Chicago e-commerce startups catapult into the new year with new platforms

Posted on January 10, 2014


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CHICAGO (Chicago Tribune Blue, Sky Innovation) — There’s evidence of an innovation race in a fast-moving e-commerce space.

EBay’s PayPal acquired Chicago-based Braintree in September for $800 million as part of an effort to innovate in a hypercompetitive market. EBay and Amazon now find themselves competing with not just each other but with traditional retailers such as Walmart and Target seeking greater online and mobile sales.

Many Chicago startups are also competing with large retailers.

“We do see a lot of phenomenal things coming out of startup brands,” said Artemis Berry, vice president of digital retail at the National Retail Federation. And startups are taking digital to new levels that are highly visual and highly niche.

Here are Chicago-based examples:


When David Kalt launched last January, he realized eBay wasn’t a strong enough marketplace to sell musical equipment, which can be very expensive. He built Reverb for consumers and sellers to optimize pricing and selling with videos, testimonials and photography. It’s like Etsy but for instruments.

The company recently received $2.3 million in funding from Lightbank, which was founded by Groupon executives Eric Lefkofsky and Brad Keywell.

Companies are taking a niche audience and delivering customer service and creativity. Berry says it’s “making shopping more fun.” It’s amplifying consumer discovery — connecting merchants to new consumers and consumers to new products.

“It’s helping people buy things, discover things, that they didn’t know they wanted or needed,” Berry said.


Mystery Tackle Box

Jeremy Gwynne founded Mystery Tackle Box in July 2012, selling monthly subscriptions of freshwater bass fishing products in curated boxes. Each month, subscribers get a box of new gear, connecting them to new ways to fish.

Gwynne now ramps up operations by moving into new fish species, which Gwynne says could triple sales. The NRF named it an innovative retailer, the first-ever fishing company to receive the honor.

His team now connects fishing merchants nationwide to a greater customer base. It’s facilitated by the product, but also by the team’s growing digital presence, with more than 100,000 Facebook fans.

The way they cater to their community is “not something we had seen before,” said NRF representative Margaret Little, who helped select the tackle box team for its innovation.

Even in a niche industry, the U.S. reportedly has tens of millions of people who fish. “There are more people fishing than there are golfers and tennis players combined,” Gwynne said.

Purely Fashion

Jeremiah Green launched Purely Fashion in May. In December, Green launched a pop-up shop on Michigan Avenue to showcase the platform — a web based, curated fashion site helping connect emerging designers to consumers.

Green said the company taps into a market of 7 million fashion-forward women who spend $6 billion annually. The team has grown to service several thousand users and hundreds of designers, he said. The goal is again discovery: to bring consumers to designers that large retailers tend to avoid.

“We’re an omni-focused business,” Green said. “Right now our challenge is in the execution.”

He said the pop-up shop showcased “the latest and the greatest” and that the company makes strong use of its website, blog and social media presence.

“Each media channel is treated differently by us,” Green said. “It’s to reinforce the brand over and over and monetize the business, especially with the advent of the web app.”

Companies help make themselves successful when they find ways to make digital platforms balance brick-and-mortar appeal and higher levels of customer experience, said NRF’s Berry.

Reverb’s Kalt also owns the Chicago Music Exchange, translating brick-and-mortar experience to online consumer relationships. Mystery Tackle Box’s Gwynne said he works to form intricate relationships with consumers and manufacturers, which draws them into the larger digital social network of anglers that he’s created. And with Purely Fashion, the objective was to have the pop-up storefront bring credence to the digital storefront.

While e-commerce previously meant using payment platforms and social media to connect to consumers, Berry said now it’s a more complicated balance than ever.

“It’s about every single channel disposable to the retailer to connect to the customer,” she said.

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