Online shopping – we all do it, but how many of us still visit brick and mortar shops as well? Probably most of us. But why is that?
There is a plethora of online businesses from the established giants like Amazon, ASOS, and Flipkart, to the rapidly growing top ecommerce startups that enable you to order and receive just about anything without ever having to leave your home.
Here are some of the 10 top ecommerce startups that are doing just that. By becoming a customer of theirs, you are in fact using the internet to start unshackling yourself from brick and mortar retailers.
Dollar Shave Club
Men, are you tired of having to browse through aisle after aisle of razors in your local pharmacy? Then here’s an ecommerce startup for you.
Due to its viral YouTube video a few years ago you may already know this one of the top ecommerce startups leading innovation in online shopping. Founded in July 2011 by Michael Dubin and Mark Levine, Dollar Shave Club delivers razors and other personal grooming products for extremely low prices by mail to individuals who subscribe via the startup’s website.
Valued at more than $600 million today, the company has recently secured $75 million in investment in a funding round led by Technology Crossover Ventures, raising the total raised to $149 million since its inception.
Now successful online retail startup, it took approximately a year for the business to be recognized as a viable option among consumers. In March 2012, Dollar Shave Club published its viral YouTube video entitled “Our Blades are F***ing Great” and within 48 hours they had 12,000 orders to fill.
While many top ecommerce startups struggle to be recognized beyond a very niche subset of the population, Dollar Shave Club succeed by using clever humor. Is there a lesson to be learned there for other ecommerce businesses? Check out their other videos for some inspiration.
Not to be outdone, women, there are top ecommerce startups for you too. HelloFlo is probably among the most popular. Founded in 2012 by Naama Bloom, this startup is focused on helping women through their first periods with a care package sent directly to each young woman’s home.
In similar fashion as Dollar Shave Club, HelloFlo’s success can be attributed in large part to the startup’s clever use of YouTube videos for marketing purposes. After its first hit video entitled “The Camp Gyno” got a few million views the startup published a more successful video called “First Moon Party”.
What’s one thing that men and women alike agree is hard to shop for entirely online? Clothes. Or so it was… Meet Trunk Club, the Chicago-based startup that spares men from having to ever visit a store again.
Founded in 2009 by John Tucker and Kevin Price, it’s top ecommerce startups like Trunk Club that are sparing men from having to ever visit a clothing store again. After registering, men are asked to submit their personal tastes and measurements. Subsequently, they are sent a trunk of clothes, of which they only pay for what they don’t return in the mail within 10 days.
Having received more than $12 million in funding the business was acquired by Nordstrom in 2014 for a reported fee of approximately $350 million.
One of the challenges of buying clothing online has always been the inconvenience of being unable to properly try it on prior to purchasing it. While most traditional clothing companies have only adopted digital in so far as to enable their customers to purchase the same online as in their stores, Trunk Club has taken it a step further by building the business around the notion that individuals want the opportunity to try the clothes before paying for them.
Shoes of Prey
“Live your life in the shoes you love” – there’s something that much easier said than done.
Yet, one of the top ecommerce startups, Shoes of Prey, claims to deliver exactly that. Founded by Jodie Fox, Mike Knapp, and Michael Fox in Australia in 2009, the business so far has raised nearly $9 million after a $5.5 Series A round led by Khosla Ventures in December 2014.
If you are the typical individual, finding the right shoe is frustratingly difficult. Shoes of Prey aims to solve that problem by allowing women to design their shoes on their platform, order them, and have them delivered straight to their home within 4 weeks.
Alright, so we’ve determined that we can have shoes, shavers, clothes, and tampons delivered straight to our home. What else can these top ecommerce startups that are leading online shopping innovation deliver?
Warby Parker, also known as “the Netflix of eyewear”, was founded in 2010 by Neil Blumenthal, Andrew Hunt, David Gilboa, and Jeffrey Raider. Valued at $1.2 billion, Warby Parker has already become one of the leaders among the truly made on the internet brands. Similar to Trunk Club, the business is built around the notion that individuals may want the experience of trying their glasses on prior to purchasing them without having to travel to a store.
Taking it a step further, Warby Parker finds itself among an exclusive breed of the top ecommerce startups that donate some of their products to people in need. in this case, for every pair of glasses purchased, the startup donates a pair to someone who cannot afford it.
What about beauty products though? One can definitely argue that there is value in visiting brick and mortar locations to trial various beauty products prior to purchasing the one you feel works best for you.
What’s the secret behind this startup’s success? Well, there are many, but one is undoubtedly the fact that the company will send a monthly package of samples directly to someone’s home for a mere $10/month subscription. This in turn drives up the sales of the products.
So far Birchbox has more than 800,000 subscribers and is working with more than 800 different brands.
Birchbox finds itself in a unique position among the top ecommerce startups that are leading online shopping innovation as it helped launched a new wave of young businesses calling themselves the “Birchbox for X”.
Meet the “Costco of mobile apps” as Fortune described the New Jersey-based startup Boxed. Founded in 2013 by Jared Yaman, Christopher Cheung, William Fong, and Chieh Huang, it tanks among the top ecommerce startups because it’s transforming the way individuals can buy items at wholesale prices as it’s able to charge even less than famous wholesalers like Costco and Sam’s Club.
