Chad Dickerson (Photo: John Herren via CrunchBase)

Etsy had its best year ever. On the Brooklyn-based company’s blog, CEO Chad Dickerson wrote that overall 2012 community sales grew 70.3 percent year over year, to $895.1 million, up from $525.6 million in 2011. In 2012, new buyers increased by 83 percent. Ten million new members joined last year—almost doubling the total number of members to 22 million. And to top it off, it eight-year-old company only launched its iPad and Android apps about two months ago.

WebProNews

Etsy’s Android app

Brooklyn-based Etsy launched a new Android app allowing buyers to purchase items on mobile devices. According to VentureBeat, the app lets customers peruse over 17 million products from 800,000 sellers worldwide–in multiple languages. The Android release follows Etsy’s iPad and iPhone apps.

VentureBeat

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Etsy, the startup headquartered in Brooklyn, is considering making a change to their policies to keep members of their community around longer. According to Wired, some of the changes in the policies include a proprietary payment system that works better on mobile, revisions to seller policies, and offering the option of integrating into the mainstream retail field. This will include a pilot program and selling certain Etsy goods at West Elm, a home design chain. Throughout all of these changes, people are worried about Etsy losing its unique feel.

Changes in the works are focused on keeping successful sellers on the site. The “community standards” on Etsy are vague, but the company plans to devote more time to judgment calls and resolutions to seller issues.

Matthew Stinchcomb, the company’s VP, said, “As we get bigger and have more awareness, that helps every seller. If we want to try to do something like change the economy, that takes scale.” Despite this reassurance, there are plenty of Etsy sellers who are worried about the policy changes on the site. Though there are sellers who are also encouraging of the changes. Dickerson has noted that although not all sellers will support the changes, the site is moving in a new direction and wants to encourage its sellers to grow.

Wired

Techli

English: Thrillist’s logo (Photo credit: Wikipedia)

The NY based men’s digital lifestyle magazine Thrillist has an e-newsletter, a mobile app, a local deals provider and a shopping recommender. CEO of Thrillist, Ben Lerer, spoke with AdExchanger about how Thrillist has combined editorial and shopping into one package. The company is also currently working on a new product called ThrillSeeker which packages data.

Lerer explained more about this new addition to Thrillist when he said, “We’ve created a product here called ThrillSeeker, where we take our first party app data from Thrillist, and in some cases from JackThreads and all the information about this audience and we provide advertisers with an ability to retarget our guys on other platforms. To expand the reach of what we do to more guys beyond the exact Thrillist target consumer, or to go in and re-message — that’s a product that we’ve started rolling out with success.”

Lerer explained the Thrillist marketing strategy when he said, “There’s a fundamental belief that we have about content and commerce living in one place that brings those properties together. It reflects the fact that a reader and a buyer are exactly the same thing. Traditionally, media companies look at a reader and simply aim to monetize them through advertising sales. In being committed to that relationship, traditional media companies have developed a good sense of how to build loyalty and create an emotional connection between brands and readers.”

AdExchanger

English: Thrillist’s logo (Photo credit: Wikipedia)

The newsletter/e-commerce company Thrillest has recently secured $13M in Series A funding led by Fred Harman’s Oak Investment Partners, Lerer Ventures and Bob Pittman’s Pilot Group. Thrillest was founded by Ben Lerer, son of Huffington Post’s chairman and co-founder Ken Lerer, and the company started out as a “daily candy newsletter for dudes,” according to AllThingsD. Thrillest has now expanded into e-commerce after acquiring Jackthreads, a Gilt Group for dudes, and Lerer says the company is on track to make a profit of $60M in revenue this year.

In an interview at PandoMonthly, Ben Lerer talked about how despite New York’s rising tech scene, it still has a ways to go before catching up to Silicon Valley. Lerer explained that the biggest problem in NY is late stage capital and lack of billion dollar tech companies. NY investors want to wait until the risk is taken away before funding a company, but Lerer added that NY’s angel investment scene is strong.

AllThingsD

Lucky (magazine) (Photo credit: Wikipedia)

The online magazine Lucky will be introducing a shopping site called myLucky.com that directs readers to buy clothing and accessories directly from more than a dozen retailers. Instead of directing shoppers to store sites, users can now stay on the myLucky.com site to make purchases from their shopping cart. Shoppers can also click on mylucky versions of particular Web sites like Macy‘s that features a narrower list of merchandise organized by Lucky editors.

