Changing consumer buying behaviors mean brands can no longer rely solely on selling through a single channel.
For e-merchants and traditional retailers looking for new ways to connect and interact with consumers, Lucky believes that its approach allows them to work together not only to achieve this goal, but also to provide consumers with a better shopping experience.
The year-old company was founded by Sneh Parmar, who has a background in consumer buying behavior, and Nafis Azad, who has a background in UX software and product development.
Parmar was buying a certain brand of charcoal toothpaste online and waiting a week to receive the package. While telling friends about it, they told him he could actually find it at Target.
“That’s when the light bulb went out – why am I buying online and paying shipping when I can walk two blocks to Target?” he added. “Nafis and I started trying to understand the relationship between retailers and brands, which are always in competition with each other.”
They aimed to create something on top of the retailer infrastructure so that there was complete transparency of inventory in a retail store, essentially optimizing the ‘big box’ concept for everyone, ‘for be where the customer is and offer a hybrid shopping experience”. Parmar said.
Now a team of six, Lucky’s first product is a plug-and-play API, also available on the Shopify app store, that integrates with major retailers in minutes – it already works with Nordstrom and Sephora – so e-commerce businesses can gain visibility into store shelf inventory and offer local fulfillment options. For example, when someone orders a product online, Lucky will see if it is available from a local retailer and give the customer the option of shipping or picking it up at the store.
As noted, Lucky also uses data to bridge the gap between brands and retailers, providing data-driven insights into real-time inventory distribution, discovery, and how to market brands in-store.
The company already works with 10 brands, including men’s cosmetics/skincare company Stryx, where Lucky is integrated into more than 10 of its SKUs.
After Parmar and Azad launched a beta pilot in the fourth quarter of last year, they saw a 10% engagement rate from consumers using Lucky. They wanted to scale through national distribution and, having entered into partnerships with Nordstrom and Sephora, now have access to thousands of brands to be Lucky’s customers, but to achieve that scale would require raising capital.
Lucky recently closed a $3 million seed round led by Unusual Ventures, with participation from Plug and Play Ventures and a group of angel investors such as Sara Du from Alloy, Kyle Wong from Pixlee, Kyle Schroeder de Cremo and NBA player Wesley Matthews.
The new funding will allow Lucky to strengthen its team on the engineering, product and sales side, Azad said. The company plans to grow its workforce to 10 over the next two quarters and hire about seven new retailers by the end of the year. It also plans new features, including better store locator and inventory tools, and expanded fulfillment options.
Meanwhile, Rachel Star, a director at Unusual Ventures, understood what Lucky was aiming to do, having worked for Nordstrom on the corporate side herself. She noted that retail traffic has been down for about five years now, and the ability to bring people into a store, whether they’ve ordered an item online or just wandered in, provides a significant boost. to the brand.
“When you think about eight years ago when direct-to-consumer brands really started, it was a one-to-one relationship with consumers, but scaling became a challenge. , so many retail stores opened,” Star added. “Stores like Nordstrom and Sephora already act as aggregation points, so when brands partner with retailers to get network density, it drives traffic to those retailers. Even when they return something, the people often buy something new. It’s a very cool combination where the needs of both sides can be met.
Azad mentioned Ulta placing products in Target as a way to gain density, and when I saw that the DTC-exclusive men’s grooming brand Lumin launched last month at Target and Walmart, I asked CEO Kevin O’Connell why Lumin believed that a physical presence in the stores was also justified.
He explained that having items in a physical store “made a lot of sense” for the company’s growth strategy, although he said the company was not slowing down its online business. Lumin surveyed customers and found it was convenient for them to purchase products while they were already shopping.
“We have tracked our steady year-over-year growth over the past couple of years and spent a lot of time analyzing data which showed that customers in the men’s grooming products market most often perform those purchases at major retailers, especially Target and Walmart,” O’Connell added. “And of course, partnering with household names like Target and Walmart provides us with a valuable opportunity to further grow our brand and expand its reach to new customers who are active in-store shoppers who may not have been. not aware of your online presence before.”