Ari Horowitz Of Swiftline Corp On The Future Of Retail
An Interview With David Liu
Focus on experiences in-store. The value of a physical location is connecting buyers with the brand. You need to make stores fun places to go for buyers.
Ari Horowitz is Co-founder and CEO of Swiftline Corp, a data-science backed, e-commerce software company that acquires and builds integrated data and technology solutions. Swiftline provides intelligence for delivering financial services to e-commerce businesses and propels e-commerce sellers with optimization strategies, business-building solutions, and access to growth capital. Ari is also Co-Founder and CEO of Yardline, a subsidiary of Swiftline and provider of growth capital, business tools, and competitive insights for sellers on Amazon, eBay, Etsy, Shopify and more. Prior to launching Yardline, Ari was SVP, Strategic Partnerships and Corporate Development for Thrasio, the largest acquirer of Amazon businesses and the fastest U.S. company to reach unicorn status.
He has co-founded and been CEO of multiple companies and has an IPO to his credit. During his career, Ari has been a senior member of teams that completed over 75 M&A transactions and over 20 equity and debt financings, with a total transaction value in excess of $1.5B. He has been a pioneer with pushing technology into nascent sectors including being early in media tech with BlackBook, Vibe and others, and hospitality tech with involvement with Resy, Seated, Velocity Black, and others.
Ari received a Bachelor of Arts in economics from the University of Pennsylvania. He’s passionate about rescuing and redistributing food through his support of City Harvest. Ari is an avid kite surfer, snowboarder, and runner, and is based in New York with his wife Caroline, identical twin daughters, Hudson and Chloe, and son, Henry.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
In 1992, a couple years after graduating from the University of Pennsylvania, I joined one of my close friends to help launch a software company called Conley Corporation. We were the quintessential two kids in a garage (actually borrowed desks in the back of a real estate company’s offices which we traded for IT support) hustling and chasing our dreams. I hired Carlos Cashman as one of our first software developers. We ended up selling Conley to EMC.
Carlos and I started 2 more companies together — the third of which we took public. We were having one of our regular lunches about 4 years ago when he told me about this company he had just started to roll up Amazon FBA sellers. I was particularly intrigued by the idea of buying companies at scale using Amazon data, and I joined Carlos to help build the M&A team.
I helped buy over 50 companies before recognizing the opportunity to use the same basic data and technology to provide growth capital rather than buying companies. In early 2020, right before the pandemic, I partnered with the smartest data and lending guy I know, Tomo Matsuo, and we launched Yardline Capital with the help of Thrasio. Riding the growth of e-commerce around Covid, Yardline took off. We focused on building technology to make our underwriting more efficient and more intelligent. This included building hooks into most of the major marketplaces and platforms. We also recognized that the SMB e-commerce sellers needed more than just our capital — they needed a page out of the Thrasio playbook on how to operate and grow their businesses. We launched our Seller Success platform to fill this need. Seller Success was mostly analogue, but we started to build technology to deliver prescriptive recommendations based on data. We were a great lead gen channel for Thrasio. In June of 2021, Thrasio acquired the Yardline business for the team, lead gen, and technology.
Around the same time, one of my colleagues at Thrasio, Anthony Johnson, had left his position as CTO. Anthony had a similar mission to that of Yardline Seller Success — to provide technology to enable brand managers at Thrasio to be smarter and more efficient. Anthony, Tomo, and I teamed up in July of 2021 to launch Swift line with the vision of building and buying a suite of integrated software solutions for e-commerce.
Can you share the most interesting story that happened to you since you started your career?
Well, the answer to that certainly depends on the audience. I had a close friend of mine from Penn who used to pretend to put a knife in her stomach every time someone asked what I did for work — I guess being a tech entrepreneur wasn’t that cool in the 90s. Thank you Jack Dorsey and Elon Musk!
One of my favorite stories came out of buying BlackBook.
I had been a successful tech entrepreneur up to this point in my career and I wanted to try something different, where I could apply my knowledge of technology to a business sector that was technologically behind. In the mid-2000s, I had a thesis that we’d have a location-aware mobile device in our pockets, and that we would use it to find the best places to eat, sleep and drink. I wanted to own the content for that and ultimately put a payment platform behind it. I thought it would be very lucrative and fun to own the front end to this opportunity. My partners and I bought BlackBook magazine to be the platform to pursue this idea.
