Amazon’s e-commerce dominance and consumers’ increased shopping via smartphones have got brick-and-mortar retailers and brands scrambling to adapt.
A young Boston startup, NewStore, thinks it has the answer for retailers. It’s certainly got a lot of cash to try and prove it.
NewStore launched today with $38 million in funding from lead investor General Catalyst Partners, as well as money from founder and CEO Stephan Schambach and other NewStore executives. Schambach previously founded two e-commerce companies that went public, Demandware and Intershop Communications.
Retailers are seeing an uptick in mobile Web traffic, but they’re struggling to convert those visitors into customers, Schambach says. “This means mobile has untapped potential for retailers, and that’s where NewStore comes in,” he says in a press release.
NewStore has built cloud-based, mobile-focused retail software that integrates with stores’ existing systems. It aims to ease the buying process on smartphones and unify the offline and online shopping experiences—which are “still fundamentally at odds,” the company says.
A video on NewStore’s website depicts a hypothetical use case for its software: A young woman walks into a store planning to buy a chic dress from her favorite brand. She downloads the brand’s app on her iPhone, and a sales associate gets an alert on her phone that this past customer just walked in. The sales person can see the customer’s shopping preferences and order history.
The woman picks out a dress and buys it on the spot using Apple Pay. Later in the day, the sales associate pings the customer on her phone with a recommended pair of shoes to go with the dress. She orders them with the push of a couple buttons and has them delivered to her home a few hours later. When she finds that the shoes are too tight, she requests an exchange via the app, and a new pair of shoes is delivered shortly thereafter. The delivery driver returns the unwanted shoes to the store.
This scenario—if the software really works this way—seems to fuse location-based marketing with the on-demand retail economy. Each is a huge market opportunity, and the question is how well they can be combined.
NewStore says it already has one customer, LLX Global Business Services SA, an affiliate of the brands Jimmy Choo, Bally, and Belstaff.
The company employs 75 people, 15 of them in Boston and the rest in Berlin, Germany, spokeswoman Casey Cardinal says in an e-mail. NewStore expects to hire another 25 people by the end of the year, she adds.