Changes in consumer buying behaviors mean that brands can no longer rely on selling through a single channel.
For traditional and e-commerce retailers looking for new ways to connect and engage with consumers, Lucky believes its approach allows them to work together to not only achieve that goal, but also provide consumers with a better shopping experience.
The 1-year-old company was founded by Sneh Parmar, who has a background in consumer buying behavior, and Nafis Azad, whose background is in UX software and product development.
Parmar was shopping online for a certain brand of charcoal toothpaste and waited a week to receive the package. As he told his friends about it, they told him that he could actually find it at Target.
“That’s when the light went on: why am I shopping online and paying for shipping when I can walk two blocks to Target?” she added. “Nafis and I started trying to understand the relationship between retailers and brands, which are still competing with each other.”
Their goal was to create something on top of the infrastructure of retailers so that there is full transparency of inventory in a retail store, essentially optimizing the “big box” concept for everyone, “to be where the customer is and provide a seamless experience.” hybrid purchase. Parmar said.
Now a team of six, Lucky’s first product is a plug-and-play API, also available on the Shopify App Store, that integrates in minutes with major retailers (it’s already working with Nordstrom and Sephora) so eCommerce businesses can gain visibility into store shelf inventory and offer local fulfillment options. For example, when someone orders a product online, Lucky will see if it’s available at a local retailer and give the customer the option to ship it or pick it up in store.
As noted, Lucky is also using data to bridge the gap between brands and retailers, providing data-driven insights into real-time inventory distribution, discovery, and how to market brands in-store.
The company is already working with 10 brands, including men’s skincare and cosmetics company Stryx, where Lucky is integrated into more than 10 of its SKUs.
After Parmar and Azad launched a beta pilot in the fourth quarter of last year, they saw a 10% engagement rate from consumers using Lucky. They wanted to scale through national distribution and, after securing partnerships with Nordstrom and Sephora, they now have access to thousands of brands to be Lucky customers, but to achieve that scale they would need to raise capital.
Lucky recently closed with $3 million in a seed round led by Unusual Ventures, with the participation of Plug and Play Ventures and a group of angel investors including Sara Du of Alloy, Kyle Wong of Pixlee, Kyle Schroeder of Cremo and the player from the NBA Wesley Matthews.
The new funding will allow Lucky to develop its team in the engineering, product and sales aspects, Azad said. The company is looking to increase the workforce to 10 in the next two quarters and bring in around seven new retailers by the end of the year. It’s also planning some new features, including a better store locator and expanding inventory tools and fulfillment options.
Meanwhile, Rachel Star, head of Unusual Ventures, understood what Lucky was up to, having worked for Nordstrom on the corporate side herself. She noted that retail traffic has been declining for about five years, and the opportunity to draw people into a store, whether they ordered an item online or walked by, provides significant brand flair.
“When you think about eight years ago when direct-to-consumer brands really started, it was a one-on-one relationship with consumers, but scaling became a challenge, a lot of retail stores opened,” Star added. “Stores like Nordstrom and Sephora they already act as aggregation points, so when brands partner with retailers for network density, it gives traffic to those retailers. Even when they return something, people usually buy something new. It is a great combination where the needs of both sides can be met.”
Azad mentioned that Ulta placed products at Target as a way to gain density, and when I saw that men’s skincare brand Lumin, which was exclusively DTC, launched last month at Target and Walmart, I asked the general manager Kevin O’Connell why Lumin felt he had one also warranted a physical presence in stores.
He explained that having items in a physical store “made a lot of sense” for the company’s growth strategy, though he said the company was not slowing down its online business. Lumin surveyed customers and found that it was convenient for them to buy products while they were already shopping.
“We have been tracking our consistent year-over-year growth for the past two years and have spent a lot of time analyzing the data that showed customers in the men’s skincare market are making these purchases more frequently. frequently at larger retailers, specifically Target and Walmart. O’Connell added. “And, of course, partnering with familiar names like Target and Walmart gives us a valuable opportunity to further develop our brand and expand its reach to new customers who are active in-store shoppers who may not have been aware of their online presence before. .”