Since the advent of department stores in the 1850s, retail has been dominated by large channels like Macy’s, Nordstrom and now Amazon. But retail may be in for a major change as a new channel—or potentially millions of new channels—come online this week.
Storr, a San Francisco-based company that launched today, enables anyone to open a store from his/her phone in three clicks. I opened my own store in exactly three clicks and am now the owner of Alpha Male Menswear. I selected styles of apparel from several of the companies that sell men's clothing on Storr and I placed the items in my store for purchase. I also selected a few items that ladies can buy as well to show pictures of additional brands. The process is unbelievably easy.
Now people can buy new, brand-name products directly from their friends or through people they follow. As Millennials and Gen Z continue to seek out more personal and experiential purchasing options, buying new products directly from each other may be the solution.
Brands handle shipping and returns and people make a 15-25% commission instead of traditional retailers earning the commission. It’s free to open a store and people can buy from each other directly within existing channels like Instagram, Twitter, or Facebook as well as on the web and on the Storr app. Sellers can also donate a percentage of their earnings to Storr’s non-profit partners.
Is The Future Of Commerce Buying From People We Know/Admire Instead Of From Retailers?
I interviewed the key executives behind Storr for this article. What follows is a series of discussions about the past, present and future plans of Storr.
“There’s a Robin Hood feel to the platform,” says Eric Senn, founder and CEO. “You can buy new products directly from people you know. The money that would typically go to a company like Amazon or Macy’s now goes to the person you buy it from. And there’s no markup on the products.”
Backed by the former CEO of Neiman Marcus, the former CEO of Macy’s.com, baseball superstar Alex Rodriguez, fashion icon Elyse Walker and David Sacks’ Craft Ventures, Storr signals the decentralization of a $3 trillion global retail market.
“Airbnb and Uber democratized hospitality and transportation by empowering the average person to use their personal assets to generate income. Storr falls into this category too. Anyone with a phone can create a store,” said Senn. “Storr accelerates the transition from centralized, channel-first commerce to decentralized, people-first commerce.”
Using Uber as an example, many analysts believed Uber would fail because consumers were conditioned to call a taxi when they needed a ride. Over a period of time, however, consumers learned a new behavior and embraced Uber. The result? Uber decimated the taxi industry.
I believe Storr has the potential to severely disrupt the retail industry, especially when name brands that sell their products online at Amazon and in retail stores embrace the concept. Brands today sell their products on Amazon and in stores. If Storr begins to generate success similar to Uber, name brands will flock to Storr.
Storr is already working with over 150 brands including Adidas, RE/DONE Denim, Solid&Striped, La Ligne, Jonathan Simkhai, Naadam, HillHouseHome, Spiritual Gangster, Rothy’s, Alex Mill, Pop&Suki, Galvan, DL1961, House of St. Clair, and California Cowboy. Storr will eventually feature thousands of brands in several different verticals—all for anyone to sell.
A brand created by Kathryn Brolin, wife of actor Josh Brolin and who I wrote about in this article, sells her products on Storr.
Note to Avon, Herbalife and other direct sales companies: List your products on Storr and make it mandatory that all of your reps open a store.
Storr raised a $4 million seed round in 2018 and has grown from one full-time employee to 14 in ten months. “I’m a big believer in Storr’s exceptional team and their potential to fill this white space in e-commerce,” said Alex Rodriguez.
Storr was founded in 2017 by cousins, Eric Senn and Jason Senn. Eric has a background in film and media and Jason was on the founding team of Google Analytics.
“We came up with the idea while working with a few professional athletes on a completely different concept,” said Eric Senn. “Some of the athletes we were working with had more followers on social media than the brands they endorsed. So, we asked one of the athletes why he didn’t have a store and he said ‘I’d love to have a store but I can’t build it, I don’t want to manage it, and I don’t want to invest any money in it.’”
“We did a deep dive on how retail has evolved over the past 150 years and found that historically consumers have purchased from these large, rigid, impersonal channels. But a lot of these channels had humble beginnings and were named after an individual the consumer had a relationship with and trusted, like Rowland Macy (Macy’s) or Richard Stack (Dick’s Sporting Goods),” said Senn.
Retail wasn’t always impersonal. Dick’s Sporting Goods started as a single store fishing and tackle shop in Binghamton, New York. People presumably went to the original Dick’s because Dick knew fishing and tackle. There was a personal interaction that took place and that experience was important to the consumer.
Dick became so successful that he opened a second store, then a third, and so on, and he couldn’t provide that personal experience to consumers across all his stores.
“When the internet came online and e-commerce was invented, naturally we saw these large retailers move into online distribution, which made retail even more impersonal. Now, people are saying the future of retail is to continue down this path of impersonalization, that buying from bots is retail 3.0. We completely disagree,” said Jason Senn.
“Ninety-two percent of all product recommendations come from friends and family or people we know, continued Senn. “There are literally hundreds of millions of untapped channels that are more influential and more trusted than brands’ existing channels when it comes to recommending products.”
“There is a massive opportunity to use technology to make these trusted channels transactional, to empower anyone—regardless of whether you have 100 followers or 100 million—to become a retailer,” says Evelyn Cordner, head of engineering at Storr.
“If we can do that, we can bring the personal, trusted experience people get at a farmer’s market to online retail,” Cordner added. “We can empower anyone to monetize their expertise, passions, and personal brand in an easy and authentic way. We can not only democratize retail, we can humanize it again.”
Scott Zalaznik, SVP of digital at Adidas said, “Adidas is the creator sports brand. We’ve always found inspiration in the creative community. Our strategy going forward is to democratize creativity, to empower creators to make an even bigger impact and make sure they have tools like Storr to create the new.”
“The brands we have on board are really forward-thinking,” says Torie Crown, head of business development, “In a world where Facebook and Instagram ads are increasingly expensive and less effective, brands see Storr as a new opportunity to connect with the customers who genuinely love their products.”
“Storr is a win for everyone,” continued Crown, “We enable brands to distribute through millions of organic micro-channels at higher margins with authentic, user-generated marketing content that brands don’t pay for until the point of sale. And brands have full control over pricing and user commissions.”
“On the consumer side, Storr cuts through the noise—people buy from people they know, people they trust, and people they’re inspired by, not an over-merchandised or overwhelming retailer,” added Crown. “On Storr, you’re not even really being sold to, you’re being referred to, and referred customers are more loyal and have a higher average order value than customers from paid ads.”
“We saw an opportunity to create a better experience for both consumers and brands while redistributing what could be hundreds of millions of dollars to people and cause without charging consumers more. That’s why we’re here,” added Eric Senn.
Storr launched to a limited number of sellers today. Consumers can download the app from the Apple App Store or from Google Play. Storr will be adding more users from the waitlist in the coming weeks and will open the platform to anyone in one to two months.
Conclusion
Storr is a refreshing and interesting business model. If consumers are willing to learn a new behavior when it comes to shopping, and if consumers embrace Storr, I believe the company will be very successful. The unknown at this time is how quickly will major brands want to their products available on Storr? I believe the answer is soon—really soon.
The next big thing in retail may have just arrived.
