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TreatFeed: Converting Product Recommendations to Rewards

TreatFeed, the startup from HauteLook founders Brett Markinson and Konstantin Glasmacher, has raised $5.4 million in their first financing round. Participating in the financing are amongst others, Norwest Partners (press release).

TreatFeed offers rewards to users in exchange for the sharing they do within their social network which counts as word-of-mouth marketing.

"TreatFeed aggregates deals from retailers allows members earn rewards for sharing deals, and for the ongoing transactions of the people in their network. Users are essentially compensated for sharing in their social graph, or ‘social tree.’ Points can then be redeemed for products, exclusive offers and even converted into cash. TreatFeed makes money from affiliate fees."

Currently the system is understandably geared towards building a user base:

"And the fact that TreatFeed is rewarding people for bringing in more users, rather than for recommending specific deals, seems smart, because it will help the site build out its user base quickly."

Cooperations with publishers are planned:

"And it will work on affiliate programs with publishers, allowing publishers to make money not just on the shoppers who sign up directly from their site, but on the larger SocialTree that builds as those shoppers continue using TreatFeed and bringing in their friends."

What TreatFeed is doing well in comparison to the many other commissions based services is that they avoid a direct cashout but rather use a loyalty point system. This subtle difference helps to separate pure monetary incentive with the users’ appetite to collect points. Both aspects can be driven and controlled separately.

The TreatFeed founders had most recently sold Hautelook and the shoe club SoleSociety to Nordstrom for $270 million. Under the umbrella of Lagovent, they are running an incubator for new e-commerce business models out of Los Angeles.

Related posts:

• Social Shopping Network Lockerz Raises Another $30 Million
• From Social Shopping to Personal Shopping Network
• How Woot! Is Working With Blippy, The Twitter For Purchases

Originally posted in German by Marcel Weiss and Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

One Click Gestures and the Social Web Pattern in E-commerce

At the Live Shopping Days 2011 conference, Exciting Commerce’s own Marcel Weiss gave a presentation on the regularly recurring information architecture patterns seen with many of the services found in the social web. He spoke about the transferability of this pattern to the realm of e-commerce.

The Social Web Pattern in E-Commerce (by Marcel Weiss)

View more presentations from excitingcommerce

Marcel Weiss has gathered the recurring themes under the umbrella term “Social Web Pattern”.

The Social Web Pattern consists of four cornerstone principles:

• The Follower Principle
• The Stream
• The One Click Gesture
• Share Connection to other web services

The Social Web Pattern has already been elucidated in the e-commerce context in our German blog when Groupon announced their new platform strategy.

Etsy is also exhibiting the Social Web Pattern with their Activity Feed and Circles.

If the information architecture of services such as Quora is looked at very closely, one can learn a great deal for their own startup.

Decisive is how to correctly interpret the observed mechanisms according to the context of your own web services.

Groupon applies the Follower Principle with a clear separation between merchants (“Groupon Stores”) and end users. Etsy does not. Everyone in the Circle is equal. This has a reason: while Groupon engages local merchants and their potential customers, Etsy’s community of handmade craft producers can also at the same time be customers for others Etsy users.

A relatively basic example of how the One Click Gesture could work for a Groupon-like deal platform:

As end user I see in my stream a deal which I find interesting (example: discount theatre tickets). At this point I am not yet sure if I want to buy it. I click on a “maybe” or “interested” button.

My ambivalent interest on the tickets is communicated to my network of friends. Very similar to how clicking on “Like” on a website transfers the content to my Facebook newsfeed. My friends can then react and contribute their opinion like “hey, we can both buy tickets and go together”.

The dissemination of the deals would ideally be strengthened and would lead to an increase in revenues.

We will continue to follow this topic on future posts here on Exciting Commerce.

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

PayPal vs. Facebook and Square

TechCrunch writes about how Facebook and Square can potentially threaten PayPal.

On Square:

"Square seems to be a consumer-mobile-focused payment system for offline payments using cards, kind of a well-designed poor man’s POS (point of sale system). But look deeper: what I find super interesting is not the payments small sellers and retailers are receiving through credit cards. This is a necessary evil. What’s interesting to me is what these users then do with this money they have in Square’s system—currently deposited to their bank accounts, but which can potentially stay with Square and be used as a low cost funding source."

On Facebook:

"of all the large companies it not only has the largest, most diverse and global user base, it also has a rather clear identity strategy that extends beyond their website and is based on real information. This is a critical element in payments today. The ability to control identity isn’t the be-all and end-all of payments (spam, abuse and fake accounts on Facebook prove that) but if enforced properly it will provide a good enough basis for seller and consumer risk management."

