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6 Reasons New Hyper-Focused E-Commerce Companies Are Doing So Well

These startups are blazing a new trail in e-commerce, but why exactly are they doing so well?
Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and currently writing a book about scaling up business. Twitter @AndrewDeen14
Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He implements lean methodology and currently writing a book about scaling up business. Twitter @AndrewDeen14

You’ve probably heard about some of the startups that are catching attention from customers and investors alike—names like American Giant, ThirdLove, Allbirds, and quip. These startups are blazing a new trail in e-commerce: they’re focused on only a few products (or product types), and their goal is to make those products as good as they can possibly be. As a testament to their success is their impressive growth: American Giant quickly ran through their inventory of American-made hoodies early on and had to take many customers’ orders on backorder. ThirdLove grew 400% from 2014-2015, and has an impressive list of powerful investors involved with its growth. So why are these e-commerce sites doing so well?

1. Reinventing the Wheel

There’s no real reason to reinvent the wheel—unless the wheel is flawed to begin with. That’s what the founders of these e-commerce companies noticed: the traditional designs and materials used for certain products just weren’t meeting customer expectations. Heidi Zak, one of the founders of bra company ThirdLove noticed that not only were most women wearing bras that didn’t fit, most of these bras were designed by men—people who would never wear the garment they were designing. So she decided to completely revamp the manufacturing process and materials used in bra-making, offering beautiful and functional bras that wouldn’t poke or pinch. The makers of American Giant wanted to produce a hoodie made from high-quality cotton and craftsmanship, while Allbirds took on the challenge of making a truly comfortable sneaker that was machine-washable and wouldn’t hold onto foot odor.

2. Sustainability

Sustainability and human-driven climate change are hot-button issues for customers, and many people are willing to pay more for a product that has been sustainably product. Many of these hyper-focused e-commerce sites emphasize sustainability, and they’re able to keep control of their materials because they’re not selling a wide range of products. Allbirds uses sustainable New Zealand merino wool for several reasons: it’s eco-friendly, soft, and controls odor.

3. Authenticity

People want to be able to connect with the companies they buy from, and they want to feel that a company is being authentic with the image they’re presenting. In the case of these e-commerce startups, most of the founders noticed a real gap in the market that was important to them—and filled it because the solution was important to them. That dedication comes through to consumers and helps potential customers feel good about purchasing from a company that has authentic values and displays consistency in their messaging.

4. Quality

Because they are focused on only selling a few types of products, these e-commerce companies can focus on what really matters: quality. It’s not enough to sell a competing product, that product has to be better than the competition in order to stand out. These new startups know that quality is king, and they’re using the best materials and construction methods to ensure those strict standards are met. American Giant, for instance, has all of its clothing made in the United States and offers a lifetime warranty, always striving to offer top quality garments that will last for years.

5. Price

Though quality does come at a cost, these hyper-focused startups have largely remained dedicated to offering reasonable prices to their customers. Quip, makers of a new breed of electric toothbrushes, offer free shipping on their brush head refills, and price their base toothbrushes so that they are accessible for most people to purchase. This reinforces their brand messaging that they want to make oral care simple. American Giant, ThirdLove, and Allbirds prices reflect the care and quality that goes into each item, but the prices are competitive, and are often lower than those of other retailers. Customers also have the knowledge that these items will last a long time, which makes the initial purchase price more attractive, even for people who might not spend as much on clothing normally.

6. Social Responsibility

These e-commerce businesses are bringing in the revenue, and some are reinvesting in the community. ThirdLove has donated over $1 million worth of bras to charities, allowing women living in poverty to gain the benefits of their products. They also encourage their customers to donate. In addition to gaining goodwill from practicing social responsibility, these gestures are a smart marketing move for these e-commerce sites. American Giant and Allbirds do social responsibility a little differently—American Giant focuses on creating jobs in the local economy by keeping construction in the United States, while Allbirds ensures that their wool is ethically sourced.

Lessons From These Companies

So what’s the takeaway from these hyper-focused e-commerce companies? A few things: don’t try to do too much, focus on quality, and always maintain your values. Knowing what “pain points” your customers have and designing a product to meet those needs is the best way to ensure long-term growth.

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