Wanelo is tackling the much-talked-about but elusive phenomenon known as social commerce — and seeing some impressive gains.
The shopping platform has become a go-to digital mall where more than 11 million users come expressly to shop. Wanelo has 350,000 digital stores with 20 million products and every item uploaded to the platform contains a direct path to purchase.
This story first appeared in the October 29, 2014 issue of WWD. Subscribe Today.
Founder and chief executive officer Deena Varshavskaya said Wanelo was born out of necessity. Leading social media platforms from Facebook and Twitter to Pinterest and Instagram were not transforming the commerce experience as expected. They failed to address the particular set of problems that an online shopping venue has to solve.
If a user stumbled upon a desired item on Pinterest, for example, it’s hard to find if the product is in stock, if the store has it in their size and if it’s on sale.
“That’s why I believe that a social platform needs to change to have this impact on the future. It must focus on solving these problems exclusively,” Varshavskaya said of Wanelo, which she founded in 2011. The venture was self-funded for two years before she received any outside capital. To date, the company has raised $14 million from First Round Capital, Floodgate, Red Swan, Ooga Labs and Forerunner Ventures.
Varshavskaya pointed out that the Wanelo user is 90 percent female, 90 percent U.S.-based and 90 percent on mobile. Fifty percent of users are between the ages of 18 and 25 and they come to Wanelo to do just one thing: shop.
She stressed the need for the “world’s digital mall curated by people” as she outlined the decline of the physical shopping mall. In the Nineties, consumers visited malls about two times a month for about four hours at a time, driving $1 trillion in sales. Today, 15 percent of malls are expected to shut down over the next decade, she said.
“As malls close, the consumer is disappearing. Malls are competing with an entire new entity,” Varshavskaya said, adding that her shopper is one who spends six hours online, three hours on a mobile device and 70 minutes on social networks per day. She noted that 87 percent of Millennials never leave their phones and can spend up to three hours on social networks every day. One third of them don’t frequent malls, 84 percent hate advertising and 50 percent shop online nearly every day for at least an hour.
That is perhaps why retailers such as Nordstrom, Urban Outfitters and Sephora are all active on the platform. In June, Nordstrom rolled out Wanelo wall displays in 107 of its doors, featuring styles it already carries that are rated most popular by Wanelo’s users. The retailer gained one million Wanelo followers in just five months and now has 1.4 million.
According to Varshavskaya, Urban Outfitters’ Wanelo shoppers convert at a rate four times greater than any other social network (the store has implemented a Wanelo button alongside other social media action buttons on product pages), and Sephora called the platform its “fastest-growing social platform.” Farfetch said Wanelo converts five times greater than Pinterest.
Varshavskaya compared engagement on Pinterest to engagement on Wanelo. Varshavskaya claimed that the average product on Wanelo gets 140 saves and 19 buy clicks, versus Pinterest, where a pin typically sees about 10 repins.