Related posts:

• PayPal X: PayPal Launches Platform For Third Party Apps
• Facebook As Social Commerce Engine?
• Facebook Credits Allow A Look Into User’s Wallets

Tengelmann and Holtzbrinck Ventures invest in shoe store Lamoda.ru

Tengelmann and Holtzbrinck Ventures among others have invested in the Russian shoe-shopping site Lamoda.ru:

"Russian online shoe store Lamoda.ru has raised funding from Tengelmann Group, Holtzbrinck Ventures and Investment AB Kinnevik. Launched in February 2011, Lamoda.ru is operated by Moscow-based KupiShoes. The store was initially funded by the German internet business incubator Rocket Internet (Samwer brothers) of CEO Florian Heinemann."

Related posts:

• Holtzbrinck Ventures Announces International Investor
• Shoes of Prey: Can It Be Fun to Design Shoes?
• Javari: Amazon Expands Shoe Retailer To France

Etsy and its systemic dilemma

Inc. Magazine has published a detailed portrait of Etsy:

"Etsy has 165 employees and revenue of roughly $40 million. It has raised $50 million from some of the tech world's most prominent venture capitalists and is thought by many to be a prime candidate for an IPO."

"In 2010, Etsy sellers moved $314 million worth of merchandise—cuff links made from 19th-century shotgun shells ($50), knives forged by a master blacksmith in Albuquerque ($150), sweaters knit by a grandmother in Portugal ($225)—a 74 percent increase over the previous year."

"It seems fair to assume, using statistics the company has released, that there are fewer than 1,000 sellers who make $30,000 a year or more, and a mere handful who make more than $100,000."

Especially interesting is the described dilemma that comes with Etsys systemic constraints:

""Etsy has made it possible for a lot of small businesses to get off the ground," says Dale Dougherty, co-founder of O'Reilly Media and the publisher of Make magazine, which covers the do-it-yourself economy. "But even the most successful crafters run up against the limits of their own labor. Handmade can be a limited idea."

In other words, the very qualities that make Etsy so attractive to new sellers put the most successful Etsy sellers in an awkward position: They must stay small or abandon Etsy."

Related posts:

• Etsy Grows Revenues from $180 Million to $314 Million
• Etsy 2008-2010: Business Growth Under the Microscope
• Real time: Etsy enables PubSubHubbub-enhanced feeds

Social Shopping Network Lockerz Raises Another $30 Million

Lockerz, the currently most exciting business in the social shopping segment, received a further $30 million in a new financing round – this in addition to the previously announced $30 million. The financing can still grow to $45 million:

"Lockerz, a fairly new social shopping network, just raised a big new round of funding. The Seattle based company has already closed $30 million with another round bringing the total amount of funding as high as $45 million."

The company, founded in New York and currently headquartered in Seattle, is focussed on a very young audience:

"As we’ve written in the past, Lockerz revolves around the idea that influencers within a social network can become brand and content advocates and affect the behavior of their friends.

The network, which has 18 million members worldwide, is primarily targeted towards men and women ages 13 to 30, attempting to build a community of trendsetters and tastemakers who love to shop, play and connect on the Web.

Users can earn points and discounts on brands by sharing content on the site."

Furthermore, Lockerz is continually launching new services. In January they acquired Plixi (aka TweetPhoto). And very recently they managed to win over Amazon veteran Mark Stabingas as COO.

Related posts:

• Lockerz Takes Over TweetPhoto/Plixi for Lockerz Photos
• Lockerz Founder Kathy Savitt on the Lockerz Phenomenon
• Lockerz: The Shopping Extravaganza for the Next Generation

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

Spreadshirt Presents New API Strategy

Armed with a boatload of examples, Spreadshirt CMO Philip Rooke introduced the new Spreadshirt API/App strategy at the German Online-Handelskongress in Wiesbaden last week.

In the past years, Spreadshirt has completely restructured or reinvented their shopping software so that internal and external applications would be able access the platform via an API.

This enables Spreadshirt to not only speed up the implementation of partner projects, but also to use the API for internally developed services such as the new t-shirt designer. For external developers this means that in the future they will be able to create original t-shirt design tools (such as for different user devices like tablets or smartphones).

To build up some buzz around the API, Spreadshirt kicked off a developer competition recently.

With the API, it will be also be easier for Spreadshirt designers to offer their creations on Amazon or other marketplaces.

Spreadshirt is banking now on the creativity, ideas and a load of mashups from the online design community. We are watching the developments with interest.

We first mentioned the Spreadshirt API last November.

Related posts:

• Extras: Facebook, Tippr, Cookies, Spreadshirt-API
• Extras: Magento Mobile, Facebook Credits, Zappos API
• Wine.com Provides API for Commercial Use
• Nick Lansley of Tesco.com Speaks on “APIs and the 4th Screen”

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

LSD 2011 Startup Expo: UPcload, Jatuso and Artflakes

At the Live Shopping Days conference this year we organized a Startup Expo where up-and-coming startups had the opportunity to present themselves to the conference participants. The resonance was very positive and the intention is to continue the practice in a similar form for the next LSD conferences.

