Cart.com Founder Shares Insights Into How D-to-c Brands Can Succeed, And Scale
Omair Tariq is the cofounder and chief executive officer of Cart.com, which the company said “enables retail brands to quickly scale their businesses and easily sell across every channel.” Prior to Cart.com, Tariq served as chief financial officer and chief operating officer at Blinds.com, where he played a key role in scaling the high-growth e-commerce start-up prior to its acquisition by Home Depot.
He then served as a key member of the homedepot.com leadership team, responsible for online customer experience strategies and e-commerce business growth.
More from WWD
Why the Fiorucci Store Was the Mother of All Retail Concepts
Unites States Retail in the Aftermath of Police Brutality Protests
Here, Tariq shares insights into how e-commerce brands can scale, growth challenges facing d-to-c brands, and how to navigate a market influenced by third-party marketplaces.
WWD: Why is it important for brands to be able to scale quickly in today’s market?
Omair Tariq: The environment for e-commerce brands today is more competitive than ever. In 2020 and 2021, people weren’t spending on travel and live entertainment or heading to the malls, so retail e-commerce soared. But now, consumers have options. So, the bar is inherently higher.
The significant demand and market environment during the pandemic supported business growth, even if a company had flaws. Customers were eager to get the product, even if the experience wasn’t perfect. So, driving repeat sales, retention, and lifetime value weren’t as important to grow.
But it’s a completely different environment now. Going forward, the customer experience becomes much more valuable. If a brand has a business that doesn’t scale — meaning, it has more demand than it can properly handle, whether in terms of customer acquisition, conversion, fulfillment, or another capability — it faces an increased risk that something will go wrong during a customer interaction.
That’s why it’s important for brands to establish strong capabilities that will serve them in good times and lean times. We like to say that if a brand gets big before it gets really good at e-commerce, it’s creating a storm for its customers. It won’t be able to serve them properly. But if a brand gets good before it gets really big, it can actually scale much faster.
WWD: What barriers do brands face when looking to accelerate their growth? How do those barriers differ for large enterprises versus smaller d-to-c brands?
O.T.: One common barrier for brands is that it’s difficult to get the full picture of who their customer is. Tying together the right customer data is critical to developing meaningful insights. Marketing, customer acquisition and growth are much more expensive when a brand can’t target the right customers.
The problem is bigger for smaller companies. It becomes less of a problem as they grow because larger businesses simply can’t survive if they don’t know their customers. Big companies have access to customer data, but they have to figure out how to personalize and optimize the experience to get customers to keep coming back.
Another major barrier is that it’s hard for brands of all sizes to aggregate data. Too many brands have what we call a “Frankenstack” ecosystem — and when a brand has a messy back-end infrastructure, it shows up as a messy front-end experience for the customer.
Small brands typically don’t have the capital and expertise they need to build an integrated data system themselves. Instead, they use a platform like Shopify or BigCommerce, but then also connect to 20 different software apps that enable different components of e-commerce, like payments, fulfillment, inventory management, returns, loyalty programs, and on and on. But that’s costly and it means that each data point is sitting in a different spot. The brands end up losing visibility into who their customers are because their software partners are controlling their data. Lots of small brands just don’t know that there are integrated solutions out there that can address all of this.
Meanwhile, larger companies may have the wherewithal to build or buy vertically integrated tech infrastructure, but because their leaders, teams and priorities evolve over time, they don’t tend to have a holistic strategy for orchestrating their infrastructure. And the end result is the same: a Frankenstein tech stack. Bigger players may use fewer software apps than smaller brands do, but it’s still complicated.
Larger brands also tend to be averse to changing what’s worked for them in the past. For example, a company that’s reached $200 million in sales may be reluctant to risk revamping its infrastructure and just use a little bubble gum and duct tape to hold everything together until it reaches its next revenue milestone. But at some point, the bubble gumming and duct-taping isn’t sufficient and the whole thing can fall apart.
WWD: How can brands maintain control of their brand message, customer relationships and data, given the reach and power of third-party marketplaces?