Brandon Holley, Lucky editor in chief, told the New York Times that, “What we are trying to do is give them the world of options. She needs choice. She needs diversity.” This magazine is the latest to look at e-commerce to save its revenue. Lucky advertising pages revenue declined by 15%, down to $29 million from $34 million the same time last year. Holley hopes that the new shopping component will be a bigger part of revenue in the future, and the magazine is already creating revenue-sharing relationships with specific retailers. Lucky expects to get about 3% to 15% of each sale.

The New York Times

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Many small companies in NY are testing out subscription commerce. Early Bird Foods in Brooklyn recently decided to sell one of their bags of olive-oil tinged granola in a Foodzie shipment to about 2,800 customers. Foodzie, a SF-based company, sells monthly subscriptions for its small-batch artisanal food, and wanted to include Early Bird on its shipment. Early Bird agreed, and since then has seen a 30% increase in online sales, according to Crain’s New York Business.

Early Bird is a three-year-old company that had $250,000 in revenue in 2011. Nikisia Davis, owner and founder of Early Bird said, “I only know this through many, many people telling me they received the box. Foodzie markets to people who buy specialty food already—they’ll buy a $9 bag of granola and not blink—and that’s the customer base I’m looking for.” Davis also said she would do a deal like this again. Early Bird is just one of many small companies in NY testing out subscription commerce (subcom), a rapidly growing section of the $200 billion e-commerce market.

Elizabeth Stein, CEO of the three-employee Purely Elizabeth, a Manhattan-based organic, gluten-free food line she founded in 2009, told Crain’s NY that she has seen drastic increase in repeat customers online since she included her cereal samples in an October box from Blissmo, which appeals to shoppers searching for eco-friendly products. “So many people are reluctant to try something new. But this is about giving them an easy trial, and hopefully then they become loyal customers.” Purely Elizabeth has revenues of less than $10 million.

Crain’s New York Business

Currently one thousand or so merchants make their wares available to more than 1 million registered members, growing at the rate of 10,000 a day. In May Barneys.com and YSL.com added “fancy” buttons on all their merchandise. According to Forbes, as opposed to sites like Google or Amazon, which made their success by giving users exactly what they search for, Fancy’s user-curated photos and shopping opportunities via accidental discovery have created a new retail model.

Forbes.com

According to GigaOm, after analyzing each consumer’s behavior (anonymously of course), Custora gives clients infographics, such as “how much should we spend to acquire a customer.” It then lets clients segment consumers based on their purchasing classification and predicted future purchasing pattern. Instead of generating “batch and blast” emails dependent on their purchasing category, the software looks at each person’s unique shopping habits and tailors messages specific to their circumstance.

While other companies might compete with Custora in different parts of its analytics business, Corey Pierson, co-founder of Custora, told GigaOm that no other company operates across as much of the consumer experience spectrum or provides the same level of CLV insights.

GigaOm

It is unclear how the e-commerce effort will do, but according to Portfolio.com, the featured artists are given a cut of the sales, suggesting a quick easy way for artists to earn some extra cash, as well as a perceived large amount of sales to fund the company itself.

Portfolio.com

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Gov. Chris Christie  announced recently that Amazon will be building two warehouses in New Jersey and will start collecting state sales tax next summer. According to The New York Times, the warehouses will be around a million square feet each, and will provide 1,500 full-time jobs. Amazon, which is based in Seattle, made an agreement with New Jersey to collect seven percent sales tax on orders from state residents by July of 2013.

Online retailers located in-state feel as though they are at a disadvantage because out-of-state retailers do not have to charge sales tax. Christie estimated that the revenue for the state would amount to an additional $30 to $40 million a year. The location for the warehouses has not yet been decided on, though their estimated cost is around $130 million.

John Holub, president of New Jersey Retailers Association told the NYTimes that, “We’re very pleased with the deal. We now have a definite date when Amazon will begin to collect tax.”

The New York Times

Not even a year old, Fab’s sales revenue has surpassed $300,000 a day. It’s 3.5 million registered customers have racked up an estimated $100 million in annual sales. Fab recently acquired a German startup and is adding new product lines like apparel and food. Shellhammer says that their superior design sense and broad product coverage gives them a competitive advantage and, Forbes notes, it’s not selling overstock like Gilt.

