Own a car? You can be an Uber driver. Own a home? You can be an Airbnb host. What about owning a smartphone? Now you can open your own store. That’s the concept behind Storr, a digital marketplace that brings the gig economy to retailing. With a beta launched in January 2019, Storr enables anyone to open an online store with a phone in just three clicks. Once logged in, users can add their favorite products from participating brands to their profile and promote their Storr vanity link on their social media to earn commission on referred sales (see our visual overview of Storr’s platform). By cutting out the middleman, Storr puts money back in the pockets of its users, rather than retailers, and generates higher margins for participating brands. In turn, Storr is positioning its users as micro-retailers, rewarding them for brand loyalty and referrals.
As we predicted in our U.S. retail outlook for 2019+, platforms like Storr will usher in the next generation of retail, in which shoppers will have a bigger stake in engaging and selling online. With influence shifting from authority to intimacy, we are experiencing the rise of nano-influencers with small to medium-sized followings (i.e., hundreds of followers versus thousands). Storr’s model ensures that everyone is rewarded for sharing product recommendations with their friends and peer network on social media.
To help brands understand and capitalize on this emerging social commerce opportunity, I sat down with Storr CEO and co-founder Eric Senn and Chief Business Officer Torie Crown to discuss how the platform is unlocking the power of the peer and democratizing retail. Here are some highlights from our conversation.
What is Storr and how did it get started?
Eric Senn: I used to write screenplays but I needed more money, so I got into tech. Luckily, my cousin and co-founder [Jason Senn] has a technology background from his time at Urchin Software, which later became Google Analytics. About two years ago, while we were working together on a sports marketing idea with professional athletes, we realized that pro golfer Rickie Fowler had more followers on social media than Puma, his brand sponsor. We asked his team, “You’re bigger than the brand. Why don’t you have your own store?” and they lamented about the costs and complexities of getting into retail on their own. Traditionally, there are many barriers to entry for retail — you have to manage inventory, shipping, payments, etc.
Building on that initial idea, we decided to do a deep dive on commerce and the decline of the traditional distribution model due to the “retail apocalypse.” We saw that younger consumers cared about the product, the brand, and the experience, but not necessarily the channel. From there, we dug into influence and how it relates to products and recommendations. Brands were leveraging influencers to drive awareness because of their reach and authenticity, but we found that 92% of all product recommendations come from shoppers’ friends and families, those peers in your immediate network. That was our “aha” moment for Storr: There was a huge opportunity not to just turn celebrities into retailers, but to enable anyone to open a store online and sell their favorite brands.
That power of the peer is reflected in our ShopperScape® data, with peers having the greatest impact on shoppers’ purchase decisions compared with other social media connections, especially for Centennials.
Share of Shoppers Who Have Made a Purchase as a Result of Key Social Media Connections
(among U.S. primary household shoppers)
Source: ShopperScape®, June 2018
Senn: Exactly. What originated as a celebrity insight morphed into a democratized platform that empowers everyone to sell the products they love. We designed Storr to make it easy for anyone to open a store from their phone and/or buy peer-recommended products from the people they follow. By simply adding their favorite items from participating brands to their personal store, users have the chance to earn a 15%-25% commission on sales that are directed through their Storr page, instead of traditional retailers, without having to handle the hassle of shipping and returns. Storr really is for everyone. In Chicago, we have a woman with only 250 Instagram followers who drove $1,000 worth of sales through Storr last week. She’s already on track to make $25,000 in commission this year. We also had a college student open a store this past weekend and she did $1,700 in sales in 24 hours.
In turn, consumers are not being sold to. They are being referred to, which ends up being more profitable for brands. At scale, Storr gives brands both organic marketing channels to distribute through and higher margins. Unlike other shoppable social media platforms like Instagram, we’re redistributing the money collected on referral traffic to people and charities, since Storr users have the option to donate a percentage of earnings to their charity of choice. Consumers are making a social impact just by buying at retail price through the Storr owner. With this model, everyone wins: The brands, our users, and shoppers are aligned.
We’ve been tracking the rise of similar social platforms in China, such as Little Red Book. Did you look to China for inspiration when you were conceptualizing Storr?
Senn: While we had a pulse on what was happening in China, the domestic market has really been our focus from the start, though it certainly helps to have a co-founder based in Singapore. We wanted to build a platform that is well suited for U.S. brands and tailored to the consumer dynamics here. That said, we are set up to expand into Europe quickly. China is definitely a harder market to navigate, but because we don’t manage order fulfillment, it will be easier for us to scale globally.
