As a newcomer to the Bay Area and over the weeks, I have met many start-ups at different stages of their development. I’ve found that in this data revolution, business have shifted the way they leverage data — no matter the industry.
Let’s have a look at the food industry.
Instacart is an app that offers grocery delivery service within a two-hour slot selected by the customer, the team delivers products on behalf of some of the world’s largest retailers. And Zesty, another food-tech business, delivers meals for employees of large companies in San Francisco in real time. Some fundamental data tracked by Zesty is knowing where the food is and which meals are ordered with specific dietary requests. Tracking each customized order and delivering within the specified time is a huge data management feat — no wonder they each have several PhDs in data analytics on their teams. Continued improvement in business operations and customer satisfaction depend on efficient data management.
In the cosmetics industry…
Ipsy is a subscription service ($10/month) that sends “glam bags” full of samples of different skincare, makeup and fragrance brands. The platform was created with Michelle Pham, the YouTube sensation known for her beauty tutorials with millions of views. Customers are encouraged to be like Michelle, and share on their social networks what they received in their kit and what products they are most excited about. Customers can also buy the products that they love in full size on the site. Through these sales and reviewing product feedback on social, Ipsy understands better what pleases customers, and is used to determine what will go in the next month’s “glam bag”.
In California, Curology has started a small skincare revolution for acne-prone skin. Its subscription model ($20/month) allows customers to receive a prescription from a dermatologist with whom they had a chat on the site, and receive products for their specific skin needs. The collected data (including skin pictures) allows a personalized customer follow up, which is the dream of many leading brands.
And what about the fashion industry?
Le Tote, another subscription model ($49/month), sends a customized box of clothing to the customer each month after collecting some initial data such as their clothing sizes and their style described with visual boards and words while creating the account. Once the customer starts receiving boxes, Le Tote notes what they liked or not among the 5 clothes sent in the box. Another huge value add: the customer can wear and return clothes without worrying about cleaning when they want a new shipment. The more they receive clothes, the better the algorithm refines shipments and can also give feedbacks to partners about the clothes: patterns, color, quality of the material. Finally, if a customer loves a dress or jacket, she can buy it with a discount.
These companies already generate revenues, and investments walk on two legs:
– Physical: Zesty deals with equipment for meals in one room, Curology sends skincare bottles, Le Tote has a warehouse with thousands of tops and jackets and is one of the biggest laundry service in California. Instacart relies on shoppers who choose your apples and avocados very carefully.
– Algorithms and machine learning: data analytics for trends and “patterns” and better serve the customers in real time, some parts are automated, others require the “human touch”, from the personal shopper to the “in house” stylist.
And of course, the companies also have a community — content on social networks generated by users, instagram posts, video testimonials, enthusiastic tweets, are part of the DNA of each brand and its aura.
Customer feedback and interaction allows growing start ups to convert conversations into “insights”, and applying those insights generates greater value for products and services.
It is under way: Le Tote is proud to be defined as “the fashion Netflix” by journalists, Instacart is presented by some as the future Uber for grocery and food, Ipsy brings together millions of women engaged in its beauty community. All come from a tech culture, are based in the Silicon Valley, and think global.
They have a new marketing intelligence.
Just think, we can apply data disruption to most of our industries. Recently it was stated that Fintech startups would kill banks. Now we talk more about the arrival of new financial services, delivering a service for customers who were not the top priority for large financial institutions. The list goes on.
Starting the conversation ahead with startups and VCs that support them can only have a positive impact: watch your market with a new perspective, identify talent and skills, understand “data intelligence ” you could need in the coming period (from analysis to exploration), consider possible acquisitions one day to go faster.
By doing so, you continue to move forward and develop your business.
About Odile: Odile is an Advisor in Residence with Next World Capital, working with the firm’s portfolio companies as they expand into international leaders.
Odile was most recently the Chief Strategy and Data Officer at Orange (a leading $40 billion + market cap French telco in 30 EMEA markets with 350 million customers), where she reported to the CEO. She previously served as SVP of Brand and Communications and SVP of Marketing for the company. Before entering the technology and telecommunications field, Odile spent a large part of her career with major brands in the field of beauty and luxury as an executive with L’Oréal, Yves Saint Laurent and Bourjois (groupe Chanel). While with L’Oréal, she managed the Lancôme brand in France and the United States and became Managing Director / President of Lancôme International in 2006 (#1 worldwide cosmetic brand in luxury retail).