Forbes

Zheng believes her company is a more efficient shopping stop for those who don’t have time to visit physical secondhand stores.  “I love vintage, but you really have to search hard before finding that one treasure, that one consignment piece,” said Zheng.  And for individuals who want to sell items, the setup favors a larger profit than a thrift store or consignment shop.

Later this spring, Material WRLD will launch an iPhone app and will feature 100 handpicked sellers.  Zheng pulls inspiration from other startups in her arena.  “I definitely think the fellow entrepreneurs in our class—Birchbox and BaubleBar—played a big role in my interest in entrepreneurship, and my comfort in being able to leave a very sexy, glamorous, solid corporate job,” Zheng said to Xconomy.

Xconomy

Nordstrom

The department store generates $10 billion in annual sales, compared to Bonobos’ $1 million. Nordstrom was originally interested in a simple distribution deal with the brand. But Jamie F. Nordstrom, the great-grandson of the company’s founder, was impressed with Bonobo’s email strategies. They charmed customers with customized emails that included links to appealing YouTube videos that were unrelated to merchandise.

“We certainly thought: there’s a way we can help them and they can help us,” Nordstrom told the New York Times. In the past few years, the giant retailer has reconfigured its site and is aggressively looking to expand its online presence. During the next five years, the company plans to spend nearly $1 billion—about 30 percent of its capital expenditures—on increasing its e-commerce.

The New York Times

Time Out New York additionally will be adding restaurant reservations through a partnership with Open Table, according to paidContent. 

paidContent

Pets.com sock puppet (Photo credit: niallkennedy)

Selling pet food online used to be a costly affair.  Just ask the long defunct Pets.com  E-commerce has since changed and Manhattan-based PetFlow.com, established in 2010, is capturing its share of the online pet food sale market.

Pet food remains expensive to ship, but unlike the late 90s when Pets.com was founded, starting PetFlow.com was much less expensive as startup costs have greatly declined — three to five times cheaper compared to a decade ago.  Cloud-based services remove the need for a dedicated server which also saves the company money.

Alex Zhardanovsky, co-founder of PetFlow.com says to The Wall Street Journal that 50 to 60 percent of his customers automatically receive their pet food on a regular basis.  “It’s one of the only industries that lends itself to a subscription-based delivery system,” said Zhardanovsky when referring to the regimented eating schedule of pets.

PetFlow.com has a greater consumer base too.  Only 1.2 percent of overall commerce was conducted online compared to 7.2 percent today.

The Wall Street Journal

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Gilt Groupe CEO Kevin Ryan argues that bricks-and-mortar retail shops are severely threatened by Amazon and other online-only retailers, telling The Economist that he sees “no evidence that there are big opportunities for traditional retailers in online retail.” Retail sales in America are relatively stagnant, so the double-digit growth of online sellers is coming at the expense of physical shops, The Economist notes.

Physical stores are likely to shrink as the share of sales made online continues to rapidly increase. Retailers in America have a surfeit of space. According to The Economist, between 1999 and 2009 the amount of shopping space per person rose from 18 square feet to 23 square feet. The productivity of that commercial acreage slumped after the financial crisis and no sign of recovering are palpable. The retailers who will survive the drift online are the ones “listening to the dynamic demands of customers,” Walmart’s operator of online business Joel Anderson told The Economist.

Some shopkeepers realize that they must make the most of their tactile benefits over online rivals, and that to do so they must make their stores more enjoyable places to visit, according to The Economist.  For example, Macy’s says it is investing about $400m in the renovation of its flagship store on Herald Square in NY. It will add another 100,000 square feet, part of which will become the largest women’s shoe department in the world.

The Economist

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New Jersey-based retailers are lobbying state legislators to pass a law requiring out-of-state businesses to collect a 7% sales tax from New Jersey customers.  The New Jersey Retail Merchants Association and the local affiliate of the Alliance for Main Street Fairness are also pressing lawmakers to reject Amazon.com’s request for a 22-month exemption from NJ taxes in exchange for building two distribution centers and adding a possible 1,500 jobs.

Dan Schwartz, president of Karl’s Appliance, told Dealerscope that the proposed Amazon deal is a quid pro quo that is an “insult to injury.”  He said that customers want retailers to match Internet prices—which does not include a 7 percent tax.

Dealerscope

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Quidsi, a New Jersey-based Amazon.com subsidiary bought in November 2010 for $500 million, is launching a new website called Casa.com, which will sell 35,000 home goods ranging from kitchenware to bedding. The company grew to success through its online retail sites Diapers.com, Soap.com and Wag.com, which sold diapers toiletries and pet food, respectively.

