The Valley has been having an existential crisis for a while. I think it's due to the gap between content and commerce, which are still somewhat like The Presidio and Marin County before they were connected by the Golden Gate Bridge. Thankfully, what's starting to happen is that people are building this much-needed bridge. But not from one side to another. Both sides are working at it. Content and commerce are progressively coming closer to their halfway point of junction.
On one side you have commerce. Traditional sites like Amazon and eBay dominate the market and are making a lot of money. They're not the cause of the crisis because profit is what really matters to shareholders of a business. But they only attract people of a particular mindset. When you go to Amazon or eBay, you're not hanging out, hungry to discover the coolest content on the Internet, and you're not really enjoying the shopping experience. You're there for utilitarian reasons. You're going to be in and out, to sell milk and buy your chickens. This is pure commerce. And now, suddenly, you have sites like Fancy and Wanelo earning their seats at the king's table. They're growing fast because they show you exciting things on a beautiful and social interface, but they don't stop there of course. They allow you to buy what you see, just like the outdated titans we just spoke of. And it's no surprise that Fancy's stated goal is to become the next Amazon.
On the other side you have content. And this is really where the crisis was born. Think of Facebook, Twitter, Pinterest, and Instagram to name a few. Also Silicon Valley leaders, but they have a much harder time monetizing and justifying their tremendous valuations. They're addictive, and they have all these eyes on them. Hundreds of millions of them. Staring. All the time. And fingers. Typing away, clicking, uploading. Always. Facebook and Twitter of course have been taking initiatives to make money. They've been working with businesses. Brands have fought very hard and spent millions of dollars to get those millions of fans, but marketers are still not sure today about whether that's a good idea.
Why? Put yourself in their situation. You are now the owner of a page with millions of followers. So you post items that are for sale on your site, and even though you're pleased to see them get thousands of likes and hundreds of comments, these impressive metrics don't convert to actual sales.
This is where I think there's an opportunity. Facebook has tried many ways to become a leading commerce platform, and it hasn't succeeded yet. Sites like Shopify have integrated quite well along with a bunch of e-commerce apps that allow you to visit virtual stores on Facebook. But that's still not direct conversion from posts to sales.
There's a way to be even more seamless. When you see the beautiful thing that you want to buy, why do you have to leave that page at all? Why can't you just buy it there? I see it, I want it. Now! It's a shopper's dream in which all of the content becomes instantaneously purchasable.
That's where companies like StoreTok come into play. StoreTok is a startup that I'm working on with Abhi Ramesh and Vinny Pujji, two friends from Wharton. And I argue that it presents a very viable solution to this existential crisis we've talked about, because StoreTok allows you to purchase in stream, through social media comments. Content and commerce finally meet in that golden halfway sweet spot.
We allow you to buy through comments because we think the current reactions that brands are getting from fans, those hundreds of "OMG"s, "I love it!"s and "So cute!"s mean something. If that's not purchase intention, I don't know what is. These people want to buy, and they probably would buy straight away if they could. So with our product, the merchant chooses a keyword -- "buy" for example, or "gimme" -- and their fans can buy on the spot if they type that keyword as a comment.
And it turns out that when people can do this, social engagement soars two to five times, especially when you're dealing with impulse items, items that appeal to people's emotions, items they crave immediately.
What we think makes this opportunity even bigger is that StoreTok is not only for retailers. Think of all the artists who have millions of views and subscribers on YouTube. Many of them would like to sell directly to their audience. And by allowing them to sell through YouTube comments we're allowing these performers to interact with their fans more directly than ever.
StoreTok is capitalist heaven, but it also happens to work extremely well with charities. The keyword in the comment doesn't have to be "buy!" It can be "donate." What's nice here is that the public nature of the comments allows people to get deserved social recognition for their donations. They're going to get seen by everyone else who sees the post, and the more people donate, the more viral the post will be.
So there you have it. Two sides building towards each other. And the bridge that will come out of this effort will finally allow content to be reconciled with commerce.
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