the scene it seemed the retail industry was taking a step back to the world of catalog shopping. Ecommerce technology will always be trying to replicate the level of interaction and engagement that an in-store experience provides. Never fear: the industry is making significant progress with the convergence of technology and fashion, Karen suggests. Take the partnership between Bonobos and Nordstrom for example. The retail giant was impressed with Bonobos’ email marketing campaigns, offering customized emails and links to quirky YouTube videos that appealed to their male clientele. Learning from Bonobos, Nordstrom was able to improve their personalization and targeting emails to their customers and increased engagement pretty significantly. “Traditional brands and retailers are seeing the importance of their online presence”, Karen says, “and the power that comes from interacting with their customers.”
Retailers are no longer using ‘fit’ as their proprietary problem, but are looking at other ways of interacting with their customers as their main concern. Brands are looking to personalize interactions with their customers using algorithms to recommend additional products and keeping them engaged. Examples like JewelMint, a site that requires you fill out a Cosmo-type style quiz before entering your ‘exclusive store’ comes to mind. Karen warns of the dangers of pin holing customers, “keep testing feedback cycles to make your algorithms sharp. Offer random suggestions as well so the algorithm can use positive reactions to enhance the consumer’s experience.”
The New Ecommerce Experience
We asked Karen what her top picks were for companies causing major disruption in the Ecommerce industry.
Fab.com – great for discovering quirky items you would have never come across otherwise.
Buyosphere – a question and answer shopping platform that allows you to discover and talk about great products. Scenario: you’re looking for a comfy pair of coral colored peep-toe heels and have searched extensively through your trusted Zappos store. Ask the question in Buyopshere and shopping experts will suggest items closely related to your inquiry.
Amazon.com – quite the opposite of discovery shopping, Amazon is the perfect online store to find pretty much anything. After launching Amazon Prime, the ecommerce giant positioned itself to the ultimate loyalty program that includes free two-day shipping, free streaming of online movies and TV shows, and one free Kindle book to borrow monthly.
Starting Your Online Shop
The Ecommerce industry is not showing any signs of slowing down. Online shoppers spent $202 billion in 2011, and projections are expected to spend $226 billion and $327 billion in 2012 and 2016 respectively. Thinking of reaping the benefits of starting your own online store? Karen has a couple tips:
1. Really understand who your target customer is. Its easy to go after a broad age range or price point but narrowing down specifics will help you focus on capturing your demographic with target messages and advertising. Once you win that group over, you can move on to expanding your customer reach.
2. Solve a specific industry problem. Sites like Quincy Apparel aim to improve fit of their garments with sizes that accurately reflect the range of a real women’s body shape. Sizes are defined by bust, hip to waist ratios and height to create a customized fit for every shopper. What’s the most targeted ecommerce business plan Karen has come across? An online store to target lesbian fashion. One entrepreneur saw the lack of fashion aimed at more masculine styles with a feminine fit that many lesbian women prefer, ex. Ellen Degeneres’ style.
Karen encourages fashion entrepreneurs to be as original as possible. Building a store online gives you the potential to reach any customer across the world, so take advantage of it. There’s a slew of customers with needs that aren’t being tended to, and with wants they didn’t even know they had. As technology and Ecommerce merge together, online shopping will adapt to customer’s needs drastically, becoming more effective than even in-store experiences. Better yet, with the headache that comes from in-store dressing room line-ups and failure to find anything left in your size, you may never have to make a trip to the mall again!
By: Melissa Fudor, Marketing Manager, inSparq