So far, the ecommerce startup has raised more than $30 million in less than 3 years as it rapidly grows to serve customers across the United States. Individuals have traditionally had a very compelling reason to visit a wholesaler for good prices, but if they can just do it online, what does that mean for the traditional businesses like Costco?
If there ever was an example of how top ecommerce startups could not only make it easier, but also make it more affordable for consumers to purchase something it’s this one.
Made.com is reinventing how furniture is bought. By having no brick and mortar locations (no stores, but also no warehouses) and manufacturing their products merely based on orders customers place, they have been able to reduce the costs for the furniture they sell from top designers by up to 70%!
Founded in 2010 in the United Kingdom by Ning Li, Brent Hoberman, Julien Callede, and Chloe Macintosh, the business has grown to already serve an additional 6 countries across Europe and has just raised $60 million from investors in July.
By now it’s probably clear that you can purchase just about anything online and in many cases also have a great buying experience, all without having to ever visit a brick and mortar location. But wait, some of you will point out that all the top ecommerce startups we’ve listed here deal with non-perishable items or with food that’s delivered to be consumed immediately, so what about fresh food for you to prepare on your own?
This business stands out among the top ecommerce startups because its sole purpose is to deliver fresh food (vegetables, fruit, meat, etc.) straight to your home. Who said you still needed a supermarket?
And if that isn’t compelling enough, the startup also sends its customers precise recipes based off of the ingredients it sends them in order to make it as easy as possible for them to prepare their meal. So far the company is selling approximately 3 million meals per month.
One to watch: Operator
You’ve probably not yet heard of Operator, the brainchild of Robin Chan and Uber co-Founder Garrett Camp, because it’s still in beta. But this is definitely one to keep an eye on, because there is little doubt it has a bright future as one of the top ecommerce startups.
Operator uses the internet to combine the power of messaging, with Uber drivers and a network of individuals with a particular expertise or an affiliation with various products (known as Operators) to enable you to place an order for something all via text message and receive it straight to your home or office through Uber.
Despite still being in beta, the business has already raised $10 million from top investors like Greylock Partners.
One of the key differentiators for Operator is that by connecting consumers to these Operators, someone can ask questions about the products they are interested, which is arguably more helpful than merely reading online reviews, all the while without ever having to step foot into a store. Keep your eye on this one, it’s only a matter of time before it ranks among the top ecommerce startups leading innovation in online shopping!
It’s clear that ecommerce sales as a percentage of total retail sales is rapidly increasing. A recent report by the US Department of Commerce published in May 2015 highlighted how the share of retail sales that’s being done online has more than doubled as a percentage of the total in the last 9 years in the United States.
Despite that impressive growth though, it’s worth noting that as recently as the first quarter of 2015 (January – March), only approximately 7% of the total retail sales was done online.
But if each of these types of businesses can prove to be successful, what’s the limit for these top ecommerce startups? Will we ever reach a point when you don’t ever need to go into a shop anymore? The answer is probably that it’s still far too early to tell.
And the reason is the experience. Whether an individual typically enjoys shopping or not, there is something to be said about the experience one has from purchasing a product from a brick and mortar store.
No matter what type of store you walk into, each major retail company will have carefully designed their shop in such a way that you have a pleasurable experience in order to make you want to buy more in that visit, and, ideally, make you want to return.
The experience represents more than just the typical tricks like the one of grocery stores placing commonly purchased items near the back in order to make you walk through the entire store to find what you’re looking for (and as a consequence pick up additional items you hadn’t necessarily planned on purchasing).
A very big component of an excellent in-store purchasing experience is to play with people’s 5 senses: touch, sight, hearing, taste, and smell. Having just the right balance of each of those has been proven to increase sales substantially. The reason is that it helps the prospective customer either feel attached to the product in some way or in the most profitable situations, makes them start to imagine themselves with the product. At that point, the odds of the sale being completed become relatively good.
Two companies that have done this particularly well are Apple and Whole Foods. The former’s famous retail stores have been designed in such a way that you can touch each of the products and not only that, but you can also play songs from them, which simultaneously taps into another of the 5 senses, hearing. In Whole Foods, you can taste many of their products and their products are organized in such a way that you experience distinct smells as you walk through the shop, each carefully selected to make you want to add a few additional things into your shopping basket.
Taking it a step further, some companies have now started to blur the lines between what has traditionally been distinctly separate, the physical and the digital in order to further enrich your offline shopping experience. Burberry is arguably the best example of that. The company has broadened what any one individual can sense through the 5 sense by bringing in the power of digital technology.
So the key questions are:
- How can the top ecommerce startups match the unique shopping experiences that the best brick and mortar retailers are now offering?
- Or will convenience eventually outweigh the pleasures individuals feel from these experiences as online ecommerce sales continue rapidly increasing?
It may be too early to give any of these questions a proper answer, but they are nonetheless worth thinking about as not only the growth of the existing top ecommerce startups accelerates, but also the range and variety of the products one can purchase online increases.