Local shopping online is going beyond deep discount daily deals on foods and services. Instead, smart money has been quietly investing in platforms that focus on bringing this traditionally brick-and-mortar market online; and they are each doing it their own way. A-list investors, such as Andreessen Horowitz, Benchmark, Greylock Partners, Jack Dorsey, and Condé Nast, have been making investments into this largely neglected and fragmented local retail space.
Shoptiques, based in NYC, is an Andreessen Horowitz and Y Combinator backed startup founded by a recent Harvard Business School graduate. London-based Farfetch recently closed a $25M Series C funding round led by fashion publishing powerhouse Condé Nast. Last week, Jack Dorsey announced that Square will also be entering into local marketplace space with the debut of Square Market. All of these platforms make products hidden in local shops available to everyone whether they live in the neighborhood or 3,000 miles away.
Given an elevator pitch, the concept of all these startups, including new Chicago-based startup Reppio, will all sound like a "local Etsy," however the commonality ends there. The targeted customer base, product types, execution strategies, and longer-term visions vary significantly from platform to platform.
Square Market appears to be utility-based search of products and services (i.e. purposeful shopping), while Shoptiques’ angle is to focus on upper-middle class female, fashion shoppers. Farfetch caters to the ultra-high end fashionistas, with an average purchasing price exceeding $600. Reppio emphasizes the exploration aspect of local shopping by allowing users to find, follow, and shop Chicago’s hidden gems.
Investors and proven operators moving into the space signal that significant value can be both created and captured in many different ways. There is no clear winner in online aggregation of the $100B+ local retail market, but it’s a space so large and diverse that it can easily support multiple winners. So, watch out for how things shake out in the near future and support Chicago’s homegrown answer to online local shopping, Reppio.
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