At the time, BlackBook was one of the cool luxury, cultural icon lifestyle magazines out of Soho in NYC focused on art, entertainment, fashion, restaurants, and nightlife. It seemed to be a perfect platform and brand to take to the digital world and execute on local mobile guides. We created the online version and then we were one of the first apps in the iPhone app store.
Part of our strategy to keep the local content cool and relevant, included discovering up-and-coming celebrities. We were early in the DJ revolution and were one of the first to cover a rising artist — Tiesto. One of my partners and I were big fans — we rarely participated in the content, but we met Ties (as his friends call him) when the team interviewed him in Miami at Winter Music Conference. He and my partner hit it off, and my partner ended up spending a bunch of time with him on tour. It helped that his plane became the “Tiesto Tour Bus” at times. At a show in Stockholm, my partner met an amazing woman who later became his wife. The best men at the wedding were me and Tiesto!
Are you working on any new exciting projects now? How do you think that might help people?
I believe what we’re doing at Swiftline goes a long way in helping people live the entrepreneurial dream, which I personally have been very fortunate to enjoy. With all of the incredible opportunities around e-commerce that are available to anyone with a laptop and some hustle, access to growth capital can still be a major roadblock. One of the major motivators for me with Yardline is that we provide the growth capital and seller support that those entrepreneurs need to grow their businesses and live their dreams. Entrepreneurship is about being bold, taking calculated risks, and failing forward. Swiftline provides e-commerce entrepreneurs with data outputs and actionable insights to confidently propel their businesses forward and improve the chances for success in an increasingly challenging environment. It’s not just the strong who survive — it’s those with the best weapons!
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?
I spent too many years being too early (which, in venture investing, is the equivalent of being wrong) chasing hospitality tech projects. When Carlos brought me in to help build the M&A team at Thrasio, he opened my eyes to the power of the e-commerce marketplaces, which has been an amazing run over the past 3 years.
How have you used your success to bring goodness to the world?
I’ve employed thousands of people over the years, made lots of money for investors, and have continuously tried to instill my values within them. While contributing to many charities over the years, my primary focus is around City Harvest where I’ve sat on the Generation Harvest Board for many years and continue to personally support what they do, as well as encourage other people in my network. We enjoy some of the world’s greatest restaurants, but too much good food from them still goes to waste. There is plenty of food in NYC to feed everyone — people are hungry around us only because we lack the funds for redistribution. This is a solvable problem! Please help me make sure that good food doesn’t go to waste by donating to @City Harvest. Thank you!
Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?
Walmart is a great example of a giant retailer that leveraged the Pandemic to complete its digital transformation. Starting in the mid-2010s, Walmart refused to be disrupted by Amazon and they successfully reinvented themselves to be digital-first. To compete with Amazon Prime, they launched Walmart+, a Third-Party Seller Marketplace that can give the best sellers access to the online marketplace, physical stores, and also now a paid advertising service.
I believe the fundamental change from the Pandemic is that we’ll see more online-first retailers who also have a physical presence. Taking many of the lessons from the e-commerce marketplaces will help shift the way we execute on physical retail — specifically with the AMZN marketplace where the bulk of products sold is not owned by AMZN. It’s a much better model for the use of capital.
I also believe that successful retailers need to be more experiential — this is something that cannot be replicated online.
The supply chain crisis is another outgrowth of the pandemic. Can you share a few examples of what retailers are doing to pivot because of the bottlenecks caused by the supply chain crisis?
Getting the supply chain right is the difference between life and death.
Three things are happening in eCommerce particularly:
- eCommerce financiers are now looking at supply chain to assess the risk of a company before financing working capital,
- Aggregators are looking at supply chain, notably dependence on China, when valuing companies to purchase,
- Retailers are vetting inventory when working with brands. For example, a brand’s #1 risk of being penalized by the Amazon Marketplace listing engine is lack of inventory.
Not long ago, brands that worked with suppliers in Asia could buy products at a cheaper rate and be competitive. Today, with the risk being priced by financers, buyers, and retailers, brands with a diversified supply chain may buy products at a slightly higher rate, but they will be more competitive in the long run.
