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Lot18 exec: 25pc of revenue comes from mobile

May 21, 2012

The Lot18 iPhone app

NEW YORK – A Lot18 executive said that since rolling out a mobile site and iPhone application over the past year, the membership-only Web site has seen an uptick in both revenue and traffic generated from mobile.

Last week, Seamless hosted the “Hungry? Thirsty? Get some!” panel in conjunction with Internet Week, where executives from Etsy, Seamless and Lot18 spoke about how digital is changing the ways that traditional ecommerce Web sites operate. The session was moderated by Jessi Hempel, senior writer at Fortune magazine, New York.

“Wine is a social product, and our mobile experience is good if you just want to buy because it is transactional,” said Philip James, president/cofounder of Lot18, New York.

“But what we don’t do well yet is take the inherent nature of social to tie back to a service we can provide,” he said.

Digital drinks
Lot18 is a curated Web site that works with wineries to find deals on gourmet wine and foods.

The company works with a select number of vendors, claiming to reject 93 percent of vendors interested in working with Lot18.

Before launching into mobile last year, the company saw that 12 percent of the site’s revenue was coming from mobile devices, showing how consumers rely on their handsets to browse and buy deals while on the go.

At any given time, Lot18 features 15 to 20 items on its Web site. Therefore, merchandising is a critical piece of the company’s strategy.

Although social media can be key in driving Web traffic, it does not necessarily make sense for every business. Lot18’s core demographic is high-end males aged 35-to-55 years old and when asked if they have a Facebook account, many of its users said no.

Lot18 has seen that the majority of its consumers want wine that is priced between $15 and $20, but has also seen consumers pay up to $500 for a bottle of high-end wine.

Mr. James said that the wine industry is a $40 billion industry in the United States with more than 25,000 wine brands sold every year. However, the average American cannot name more than five brands and rely on recommendations from others.

The wine industry has been slow to adopt to digital, but with new laws that let wineries ship products to be sold out of states, more businesses and consumers are relying on digital to buy wine.

Mobile dining
Jonathan Zabusky, CEO of Seamless, New York, also spoke on the panel about how the online company is quickly beginning to take a mobile-first approach to its business strategy.

Seamless has apps for the iPhone, iPad, Android, BlackBerry devices and a mobile site.

The Seamless iPad app

Mr. Zabusky said the company is seeing close to 30 percent of orders being placed for consumer orders.

“We want to be where our customer is, and we are becoming a mobile-first business,” Mr. Zabusky said.

“A world where we become 100 percent mobile is not that far out,” he said.

“Being device agnostic is critical to our strategy.”

In addition to consumers, mobile also has the possibility of changing the way that restaurants operate. For example, a restaurant could use tablets as a digital menu that could be changed in real-time and could lead to upselling.

Seamless was founded in 1999 in the enterprise space as a digital resource to help employees order take-out and delivery food from work. In 2007, the site became open to consumers.

Mr. Zabusky said that approximately 90 percent of the company’s restaurants are mom-and-pop stores.

Seamless was founded with the idea that ordering food digitally is easier for both consumers and restaurants. For example, Seamless lets consumers submit special instructions when submitting an order.

Additionally, Seamless does not view itself as competing with restaurants. Instead, the company is a platform where restaurants can compete with each other for diners.

For Seamless, social media is primarily for sharing and getting information about its users.

Social media creates a community, which is all about context. This in turn can be used to get data about users to create a better service.

“It is not just a restaurant, it is about drawing connections between people,” Mr. Zabusky said.

Digital craftsmanship
According to an executive from Etsy, the reason why the company has been so successful is because it carved out a niche area and its founders knew the consumer.

“Everything was personified with the way they acted,” said Carrington Williams, head of strategic finance and business development at Etsy, New York.

“They were the people that they wanted to serve,” he said.

Because Etsy is made up of a community of artists and shops, each user has the opportunity to brand the company.

Social media has been huge for Etsy, especially Pinterest. Buyers can share their favorite things with friends and family via the social media site and is driving a lot of traffic.

Etsy’s iPhone app

However, social media also has the opportunity to take a company viral, meaning that there is no control behind the strategy. With the rise of social media, Etsy began beefing up its marketing department, according to the executive.

Etsy’s sellers are artists and do not necessarily have the same business principles that Web retailers have taken. For example, artists that merchandise their stores with well-shot photographs tend to sell well.

Etsy launched an iOS app and mobile site at the end of 2011 (see story).

Although Mr. Williams did not reveal exact numbers, he did say that they contribute to Etsy’s traffic and revenue.

“A lot of people associate craft as kitsch, rightly or wrongly,” Mr. Williams said.

“I look at Etsy as a place to find unique, high-quality goods,” he said.

Final Take
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York 

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