LONDON, United Kingdom — The Internet has re-wired the way we shop. No longer limited to retailers that happen to be nearby, shoppers are now able to browse a much larger catalogue of products than ever before, across a wide array of e-commerce sites. But sifting though this expanded offering to find the right products poses new challenges of its own.
By aggregating large databases of products under one roof and layering on social curation tools, sites like Lyst and The Fancy have emerged to help consumers browse many retailers in one place, separate signal from noise, and find more interesting and personally relevant items. “It’s very easy to arrange things on-the-fly online, based on what you’re interested in,” says Chris Morton, founder and CEO of Lyst. “I now expect an experience that knows what I like and shows it to me.”
But when it comes to buying, many of these same social curation sites have traditionally returned customers to third-party brand and retailer sites to complete their transactions, often leading to checkout abandonment. “Because the quality of our partners’ checkouts vary widely —between the good and the bad there’s sometimes a 10 percent difference in conversion — and because consumers are [being asked to leave] their current environment — there’s potential for a disconnect,” says Morton.
Times are changing, however. Earlier this year, Lyst launched its own checkout, aptly named “Universal Cart,” that lets shoppers both browse relevant products from a variety of retailers and transact — all in one place. The simplified, two-step checkout slots directly into supplier systems, allowing for realtime stock synchronisation. When the purchase is made, Lyst alerts the retailer to fulfil the order.
“From day one, we wanted a transactional element to the site. We thought sales would rise if we let customers buy with us,” says Morton. And indeed, participating brands, including Lane Crawford, Helmut Lang and Alexander Wang, saw sales initiated via Lyst grow by more than five fold in the two months following launch, reports Morton. “It’s easy for the customer, because we’ve designed a really efficient checkout. It’s a more consistent experience than sending them elsewhere to buy. We believe transacting in one place reduces the risk of abandonment, and it’s great for our partners because sales increase.”
Of course, the viability of a system like Lyst’s “Universal Checkout” depends on getting brands and retailers to participate. “The luxury fashion market is an incredibly political landscape,” says Jon Copestake, a retail analyst at The Economist Intelligent Unit. “I can see difficulties convincing brands from different luxury groups to transact out of a lateral space akin to that of a Pinterest board.”
Then, there’s the question of who owns the customer relationship and the data that results from a sale. “The traditional way of thinking about e-commerce is the value of the assets you can sell. But there’s been a definite sea change in recent years, where companies are beginning to see the customer [and their data] as assets in and of themselves,” says Copestake. So what happens when the point of sale shifts and the data generated from purchases once made on retailer sites is collected elsewhere?
Rather than taking data away from retailers, Lyst helps them by providing additional information, says Morton. “In essence, Lyst is a data company. Our partners ask us all sorts of things about who is following them on the site and who is buying or ‘lysting’ their products. We share the trends we're seeing.”
Transactions that occur away from traditional retailer sites can also diminish the importance of those retailers in the minds of consumers. This is another issue Morton is fighting against: “We exist as a marketing platform to help brands grow their business,” he says. “It's really important that customers understand where their purchase is coming from — and we make that clear. Yes, they can transact with us, but then it's over to the retailer to fulfil the order — they're still getting the packaging, customer care and delivery system [from the retailer].”
The Fancy, which also allows users to checkout on its site, uses consumer demand as its primary bargaining tool for getting brands and retailers on board. When a user on The Fancy uploads a product they must declare where it orginates; brands are then encouraged to claim their items and allow shoppers to transact on the basis that the interest demonstrated by the community will translate into sales.
"Our system is driven off consumer demand. If people ‘Fancy’ something, it means they want to buy it," says The Fancy founder Joe Einhorn. "We are having an easy time finding products to sell on [The] Fancy [because brands soon find it impossible to ignore the revenue stream].”
But if an integrated checkout as seen on sites like Lyst and The Fancy offers both a more seamless consumer experience and drives sales for participating brands and retailers, might we soon see the emergence of a universal cart that delivers these benefits across all retailers, for all purchases?
“I can certainly see potential in a concept that lets us store all digital purchases in one place, ready to be bought anywhere, on any device,” says Copestake. “At the very least, it would save time. The average checkout comprises five steps, eliminate those, say, 10 minutes spent on every separate checkout and we're talking some serious streamlining.”
Heather Marie, CEO of 72Lux, a white-label e-commerce platform which lets customers shop straight from their favourite editorial sites and offers a universal checkout, agrees: “We’ll see this happening in the next few years.”
But who would own this?
“It would be one of three possibilities: either a social platform with a massive user base, say Facebook or Pinterest; a financial software provider; or a large e-commerce platform,” says Copstake. “Apple are a good candidate too. They have millions of credit card numbers already through the iTunes store and I can see them launching this as a standard add-on with any Apple account.”