As per usual, the new site will target the “busy mom” and will market heavily on the convenience it offers, which includes free 2-day shipping on orders over $49 and a 1-yr return policy on its products.

Marc Lore, CEO of Quidsi, said to The Wall Street Journal that  the company is also working on various other websites that it plans to launch in the next year.

Wall Street Journal

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Hearst Magazines will make its Kindle Fire publications shoppable by linking products to Amazon. Hearst did not disclose what percentage it would receive from the sales, but John Loughlin, general manager at Hearst Magazines, said to Adweek that the click through rate is high and most of the products they feature are available through Amazon

Though some warn that magazines with overlapping editorial and advertising run the risk of appearing beholden to companies and the stores that sell products, David Carey, Hearst Magazine president, said his company has increasing competition from sites like Net-A-Porter and Gilt Groupe that blend content with commerce. He told Adweek that, “we want to make sure our business models are as nimble as possible.”

Adweek

In their first year, Fab expects to make more than $100 million in revenue. According to PandoDaily, Fab isn’t an e-tailer; co-founders Jason Goldberg and Bradford Shellhammer have created a site full of beauty, color and style.

They told PandoDaily that instead of making decisions around what sold well, they trusted their instincts and followed what they loved, figuring that if they liked it, their shoppers would also.

When Goldberg interviewed a Valley-based recruit for a job, he talked about how the data should be laid out on the page and called the product placements ads. The two ended up fighting.

Goldberg said they weren’t ads—they were editorials. Instead of trying to make shoppers buy things, they are guiding them through a story.

PandoDaily

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Amazon is in talks with New Jersey about a deal to locate two warehouses there. The deal could mean 1,500 new jobs for the area. State Assembly Democratic Leader Lou Greenwald, told the Associated Press that Amazon wants a 22-month holiday from sales taxes. Unlike brick and mortar establishments, Amazon is not required to collect sales tax, but if they open a warehouse in New Jersey, the online retailer will have to pay taxes. The law requires online merchants to collect sales tax if they have a physical presence in the state.

After the proposed exemption ends, New Jersey stands to collect more than $200 million a year in sales taxes. The jobs created would pay an estimated $40,000 to $50,000 with health benefits.

Sen. Ray Lesniak opposes giving the company a tax break, saying it is a bad deal for New Jersey. The state would give up millions in revenues while also putting jobs at risk in established retail centers and central business districts. He is sponsoring a bill requiring companies to collect sales tax. He said Amazon can partake of other New Jersey business incentive plans.

Greenwald said to the AP that Amazon would prefer to forego the incentives in exchange for a tax break.

John Holub, president of the New Jersey Retail Merchants Association, demanded a level playing filed. He said that while Amazon can compete on price, they shouldn’t break the law and not collect sales tax.

No legislative votes have been scheduled on the deal.

Associated Press

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The NY-based e-commerce site Totsy holds “flash sales” of merchandise for parents and children. According to Xconomy, since late 2010, the company’s revenues have risen 3,000 percent and the number of brands on their site has gone from 96 to 500.

CEO Guillaume Gauthereau said that they initially targeted mothers, with a 70 to 80 percent concentration on apparel. Through their relationship with VC firm DFJ Gotham Ventures, Totsy works with other companies like StellaService, which benchmarks consumer service practices. They also use SailThru, an e-mail marketing platform that reacts to behavior.

Daniel Shultz, co-founder of DFJ Gotham, is on Totsy’s board of directors and an advisor to Gauthereau. He told Xconomy that his firm not only invests in sites like Totsy but also e-commerce infrastructure and that enhance the performance of sites and create better customer conversion. His firm is also looking for companies that can aggregate and package large amounts of consumer data.

Shultz said that they funded Totsy because the flash sales idea was unique and liked the idea of selling to moms and kids. In that space, Shultz said the returns are minimal. If something doesn’t fit quite right, moms figure their child will just grow into it.

In 2010, Totsy raised $5 million in Series A funding from Rho Ventures and DFJ Gotham Ventures. Sources say it’s currently raising additional funding.

Xconomy

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You receive some holiday gifts this year that aren’t quite your style. What do you do? Smile graciously and keep them hidden in your closet? Regift them? Marsha Collier, author of “eBay for Dummies” has a better, money-making idea — sell them on eBay.

