BNPL isn't dying...it's growing!
Greetings, Pulse Subscribers!
We have some fascinating stuff this week that we can’t wait to share, so let’s get into it. Here’s the agenda:
Keep customers, make money
How to steal customers from the competition
Predicting the “next big thing”
The hybrid future of retail
All that, plus easy 3-D product modeling and the drawbacks of success in buy now, pay later (BNPL). No time to wait. Let’s do this.
Startup Deals
Retention Management Platform | Winning new customers is important for any business, but keeping the ones you have is just as crucial. A recent post on HubSpot found that just a 5% increase in customer retention can increase company revenue by 25% to 95%. Retail Rocket is a retention management platform designed to increase customer retention, boost lifetime customer value, and drive repeat purchases. Retail Rocket uses a mathematical model to segment customers from their first purchase by analyzing their actions (e.g., what links they click) to determine their wants and preferences. Using this information, Retail Rocket offers tools for campaign management like email marketing and web-based push notifications. It also uses AI to define the best time and method (email, SMS, etc.) to reach out to customers when and where they’re most receptive. With customers including Nintendo, Puma, and Decathlon, Retail Rocket recently raised $24 million in Series A funding.
Marketing and Sales Optimization | Everyone loses sales to competitors. It’s part of business. However, if you could follow a customer’s journey and see exactly where they veered from your store to the competition, you could improve that weak spot and perhaps win them next time. This is the idea behind Konnecto, a four-year-old marketing and sales optimization startup. By reverse-engineering the customer journey, Konnecto finds where along the way customers switched to a competitor to help businesses identify the gaps and vulnerabilities that led to the lost sale. More than that, the company offers actionable recommendations on what should be done across digital marketing channels to close those gaps and improve sales KPIs. Konnecto already has Mercedes-Benz, Coca-Cola, and more as customers and has recently raised $21 million in Series A funding.
Consumer Trends Prediction | The next big thing is already being talked about online. On blogs and message boards, reviews and social networks, tomorrow’s trends are already making waves. Black Swan Data pulls information from these sources and, using AI and data science, helps companies understand and predict consumer trends. The company calls it “Social Prediction” and boasts that its predictive models can identify new and emerging trends at least six months earlier than any other trend methodology. By offering insight into the next big thing before it arrives, Black Swan Data allows businesses to strategize for the future and innovate into emerging markets. With customers including PepsiCo, Unilever, Kraft Heinz, and McDonald’s, Black Swan Data recently raised $19 million in growth funding.
3-D Visuals App | In the restaurant industry, there’s an old saying - “Customers first eat with their eyes.” In e-commerce, it could be said that customers first buy with their eyes. Omi makes it simple for marketers to create realistic, attention-grabbing 3-D visuals in minutes, right from their browser, without needing to hire a designer. With their drag-and-drop SaaS app that requires no technical skills or design experience, Omi helps marketing teams create ultrarealistic 3-D models of a product, which they can use to quickly create high-quality images and videos with customizable backgrounds, added objects, and more. Plus, since the Omi models are 3-D, they’re ready-made for Web3 experiences like augmented reality. Omi recently raised €6 million in seed funding led by Dawn Capital.
Essential Industry Reads
As brick-and-mortar retailers continue to struggle with the great resignation, and e-commerce brands that once seemed invincible watch their valuation sink, Marc-André Kamel, partner at Bain, sees a new era dawning on the industry. In this bold video, Kamel lays out the case for the future of retail being a hybrid model, where the traditional strength of retailers is combined with the innovation of disrupters to create a new path forward. Offering key principles that successful retailers will adhere to and tips for navigating the difficult days at hand, Kamel makes a compelling case for what’s coming, and what it will take to succeed in the future of retail.
Learn about the new era of retail - https://atbain.co/FutureOfRetail
With recent news of BNPL giant Klarna raising $800 million as their valuation dropped 85%, and BNPL players Zip and Sezzle canceling their planned merger, it may sound like by now, pay later is in trouble. But at the same time, BNPL is more popular now than ever before. BNPL transactions accounted for 3.8% of e-commerce transactions in 2021, up from 1.6% a year earlier, and are projected to be at 5.3% by 2025. Interestingly, this seeming contradiction is that booming BNPL customer demand may actually be harmful for BNPL companies. In this intriguing read from RetailDive, Jonathan Berr looks at the rise of BNPL and the myriad difficulties the industry faces today. We looked at the dark side of BNPL in Pulse #36. This illuminating read further explores how a business that seems to be everywhere can still be struggling to stay afloat.
Read about the challenges facing BNPL - https://atbain.co/BNPL
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See you in two weeks!