Here we highlight three startups of particular interest:

UPcload

UPcload wants to revolutionize the online shopping process for clothes. UPcload has developed a technology which allows users to directly measure their body size with their webcam and convert this to clothing sizes for fashion manufacturers.

Not only are returns expected to drop in the ideal case. UPcload has interesting plans for the future of their product. For example, it may be possible to show members of a fashion shopping club what other users with the same body shape have purchased. Or an intelligent filter could be built into eBay which helps to display only offers coming from sellers with the same stature.

With the UPcload ID, users can give access to their body measurements to an entire shopping network affiliated with UPcload.

Should UPcload make it past the first hurdle to get measurements from users via webcam, then this will be a startup to keep an eye on.

Jatuso

Jatuso wants to use a variety of offerings to create a platform which will bring brick and mortar business, e-commerce and end consumers together.

The platform standardizes and coordinates all relevant transaction processes, data formats and information used before and during an end customer order. By doing so it attempts to make the purchase process for all parties easier than ever before.

With Scanme, Jatuso will offer special machines to scan products (or packaging from used up products in the home).

“All product information, special offers or recommendations are stored in a central database and can over all channels (ScanMe home, ScanMe mobile, Webshop, etc) be put into a central and synchronised customer shopping cart (regardless of whether it is single persons or a whole family).”

Jatuso has gone into serial production of the scanning machines two weeks ago. Mobile apps are still in development.

Current cooperation-partners are amongst others: EDEKA Southwest, EDEKA Minden and EDEKA North. According to own statements, any brick and mortar retailer can rollout a Jatuso system within 14 days.

Artflakes

Artflakes considers itself to be “Community Marketplace + Fulfillment”. Artflakes allows independent artists and photographers to offer their work as prints, posters or greeting cards. Artflakes does not only offer an internet showroom to promote products but also takes over the processing of the order, production and fulfillment. Currently Artflakes is still in a closed test phase for the artist's interface.

Artflakes has also launched ArtSticker two weeks ago. Via the APIs from photo sharing sites Instagram and Picplz, Artflakes can take user photos and print them as vinyl stickers. A good example of how APIs can be used in e-commerce.

Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.

Birchbox: The Founders Speak About Their Plans

Although just a few months old, some are seeing Birchbox as the next big thing in e-commerce. Birchbox founders Katia Beauchamp and Hayley Barna speak about their plans for the beauty sample subscription service in a The Next Web interview:

"Since officially launching last September, Birchbox now has 20,000+ subscribers and customers in all 50 states with an average age of 31 and average income of  $90,000.

“The name Birchbox is gender and product neutral. We first gained our customers’ trust through beauty, but we always knew it wouldn’t be just beauty.

While we’ll stay on the lifestyle side of the business, expect future boxes to hold chocolate tea and accessories,” says Katia. Also on the agenda is a Birchbox vYou channel, where users can ask the BirchBox ladies for make-up and beauty advice."

Similar concepts in Germany are Glossybox and more recently Boobox.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Books Tips for 2011 – From January to March

Who are the hottest contenders to get on the list of top selling books for 2011? The results of the last 3 months can give us a first guess.

The New Capitalist ("Building a Disruptively Better Business") from Umair Haque and The Art of Non-Conformity ("Set Your Own Rules, And Change the World") from Chris Guillebeau counts amongst the new high flyers for 2011.

Other topsellers were already on the list of Top 25 Books of the Year 2010. Leading by a large margin is Rework ("Change the Way You Work Forever") from 37Signals. Also making a big jump forwards are Buzz ("Real-life lessons in Word-of-mouth marketing") from Emanuel Rosen and Game Based Marketing ("Inspire Customer Loyalty Through Rewards, Challenges, and Contests") from Gabe Zichermann.

Here the top 6 English books in the first quarter of 2011:

1. Rework ("Change the Way You Work Forever")
2. The New Capitalist ("Building a Disruptively Better Business")
3. Business Model Generation ("A Handbook for Visionaries, Game Changers, and Challengers")
4. Buzz ("Real-life lessons in Word-of-mouth marketing")
5. The Art of Non-Conformity ("Set Your Own Rules, And Change the World")
6. Game Based Marketing ("Inspire Customer Loyalty Through Rewards, Challenges, and Contests")
   

These and other book recommendations can be found in our books category.

Related posts:

• Advanced Business Models: The Library for Pioneering Entrepreneurs
• Advanced Marketing: The Viral Library
• The Top 25 Business Books of the Year 2010

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo