Umang Sota (MBA ’21) talks with co-founder of London-based startup Trouva that is using online to spread the beauty of offline and not steal it.
Undoubtedly, technology advancements—not only in the e-commerce space but also across the whole ecosystem—including mobile penetration, payment systems, and logistics are increasingly attracting customers towards digital stores. The rhetoric on “Death of Retail” is mostly based on the fact that we can click through to buy the same GAP T-shirt and the same Yankee Candle no matter where we are. But don’t you miss the small, delightful stores I call “hidden jewels”— such as Wild Swans, a Danish lifestyle store in Islington, London or Albino, an eclectic homeware store in A Coruna, Spain? I adore the lucky finds that I got from such stores around the world but more and more of these stores are starting to disappear.
However, with the evolution of technology and modern age of retail, new trends are emerging that may create new winners in this game or give some struggling ones a fighting chance.
The first major trend is that customer loyalty is becoming ever harder to earn in this new digital world. Clicking on a 2D screen is by any measure a very impersonal experience which doesn’t mimic store loyalty. Then with every brand, store or product going online, the competitive landscape has become even more crowded. So, in order to earn customer loyalty in digital space, businesses have to be the “first” to offer something “different” to meet the needs of each “unique” customer. With their personalized, one-of-a-kind offerings, digital avatars of these small, boutique stores have real potential to win true customer loyalty.
The second trend is focused on responsible and sustainable retail. It is the new focus with climate change entering the mainstream public discussion. Again, these boutique stores—by bringing hand-sculpted items or reused antiques and numerous other beautiful stories behind their value chain—not only alleviate any sustainability concerns but also draw customers in. The big challenge for them, though, is that they lack the muscle to make mammoth investments in going digital and global. In fact, the idea of mass outreach and thus mass production is an antithesis to their value proposition. So, they need not only a scalable and efficient digital platform but also one that keeps their “first, different and unique” identity intact.
Mandeep Singh, a University of Cambridge graduate, an ex-consultant and an ex-PE analyst—along with his two co-founders, Alex Loizou and Glen Walker—has created just that with his company Trouva.
“Trouva is an online marketplace that seeks out the best independent boutiques from stylish neighborhoods across the world and makes it easy for our customers to uncover just the right things they want, wherever they may be hidden,” explains Singh. At the same time, Trouva provides a lifeline to these independent boutiques by providing full armor to brave this new digital world. Singh adds, “For these boutiques, we take care of everything. We provide an online sales channel, lifting up sales through global discovery and demand generation. We take care of logistics and provide a proprietary technologically-advanced inventory and payment management system.”
It may feel like there are other providers that offer some part of Trouva’s service, such as Etsy (which offers curated gifts and some homeware) and Shopify (which is helping small businesses go online). However, Trouva has gone for the kill by addressing both sides of the value chain—independent stores and end consumers through its marketplace proposition.
Singh attributes Trouva’s success in part to its approach towards these independent stores. “We have always seen the stores as true partners. From Day 1, we invested in building a trusted community with our partner stores. Once they are signed up, we offered them our proprietary digital platform for free, trained them in building their portfolio and brought in leading experts in digital marketing like EMEA [Europe, Middle East and Africa] leaders from Facebook. This empowered them with skills and tools to take charge of their own success. And now, when they have seen their sales double, they are our biggest champions and help bring many more partner stores”
Most online platforms never expose their customers and suppliers to each other due to the fear of being cut-out of the engagement. But Trouva has decided to get ahead of this problem. It offers “Click and Collect” service where they allow customers to pick up their purchased item directly in store (which can be convenient for customers purchasing from shops in their area). It’s another option of collection/delivery they offer alongside worldwide shipping, express delivery and Access Point delivery (which has proven particularly popular amongst German customers). The initial focus on customer service and partnership with retail partners seems to be working for them as most of these customers who have been to the store continue to order through Trouva. Singh proudly says, “We want our customers and partners to come to us not because they have to but because they want to.”
Trouva has taken an innovative approach to structure their business model. When going online, most brick-and-mortar stores keep the offline world separate; for instance, Walmart’s online orders are shipped not from its stores but from a centralized warehouse. Instead of investing in a storage facility, Trouva sees these stores as a network of decentralized warehouses. Trouva leverages the real-time location of the item and the customer buying behavior to look at the most efficient routing mechanism. Through this decentralized structure and the ability to ride on the spare capacity of the local couriers, they have been able to get the product in the hands of customers within hours when needed.
With all this, it is no surprise that Trouva has seen tremendous growth since 2015, offering more than 200,000 unique products from over 800+ independent boutique stores across 13 countries to more than 1.5 million site visitors each month. It has garnered investments from firms like Octopus Ventures, Local Globe, and Index Ventures. It has a growing team of over 90 employees.
Trouva continues to find opportunities to add value by bringing services like sustainable and cheaper packaging solutions to its partner stores. The business expanded beyond the U.K. for the first time in June 2018 with the launch of 20 Berlin boutiques on its U.K. platform. It has since grown rapidly and now brings together independent stores from over 300 towns and cities, including Paris, Lisbon, Rome, Copenhagen and Barcelona. Today, 40% of Trouva’s retailer network is made up of bricks-and-mortar shops, across 13 European countries. The customer base is also growing and expanding beyond the U.K. In addition, it recently launched its German website trouva.de in order to further grow international customer demand.
Technology will only get more advanced and will push towards newer models like retail-as-a-service and social shopping. With Trouva, I am excited to see these hidden jewels flourish and continue to offer us their treasures.
Umang Sota (MBA ’21) is originally from India and has worked in product and business development roles in the B2B technology space across Asia and Europe. Prior to joining HBS, Umang was the Global Head of Product for Tata Communications’ Cloud & Data Center Services based out of London. In addition to technology, she is passionate about early education and has taken on active leadership roles in projects around education for the last 10+ years across India, Singapore, and the United Kingdom.