What is the process for brands to join Storr?
Senn: We have a whole team that is dedicated to brand acquisition. Torie Crown, our chief business officer, was our first hire, and she has since brought on 200 brands (126 of which are currently live on the platform). Torie has helped us create a model for Shopify brands to integrate with Storr in just 30 seconds. We know that 10% of all Black Friday 2018 sales went through Shopify brands in 2018, so we are trying to capitalize on that trend. We also have bigger partners like Adidas and Marmot where we have built a custom API for them to plug into and upload their product catalog. Ultimately, we are positioning [ourselves] as a tech company in the retail space; we want to empower our brand partners to reach new audiences through millions of referrals. We make the most trusted channels transactional.
Torie Crown: We’ve had brands come on board by reaching out via our Storr.co website or because a user has expressed interest in selling their products on Storr. From there, we provide the brand with a walk-through of the Storr platform and discuss the easiest path for integration, which does not cost the brand anything. Once set up, we operate on a revenue share model where the user receives 10%-30% commission (determined by the brand); Storr receives 10% minus all payment processing and payout fees, and the brand partner nets the remaining amount [80-60%] of each transaction. In addition to organic ambassadorship, the brand also [will get] access to real-time user data at the individual, product, and aggregate levels through Storr’s dashboards [that are coming soon].
What types of categories should participate in Storr?
Senn: Our goal is to have something for everybody on Storr. We started with apparel and beauty, but we also have consumables, electronics, home goods, and pet brands listed on our site. Rather than thinking about our product categories in verticals like traditional eCommerce, we want to orient our merchandising around different passions, like cooking and photography. At the end of the day, the content is coming from our users. We have to design for people-first commerce.
We also have a great customer experience department that is getting on the phone with our users to better understand what they want. We’ve decided to roll out “request a brand” and polling features to help us identify new brands to recruit to Storr. Ultimately, our people will teach us how to build the platform.
Crown: While Storr enables consumers to discover and learn about emerging brands, it can also help our users rediscover products from more established and trusted brands that may have flown under the radar or been forgotten. To that point, we advise our users to evaluate their Storr catalog and be selective as to which items they list on their store. If a user makes a brand’s entire product catalog available on Storr, users will tune them out. Storr is commerce as content and enables people to monetize expertise. For consumables in particular, we find that the brands and products that are best suited for Storr are those that appeal to someone who is entering a new life stage and needs help cutting through all of the noise via trusted recommendations.
What are your future plans for Storr?
Senn: Our immediate goal is to open it up to everyone; Storr is not reserved for a select group of people. We think we can make that happen in early Q2 and already have a waitlist of more than 33,300 Storr owners waiting to go live. We’re also honing in on brand acquisition, expanding the product catalog, and enhancing product discovery tools.
Ultimately, we built Storr to be platform-agnostic. When you add an item to your Storr profile, it is also added to your Web store. Though all of the curation is handled through your mobile phone, your vanity link makes your store transactional on other social platforms like Facebook, Instagram, and Twitter. Storr is meant to be complementary to other platforms; we’re not trying to change the entry point. But rather than linking a product on Instagram to Nordstrom, for example, why not link it to your own Storr page? Longer term, this means our marketing team is thinking about how to distribute educational materials through social media to help our users be successful social marketers and entrepreneurs.
We can’t talk about the future of commerce without mentioning Amazon. As of late, the retailer is now allowing certain social media influencers to open their own storefronts on its website. How is Storr positioning against Amazon’s moves into the social commerce space?
Storefront Created Through the Amazon Influencer Program
Senn: Amazon is a wonderful company in so many ways, but, from our standpoint, what is not good about this effort is that all of the storefronts that they are creating for their influencer partners are connected with Amazon. We’re strategically named “Storr” because we want to help people monetize their individual brand. You’ll notice that there’s limited Storr branding on our app; instead the experience is about the person. Beyond that, Amazon is focused on protecting its own margins as a retailer. If you are an Amazon Affiliate, for example, you only earn a 4%-6% commission on the products that you recommend. We are differentiated from Amazon because the incentive for Storr users is much higher at 10%-30% commission. At the end of the day, user-generated content is key. Consumers are smart, so they know when content is created by an individual or by a brand for an individual. Ultimately, Storr is a platform that is rooted in authenticity.
For more information, please contact:
Meaghan Werle, Principal Analyst