“When you get a holiday gift, question whether you can use it or want to sell it and get what you can, because something is better than nothing in this economy,” Collier told NY Daily News. 

The process of being a seller on eBay is rather simple. On eBay.com, users set up a seller account and a PayPal account using a credit card or debit card, describe the item, choose a selling option (auction or fixed price) and that’s it. The eBay site is user-friendly, especially for first-timers, and includes an “eBay University Learning Center” to clarify any looming doubts or questions, the New York Daily News indicates.

If eBay is not an appropriate option, a recent article in SF Gate also mentions online swap shops that  have  emerged. Many of these, such as Swaptree, provide a market where individuals can swap books, CDs, DVDs and video games. Barter Place is an example of a site that offers a more open market place, and a platform from which you can exchange as well as sell. The article also offers another option, though perhaps not as lucrative – recycle undesirable gifts for next year, which is also environmentally friendly

New York Daily News

SF Gate

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Online retailers are causing competition for brick-and-mortar stores by aggressively promoting mobile-only discounts designed to lure customers away from Back Friday bargains, according to Forbes. 

Gilt.com began luring in customers at 6 am today via mobile exclusives. Due to mobile, the Gilt Groupe now expects its best Black Friday ever as Andy Page, president of the Gilt Groupe, told The New York Times. Amazon.com shoppers can already find discounts online at the Black Friday Deals Store, Forbes notes, while retailers such as JCPenney, American Eagle,Target, and Kohl’s, too, are using apps to reel customers in.

Whoever can provide the best experience for customers will come out on top in the ‘mobile wars,’ but, as Forbes contends, the true winners will be the retailers who use technology to effectively connect to the empowered consumer. A completely unique customer experience, with engaging offers that analyze and integrate data based on location, past purchase history and behavior analytics, will be the ultimate retailer’s method this holiday season.

Forbes

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Yesterday Ebay announced that it will be acquiring NY-based startup Hunch for approximately $80 million. The company, which was founded by Chris Dixon, Caterina Fake, Tom Pinckney and Matt Gattis, is an Internet intelligence system that takes a user’s interests and tastes on a particular topic and makes recommendations based on those answers. Since its founding in 2008, the firm has raised almost $20 million.

According to Uncrunched, Ebay plans on making Dixon the head of its 50 person recommendations team in a new office in NY, with the goal of using Hunch and Dixon’s expertise to ameliorate its existing e-commerce data and grow the team to about 200 employees. In addition, Ebay plans on using the team to analyze aspects of its data, such as purchase and sale information.

Uncrunched

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Online shopping has been a phenomenon for consumers who prefer to sift through organized webpages as opposed to piles of disorganized clothing from the comfort of their own homes. Bonobos, a NY-based startup which launched in 2007 with its own brand of pants for men, began partnering with brands sharing similar tastes a few years later. Today, the website carries over 75 brands, its own label, and has secured $18.5 million in a round of financing from Lightspeed Venture Partners and Accel Partners in December, according to Forbes.

The men’s retail website knows that men need guidance when it comes to fashion and their wardrobes.  “Guys like personalized shopping,” CEO Andy Dunn told Forbes. “They liked, in the old days, having the tailor around the corner who would tell them exactly what to wear and when. Guys don’t know what looks good; they don’t know who to trust. So we need to establish trust.”

According to Forbes, Bonobos, and similar businesses have all capitalized on the stereotypical male’s reluctance to shop, enabling men to purchase all the merchandise they want, without ever having to step foot in a store or leave their office chairs.

Forbes

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Chicago-based GrubHub Inc. has bought NY-based Dotmenu with the $50 million it received in venture capital financing. According to Chicago Business Matt Maloney, GrubHub’s CEO, stated “We are buying the [Dotmenu] because they are experts in college communities.” Combined, the two companies will have the largest number of restaurant listings, with more than 250,000.

Chicago Business

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NY startup Sailthru, which personalizes and recommends web content, has raised an $8 million Series A round, led by RRE Ventures. The start up uses Javascript to track what users do and read on sites, keeping users engaged through personal email newsletters and recommendations on the site. Also participating in the round was AOL Ventures, DFJ Gotham Ventures, Hatteras Funds, Lerer Ventures, Pilot Group, and Thrive Capital.

Currently its tools are used by more than 80 publishers and e-commerce sites. The financing will be used to double Sailthru’s staff to 60.

Business Insider