By Nora Ali
For a new e-commerce entrant to compete against Amazon ($AMZN), it may boil down to curation -- a problem that Amazon, with its famously crowded homepage, is yet to solve.
That’s what Imran Khan, the former head of strategy at Snap ($SNAP), and Cate Khan, a former Senior VP at Quidsi, are banking on to make their newly launched Verishop stand out in a crowded digital shopping space.
The online platform tries to improve upon all the factors that are problematic with the Amazon experience, and marries that experience with all the things that are “right” with the future of e-commerce.
On Amazon, counterfeit goods are becoming increasingly problematic, exposing the risk of opening up a marketplace to third-party sellers with minimal friction. Verishop buys inventory from the brands on its platform to ensure that all products are vetted, which removes a lot of risk for the brands themselves. This is in contrast to Amazon’s recently announced purge of small suppliers, where the onus is put back on mom-and-pop shops to sell directly on the e-commerce giant’s platform, giving them less insight into future demand.
Verishop also offers free two-day shipping. While this benefit is now an expectation more than a novelty in today’s online shopping ecosystem (with Walmart ($WMT), Target ($TGT), Amazon, and plenty of other big-box retailers offering the service), there are two critical differences: first, Verishop requires no membership fee. Amazon raised its yearly Prime Membership to $119, Walmart just announced their grocery subscription service for $98, and Target is expanding its Shipt program to include a $99 yearly membership for free same-day delivery. The lack of a membership requirement is an automatic draw to a service that offers fast shipping.
Secondly, Verishop requires no minimum purchase. This is a luxury that comes with memberships like Amazon Prime, but Verishop can offer this without a membership fee because of the nature of the products it will sell: instead of low-margin household goods, it will focus on more high end, digitally native brands, which tend to have the benefit of more robust margins. This also allows customers to forego the mental barrier of meeting minimum order requirements on individual digitally native brands’ platforms.
Beyond the theme of offering fast and easy delivery, Verishop is latching on to the direct-to-consumer (D2C) craze. Many of these brands are wary of selling on platforms like Amazon and Walmart for fear of brand dilution and getting lost in the clutter of massive marketplaces.
Khan’s platform allows customers to discover products they didn’t know they were looking for, a challenge that D2C companies have been trying to solve through targeted advertising on Instagram and other social platforms. Customer acquisition costs are incredibly high for D2C brands, and Verishop creates a digital destination for these brands to draw new eyes when customer intent is higher to buy than when they’re scrolling through their social media feeds.
While Amazon gets the headlines, it is arguably not Verishop’s biggest competitor. Instagram, Pinterest ($PINS), and other social platforms are investing heavily in commerce and are taking advertising dollars from digitally native brands by the bucketload.
Verishop is taking a page out of these social platforms’ books by doubling down on influencer culture. If Verishop is a curated digital mall, then the company’s “Tastemakers” section is a dedicated floor for influencer stores. In this section, influencers have their own pages where they can promote products and draw in fans. Verishop is not only curating products -- it’s also curating influencers, one of the highest-potential “new” vehicles for advertising.
The last theme on which Verishop is capitalizing is that of socially responsible brands. The “Responsible Shop” gives customers an easy way to find brands that make them feel good about their purchases. In an age where a brand’s social and environmental responsibility is becoming a requirement for customer loyalty, this is yet another draw for a site that hopes to “bring joy back to the customers.”
While the race to capture customers’ wallets online is accelerating, Verishop may just have the tools - and insight into the best of both worlds - to take on e-commerce giants like Amazon and social platforms like Instagram.