Reuters is spreading the rumour that Dress-for-less is for sale:
“Buyout firm Palamon Capital Partners is selling online fashion retailer Dress for Less as it looks to return money to investors ahead of a fundraising later this year, people familiar with the situation said.
The European mid-market firm has received approaches for the business, based in Germany, which it bought for an undisclosed sum at the end of 2007, the sources said. One said the business could fetch about 400 million euros ($488.2 million).”
Dress-for-less owns a series of online shops and for a few months now, also the Kolibrishop.
Fred Destin, who recently raised a stir at the Mini Seedcamp Berlin with his presentation (“Hacking Venture Capital”), reports in detail in his blog about the 5th annual Founders Forum, the meeting for Europe’s top professional business founders.
"E-commerce penetration is currently around 5%, expected to get to north 15% - 30 to 40% for the most bullish of the group.
Serious concerns arise related to the over-reliance on amazon, apple, ebay. Google felt to potentially be the big loser here -- high proportion of revenues from shopping search are likely to go away.
Google do not capture shopping data on apps, private sales, apple network. The Plink / Google team (who showcased their amazing visual recognition tech) may disagree."
The British Wired Magazine also reported on the event:
"Organised by Jonnie Goodwin, Marc Samwer and Brent Hoberman, the forum -- now in its fifth year -- is remarkable for the high level of talent it attracts.
Entrepreneurs flew in from the US, China and Japan for the event -- but it was its significant representation of local heroes that was the real eye-opener.
After spending eight hours at the Four Seasons Hotel in Hampshire, I came away pretty optimistic that the culture is changing.
That California "fast company" spirit is finally becoming embedded in Britain, albeit in a small but growing way."
Techcrunch reported on “shady” methods being used for the Groupon expansion in South America, primarily being driven from the Samwer brothers’ Citydeal team from Berlin ("Loaded with Fake Deals").
"We’ve received three separate reports that ClubeUrbano, Groupon’s Brazilian site that it acquired earlier this month, is loaded with fake deals and venues that don’t even exist. As one source put it: “Fake names, stock photos, fake addresses, everything.”
"Groupon President Rob Solomon explains that Groupon’s standard practice when it expands to a new market is to show users examples of the kind of deals they could get once the site goes live in their city.
All of the fake deals on ClubeUrbano, he says, are meant to serve this purpose, but he concedes that Groupon has “done a terrible job of calling that out on the website”. Soloman says this will be fixed immediately."
Groupon founder Andrew Mason is anyways embarrassed about the incident and has distanced himself from the marketing tactics in the Techcrunch blog comments:
"I just want to apologize... we honestly didn't know this was happening, but that's not really a good excuse. We deserve to be called out - Michael's right, it's totally shady.
One clarification to Rob's comments above - this is in no way standard practice for us. For smaller cities in Europe, we run national deals until we have enough deals to run a local deal a day. I don't yet know if something got lost in translation between Europe and Brazil, but this is definitely not how we operate.
Anyway, I'm completely embarrassed (by the practice, not the bad press) - sorry to all, and hopefully our actions over the coming months will earn the trust and respect of the people of Brazil."
In the TC comments, some interesting elements of Citydeal’s expansion in Europe are pointed out.
Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
The first two posts on our VC series focussed on Europe’s blossoming startup scene and on Lars Hinrichs’ notable Hackfwd program. With Hackfwd, Lars Hinrichs demonstrates himself to be a genuine risk capital financier, using a new and contemporary approach which provides fresh inspiration to old and overused VC dogma.
The paradox of venture capital The paradox of venture capital is that when a VC starts acting with aversion to risk, the overall risk for the investors could actually increase. Overly conservative VCs cannot nearly achieve the exorbitant rates of return which are expected from their investors (see Risk and Return).
Investors who have understood the VC business would readily avoid funds from VC firms with a strategy focussed on copycat business models. There are numerous other classical investment methods associated with strongly growing established companies which would realize similar gains - with far less risk.
For a while now in the US there is a debate on if and why the VC industry is “broken”, and if the VC model has outlived its usefulness. The cause of this failure is highly disputed. But all are agreed that the VC industry does not deliver on expectations.
This is of course only conditionally true in this absolute form. Because there are a few VCs who have been delivering on their promises for decades now, and exactly these are the ones most sought after.
Industry experts thus clearly divide between the “real” VCs who are following a serious investment strategy, and the several “wannabe” VCs who try to go for the “sure thing” and at the most get by as a good asset manager.
A successful VC can afford up to 8 write offs The business of a real VC might seem dubious to many. However it is relatively simple: From 10 investments a successful VC can afford up to 8 complete write-offs, as long as one or two investments are absolute hits.
The art of a VC is not, according to the typical conservative investor, to minimize risk and to achieve good but manageable returns, but rather to keep risks as manageably high as possible with the goal of maximum returns.
The requisite one or two successes can only be demonstrated when VCs take on 10 promising (=risky) businesses into their portfolios.
As soon as the VC knowingly begins to put money into low risk (=weak return) investments, the probability of success sink towards zero.
A knack for innovation is a prerequisite for a VC It is not the wish to have every absurd idea funded that the editors of Exciting Commerce repeatedly lament on the lack of enthusiasm for innovation in Germany. Rather, it is the wish for an awareness for innovation that every VC should have as a pre-requisite in order to be able to reach the required minimum returns.
As described in earlier posts, this requires the right people who can not only recognize and judge the risks but rather also the potential of a business concept.
What is notable about the Hackfwd program as well as the other new VC programs which are causing a stir, is that they factor full risk into their selection of ideas and also complement their programs with a highly professional growth environment. It is a very exciting and must-follow new development which is feeding optimism for the future.
What is coming after the current conventional shop systems? Google is following a very interesting e-commerce strategy which at the current time concentrates more on individual shopping components (search, checkout, product database, etc.) rather than on an integrated shopping solution.
In focus besides the Merchant Center (formerly Google Base) is now the search: with Google Commerce Search, merchants can run customized shop searches.
Google has introduced in version 2.0 a few new features which will allow merchants to add tailor made search driven navigation independent of the already implemented shop system.
"Today we’re introducing a full merchandising dashboard, which gives merchants more control over promotions, ranking rules and filtering.
Marketers and product merchandisers can now do all of this themselves—no custom code necessary.
New intuitive retailer controls like time-based promotions, navigation bar with filters, and simple product ranking rules mean seasonal optimizations can be done on the fly."
Innumerable exceptional cases can now be implemented above and beyond the standard Google search. The adaptations seem to have been based on demands from existing users of the Google Commerce service, who wanted more manual control over the automated search settings. VentureBeat gives examples:
"Now retailers can decide what options users get alongside their search (for example, a furniture site can adjust the settings so that users can narrow their search results by product type, brand, or price), can set very specific rules for which products rank higher during search (so that a certain brand and price range is prioritized for laptop searches, while another brand and price is prioritized for office chairs), and also create limited-time promotions. "
Above the search itself, Google has upgraded the navigation features:
"Many shoppers depend on the search bar on retail sites when they’re looking to make a purchase, but some people will always prefer to navigate through different categories and discover new products.
Now, Google Commerce Search allows visitors to shop by browsing around your site as well as searching directly for products."
The search navigation thus gradually encompasses the navigation structure of current shop systems and as a result they are pushed further and further into the background.
Google seems to be slowly growing a form of parallel shop system which is coming through the back door.
The Google Commerce Search results/structure is logically also integrated into the Google-wide product search. The product data of the shops are transmitted to Google which stores the data for Google Product Search as well as then indexing the shops using the search technology.
That Google is refining its e-commerce strategy is obvious, but the big question is, in which direction? Google is being steered by longtime eBay manager Stephanie Tilenius, who has recently been given responsibility over Google’s e-commerce activities.
Currently Google Commerce Search, Google Checkout and others are only available in the USA and England.
Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.
Where this report succeeds and is far too seldom elsewhere seen, is that the analysis is free from current industry hypes (eg. mobile commerce, location based services, augmented reality, etc.). The effort is made to dig beneath the surface level and decipher the basis trends and underlying structural changes:
For example, many in the industry are still considering the topic “mobility” as an end on its own, rather than just as a means to an end. The PSFK report therefore speaks about “connected technologies”. How and where can shopping worlds and shoppers themselves be better networked?
Here is an overview of the most exciting trends from the industry report:
Next week there will be a related presentation in London - with Polyvore, Starbucks and others.
Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.
The latest edition of the Internet Retailer Top 500 Guide is now available, which lists out the strongest US online merchants according to revenue. For the first time, the complete list is available online:
"The Internet remains the retailing industry's only growth area. Last year total e-commerce sales increased 2% to $134.9 billion from $132.3 billion in 2008 while total retail sales declined year over year by nearly 3% to $2.07 trillion from $2.13 trillion, the U.S. Department of Commerce reports."
The central findings from this year’s ranking are as follows:
The Top 500 retailers' sales grew 8.7% to $126.38 billion in 2009 from $116.28 billion in 2008.
Web sales now account for 6.5% of retail sales, up from 6.2% in 2008.
The Top 100 grew 9.1% and the smallest 100 grew 2%, further evidence that big online retailers are taking market share.
As expected, Amazon is leading the rankings with annual revenues of $24.51 billion.
In total, there are hardly any surprises in the upper echelon. In comparison to last year, only Walmart appears as a newcomer amongst the Top 10. Nonetheless, with $4.24 billion of online revenue (+17%), Apple was able to jump ahead to 4th place.
Also making upward moves on the list are the American private shopping clubs. Three were able to move to upper-middle rank:
RueLaLa was able to reach 103rd place by nearly doubling their revenue to $157 million.
"“Assuming that we continue to see the kind of engagement and excitement from our NY members, we’ll roll it out pretty quickly across the country,” Lyne says. As I mentioned, the company is looking at roughly 15 to 20 markets for City’s national roll out."
"FanForce offers a white-label Groupon of sorts, allowing small businesses to create their own deals. FanForce takes care of the promotion of deals and offers, sell the vouchers and collect payments. "
Jewelry Television Mass customization of diamond rings, via HelloIngo (German link):
“On the new daughter site diamonddesigngallery.com you can design your own diamond ring. And even down to the smallest detail.
Around 60,000 diamonds are available to choose from. With a search, you can refine down to carat weight, clarity, color, cut and price and have the resulting selection of matching stones displayed.”
Fitting to Lars Hinrichs’ stroke of genius for Europe’s aspiring tech entrepreneurs, the current edition of the Economist has a good overview of Europe’s budding startup scene (“Blooming”).
In the past months in London and on his visits to Europe’s leading tech conferences (German link), Exciting Commerce’s Jochen Krisch has held fruitful discussions with almost all of the large VCs (and several of the smaller ones) who have interest in continental Europe. Accel (Groupon, Etsy, Diapers, etc.) has engaged Sven Schmidt (verwandt.de, Dialo, Dealjäger) to be a scout for Germany. Phillip Möhring has switched from Dumont Venture to Seedcamp in London. In Berlin, evening events by international VCs for German entrepreneurs are piling up.
Particularly since Vente-Privée and Swoopo, Europe has been a source of exciting new business ideas for e-commerce. All this interest can be useful. The Economist writes:
"Even Silicon Valley entrepreneurs have been heard saying they would like to do something “like vente-privee”. In the tech heartland, this is the ultimate compliment.
You may joke that America is at last discovering Europe. But that reflects a change in European entrepreneurial potential more than in American attitudes.
In recent years, a lively environment for young companies has emerged in Europe, complete with serial entrepreneurs, experienced venture capitalists and the necessary supporting infrastructure, such as law firms and PR agencies.
And it is most visible where Europe has been considered weakest: the internet and other parts of the information-technology industry."
While there is no lack of support, failure is still often to be suffered when looking for entrepreneurs who have the requisite bite. If you have what it takes and you want to start a company: the current timing will deliver almost ideal conditions.
Entrepreneurial types should get into early contact with angels and VC, even if they don’t currently have a burning business idea in mind. International VCs in particular often have fairly exact expectations and are constantly looking for motivated people with new ideas.
Whoever is interested to test out and grow new e-commerce business models to success are welcome to contact us via our Exceed Program (exceed@excitingcommerce.com). We have currently in the Exceed Program a dozen or so small and large ideas which are only waiting for the right motivated founding team. Contact us!
New e-commerce ideas are also welcome at the Ecommerce-Alliance, who are running their E-Commerce Challenge this summer. The website is in German, but the contest is open to non-German entrepreneurs with aspirations to break into the German market (parts of the prize package are useable only in Germany).
Acton Capital Partners (Zooplus, Glasses Direct, MyTheresa, Etsy) have recently closed a 150 million euro fund in May. This fund focuses primarily on strong growth (e-commerce) enterprises which are already on the market for a few years.
Not only is Germany seeing new and ambitious initiatives spring up such as Hanse Ventures (German link) or HackFwd.
In the framework of Exciting Commerce's Exceed Program these past months, we have given a lot of thought towards what the optimal financing model for an innovation program should look like.
It is generally known that due to fallen start-up costs, existing investment models (incubators, VC models and the like) are not the best incentives for the next generation of innovators who will change the world for us.
For this reason, there are currently many experiments ongoing in the investor scene aimed at finding new models which will maximize chances of finding the next revolutionary idea.
