Demandware founder Stephan Schambach is turning his eye to the mobile space — and counts Jimmy Choo, Bally and Belstaff among its first brand partners.
Today Schambach will unveil his third e-commerce venture, NewStore, a mobile commerce platform designed with both a consumer- and store associate-facing product. Schambach brought two previous companies he founded, Intershop Communications and Demandware, to initial public offerings in 1998 and 2012, respectively. Demandware now commands a market capitalization of almost $2 billion.
“Omnichannel has been talked about for 20 years but it’s been so difficult to do,” Schambach said Tuesday, noting that “there’s not much out there” that addresses the melding of on- and off-line shopping. “There are custom mobile experiences that cost a lot of money that only the largest retailers can afford.”
He said that the relatively quick integration of digital and brick-and-mortar retailers such as Macy’s, Saks Fifth Avenue and Nordstrom have been able to create is out of reach for most fashion brands. But with the help of NewStore, a cloud-and mobile-based product that can be integrated with existing e-commerce systems, omnichannel can quickly become a reality.
The mobile retail platform secured $38 million in funding from General Catalyst partners, Schambach himself and NewStore’s management team. A staff of 75 already operates out of a downtown Boston, Mass., headquarters and smaller development center in Berlin.
Schambach said apps powered by NewStore allow consumers to order online and pick up in-store or have items shipped to them within one hour if there is a store or warehouse within 15 miles. Other delivery options include traditional mail carrier. With instantaneous purchasing capability from Apple Pay, there is no need for a shopping cart, and Touch ID eliminates registration, passwords or forms to fill out. Additionally, push notifications are sent with the status of your purchase instead of an e-mail.
He called fashion and luxury brands a “fantastic first application” for his technology, which will roll out early next year. The white label solution will only be available to monobrands upon launch (department stores need additional functionality that will be added later).
“Mobile traffic has been growing exponentially, and for many it’s more than 50 percent. [But] the dirty little secret is that e-commerce conversion is around 3 to 4 percent, and for mobile, it’s a quarter of that or worse,” Schambach said. “The e-commerce model is a disappointment for many brands and for consumers who are trying to order with mobile devices.”
It’s these statistics that led mobile to become the focal point of Schambach’s newest company, and a whirlwind tour to 45 flagship retail locations with Philip Granof, chief marketing officer of NewStore, only solidified this. Granof said that associates from retailers such as Nike, Lucky Brand and Anthropologie live their daily lives in a “world of apps,” but when they go to work there isn’t an app to help them.
“It’s a real disconnect. Retailers would be surprised at the readiness of their associates to use [apps]. Facebook, Snapchat and Instagram and Pinterest have been training the sales force of today to work with apps really well,” Granof said.
NewStore is working to change this. The company is building app options for store associates that will help them connect with shoppers.
Upon entering a store that employs this mobile technology, an iPad-clad kiosk will welcome customers encouraging them to download the brand’s app, partnered with some sort of incentive (this can range from early access to a collection or a discount). Consumers then enter their mobile numbers into the iPad and are sent a text message with a link to download the app. If the consumer provides a mobile number that has shopped with the store before, an immediate real-time shopping list and history populates the app for the shopper and sales associate.
This will help the sales associate know who’s in the store and help them connect.
“I was wondering what else could be done in e-commerce,” Schambach said. “I thought about a payment platform for a while, but thank god I didn’t do that because it’s becoming a game between Apple and Google.”