How do you think we should reimagine our supply chain to prevent this from happening again in the future?
The first thing the Online Retail industry needs is the right tool kit: tools to assess risk, forecast demand and analyze their upstream and downstream supply chains. We’ve gone from a world with virtually no borders to a world where borders can be shut overnight. You can’t plan for what you don’t know. Swiftline will continue to improve its suite of offerings to address this.
Next, you need to find the right partners and the right strategy. Third Party Logistics providers, drop shipping, micro warehousing; these can all play a role, but it depends on your business. There is no silver bullet here. Start from the data and build a strategy based on the situation.
In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?
We believe the world is, and will continue to become, more ‘eCommerce first.’ Nobody can beat Amazon Prime for delivering the latest board game. However, a place for brand audiences to meet and share a game is priceless.
Retail stores have an incredible role to play as hubs for customer experiences, brand interactions and solidifying relationships. Physical spaces are about the customer experience and fostering their connection to the brand. The necessary change for traditional retailers is to go online first and then leverage their stores as extensions of the online experience, not the other way around.
The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
While many brick-and-mortar stores and malls are going out of business, I believe “Retail Apocalypse” isn’t the right word to describe the situation. We’re seeing a platform shift from Mall to Online, the same way we saw a platform shift from Desktop to Mobile ten years ago or from downtowns to malls in the late 1990s. The brands that survive platform shifts all have three lessons to teach:
- They have strong values to differentiate,
- They embrace the future — making online the priority and having the physical retail complement the online experience,
- They massively invest in Tech and Data to be more productive and agile than their competitors.
Lululemon is an amazing store experience. But it’s also an incredible mobile experience, social experience and desktop experience.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?
We’re seeing a lot of successful sellers go from selling innovative but nameless products, to building a brand. Often, they start by selling on a platform like Amazon but then shift to direct-to-consumer over time. Branding is the only way to win against competitors while there are supply chain issues and inflationary pressure. That said, in a recessionary environment, people will be less brand-focused and more price-focused. This is a big advantage for AMZN where people don’t typically shop for brands.
In layman’s terms, a seller becomes a brand the day he falls in love with a problem or specific lifestyle, rather than with a solution or specific product. This shift from product to customer opens many possibilities in terms of building an audience, creating word of mouth, and outpacing competition through continuous innovation. It also requires partners that can help finance the shift and coach through the necessary technology changes, as well as data to identify opportunities that should be seized.
Swiftline aims to be the technology platform that the e-Commerce industry leverages to help e-Commerce mature and seller success stories become generational brands.
Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
- It’s about online plus brick and mortar, not online versus brick and mortar. Online and physical stores should work together to build a coherent and differentiated experience for consumers.
- Retail needs a startup mentality to drive customer engagement. Retail needs to test, learn and fail fast with new ideas. How many times did I read about Walmart’s or Disney’s failed bids online? Both companies had to learn to build the online presence they have today.
- Focus on experiences in-store. The value of a physical location is connecting buyers with the brand. You need to make stores fun places to go for buyers.
- Diversify and think strategically about your supply chains to have products in stock. Implement the right technology to be able to understand your supply chain and identify risk.
- Become as obsessed with data as Amazon is. Amazon famously gathers and processes massive amounts of data — from customer data to performance data, all the way down to a/b testing and analyzing clicks, Amazon is a business that is driven by data. Retail and ecommerce companies need to take their lead from Amazon. We need to be obsessed with data and analytics. That’s part of the reason why Swifline bought Charm.io, the leading data company for ecommerce. We believe the future of ecommerce will be dominated by data savvy ecommerce companies and retailers.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
First, let’s start by redistributing good, nutritious food to hungry families. This is a solvable problem — the food is available; it just needs the support to be redistributed. City Harvest!
Second, let’s finally legalize cannabis at the federal level. Allow federal banking to enable it to grow, and then tax it to pay for all the money we spent during covid and pay for federal programs. Stop incarcerating over related crimes — this will dramatically help communities.
How can our readers further follow your work?
This was very inspiring. Thank you so much for joining us!