The Decentralization of Retail
Working with Forerunner’s Kirsten Green, Shopify and Square to Take Indigo Fair to New Heights
About ten years ago, I introduced the Blunt Umbrella to the North American market. Selling this strangely shaped umbrella through more than 100 boutiques, a dozen big-box retailers, Amazon and our own e-commerce site, I’ve had a front row seat for an unprecedented period of change in the retail industry.
As the media has repeatedly reminded us, we are entering a new era for physical retail. With bankruptcies piling up, many have been quick to dub this new period “The Retail Apocalypse”. However, what I have been seeing on the ground looks more like a revolution than an apocalypse. Within this revolution, there is a massive, overlooked opportunity.
There are over 1M independent retailers in the US, doing more revenue than Walmart and Amazon put together. With today’s consumers craving a more personalized shopping experience, economic data shows these stores rising up to fill the gap created by bankrupt chains. Unfortunately, there’s one thing holding these stores back from completely taking over the retail landscape: the wholesale model is fundamentally broken.
We started Indigo Fair to reinvent wholesale with an online marketplace that empowers local retailers and ensures consumers will have an alternative to the bleak, automated future envisioned by Jeff Bezos. We believe in a future where you can still walk into a shop down the street and feel a sense of wonder finding unique goods crafted by people in your community.
Today, less than a year after our launch, we are excited to announce that our platform is connecting over 500 makers with almost 17,000 retailers — more stores than Nordstrom, Target, and Walgreens have combined. We have shops in all 50 states spanning dozens of categories, from bookstores and florists to grocers, spas, and clothing boutiques. Independent stores of almost every type are coming to Indigo Fair for solutions to their challenges with traditional wholesale buying.
We’ve also just closed a $12 million Series A financing round, co-led by Forerunner’s Kirsten Green and Khosla Ventures, with participation from Sequoia Capital. Kirsten is joining our board of directors, and I couldn’t be more thrilled to have her expertise as we continue to grow our platform. She’s no stranger to the retail market: Forerunner Ventures is the only VC firm to invest in both Dollar Shave Club and Jet.com, two of the biggest and highest-profile e-commerce exits in recent years, and counts Away, Birchbox, Bonobos, Glossier, Warby Parker and Zola among its portfolio companies.
We’re also introducing integrations with Square and Shopify that will let retailers use the power of machine learning to support their buying decisions.
The Trouble with Wholesale
Working with local retailers was simultaneously the most rewarding and frustrating part of my experience running Blunt Umbrellas. I was shocked to see how successful they were at selling — and even advertising — our products. Reorders always came quickly, and every time we hit the shelves of a new boutique, we’d see a sales spike on our own website in the surrounding neighborhood. Their success stood in stark contrast with the results from big-box retailers; in-store floor reps at chains like Neiman Marcus and REI had no idea how to tell our story or explain what made us different. It’s not surprising to me at all that independents are making a comeback while big-box stores go belly up; they’ve evolved to thrive in a world where the shopping experience is everything in physical retail.
At the same time, reaching these independent stores felt close to impossible. We spent almost $1M on trade shows and sales reps, but we struggled to stand out in these oversaturated channels. It’s become easier and cheaper than ever to take a product to market, so we were frequently lost in an ever-growing sea of products created by the Maker Revolution.
Even when we did get in front of local retailers, it was extremely difficult to convince them to take a chance on a $79 umbrella. They were afraid of getting stuck with the products and tying up their capital in inventory that might not sell. And because we were cash-strapped ourselves, we couldn’t give them payment terms, making a bad problem worse.
Local retailers today survive on their ability to find the best products for their stores and offer them at reasonable price points. After all, that’s what keeps customers coming back. Too many local retailers just buy the same stuff over and over again. Those that do experiment often end up marking up their best-selling items well over their suggested retail price to cover the costs of bringing in products that don’t sell. In a world where consumers have limitless options available at cutthroat prices online, that’s simply not sustainable.
At Indigo Fair, we empower retailers to discover and try thousands of items risk-free, while making it easier than ever for makers to rise above the noise and get their goods showcased in top boutiques across the US and Canada.
Providing Access to Capital - Getting the capital to purchase new goods is one of the biggest obstacles local retailers face. To try a new product today, retailers have to finance a large upfront order with a credit card. If the products don’t sell, they’re stuck with both the products and the debt. Even when new items do sell well, shop owners often can’t afford to buy enough inventory to keep up with demand.
At Indigo Fair, we let retailers try before they buy. Retailers aren’t charged for new products until 60 days after their order, at which point they can choose which items they’ll keep and which will be returned. This flexibility and freedom is revolutionary in the wholesale industry.
Eliminating Guesswork - More often than not, retailers today are choosing to bring on new products when something catches their eye or they have a hunch that an item will perform similarly to something already in-store.
When a retailer signs up with Indigo Fair, we use machine learning technology to analyze their aesthetic and customer demographics from their website and social profiles to make product recommendations. Now, through integrations with Square and Shopify, we can make ongoing recommendations based on actual in-store sales performance. When a retailer syncs their cloud-based point-of-sale system, Indigo Fair can pool their sales data together with data from hundreds of other stores in real-time, making recommendations with an unprecedented level of accuracy.
Saving time and money - Traditionally, the wholesale industry has revolved around trade shows. Makers spend tens of thousands of dollars exhibiting and retailers travel across the country to attend these shows. They spending weeks each year walking showroom floors trying to find products that fit their needs.
Indigo Fair eliminates the need for trade shows entirely. Makers can apply to join Indigo Fair, and once accepted, they just send us their product catalogue to get their profile up and running. Most makers receive an order within a week, and they get paid as soon as they ship the goods. For retailers, the benefits are even bigger — we offer each store that signs up a fully customized marketplace of makers for free, and we take care of all the logistics. When a retailer buys a maker’s product, our fulfillment team works directly with the maker to make sure the items are shipped to the retailer on time. With our Shopify and Square integrations, the products are now automatically added to their POS systems, saving hours of data entry.
Our mission at Indigo Fair is to transform wholesale and accelerate the Shop Local movement. We believe starting a business is a calling that can provide a path to autonomy and financial security that’s increasingly difficult to find in our economy. Makers and small retailers create millions of jobs and provide vibrancy to communities across North America. We want to rethink the way wholesale works to empower retailers and makers to pursue their calling and provide a better future for themselves and society.
Interested in joining us? Check out our open positions here!