O.T.: Marketplaces are a beautiful thing, but they can also be dangerous. Brands need to be able to sell on marketplaces like Amazon, Walmart, eBay, or Target, depending on who their customers are, because some 50 percent of searches for their products likely start on those marketplaces. But brands also have to have their own brand identity outside the marketplaces. They need a distinct web presence of their own and they need to be able to provide the same level of service across every other selling channel that customers get on marketplaces.
Imagine a brand that sells shoes on Zappos, as well as on Amazon, eBay and Walmart. Most customers prefer to buy the brand’s shoes on these sites because they already shop on them frequently. That means they don’t have to reenter their information every time they buy something, their orders ship in a day or two, checkout is easy and the whole experience is familiar and convenient. So, when they go to the brand’s own website, they shouldn’t have to reenter their credit card and shipping information every time, or wait five days for their order to ship, or wonder why the brand doesn’t have a loyalty program. Brands need to have the same infrastructure in place on the non-marketplace side to provide an experience that’s similar to what customers get on marketplaces.
WWD: What’s the value proposition of Cart.com for retailers and brands?
O.T.: Cart.com helps brands grow quickly by enabling them to sell across every online channel, so they can attract more customers and maximize revenue. We simplify operations through a single, integrated platform and consolidate all customer data in one spot, so brands can easily access it to gain the insights they need, without having to chase down information from some 20 different software partners.
Our full suite of modular solutions includes powerful storefront and marketplace tools that increase conversion, fulfillment capabilities that drive speed and cost efficiencies, and marketing, customer acquisition, engagement and other tools. We provide the entire infrastructure brands need to sell everywhere online.
WWD: You have made seven acquisitions in under two years. Why has Cart.com pursued a strategy of buying companies that offer specific capabilities or resources rather than building those capabilities or infrastructure in-house?
O.T.: If a brand comes to us with a specific pain point, we have to have a great product in that area that solves the brand’s problem. That means our business needs to be highly modular. However, we realized very early that it would be nearly impossible for us to build every single product ourselves. There wasn’t enough time and capital and there’s always execution risk when building in-house.
We decided instead to go out on behalf of brands and put together a fully integrated and interoperated tech stack by strategically acquiring certain capabilities that we couldn’t build as quickly or as expertly ourselves. Our M&A strategy has enabled us to be both modular and great. And now, if we partner with a brand to solve one or two issues, we can grow our relationship with them over time to fulfill all of their e-commerce needs.
WWD: Regarding fulfillment specifically, how is Cart.com helping its brand partners keep up with consumer demand for fast and efficient delivery?
O.T.: We’ve invested heavily in millions of square feet of fulfillment space across the U.S. and our scale enables our brand partners to position inventory closer to their end customers and speed their deliveries. Brands we work with can provide one-day ground delivery across almost the entire U.S. and one- or two-day ground delivery to more than 90 percent of U.S. consumers, thanks to our network of facilities. That means smaller and midsized brands can compete effectively on fast delivery with the biggest retailers.
And it’s not just speed, but efficiency. Our brand network has billions of products shipping through our facilities, which means we enjoy scale advantages with FedEx, DHL and other shippers — savings that we then pass on to our brand partners.
WWD: What are some of the brands Cart.com has partnered with and what were the outcomes?
O.T.: American clothing brand Rowing Blazers partnered with Cart.com ahead of the 2020 holiday peak season to rapidly scale its fulfillment operations. The brand was shipping from its storefront in Soho and the marketing strategy in place leveraged celebrity partners around the globe, who often needed Rowing Blazers items shipped to them overnight for events. Cart.com’s 3PL capabilities enabled Rowing Blazers to increase orders shipped by nearly 43 percent in a single year and ensure that customers received the best possible delivery experience.
We worked with beauty brand bareMinerals to conduct a marketing and advertising audit and then implemented new marketing data capture, tracking and measurement tools and ad tech tools infrastructure to drive growth in the brand’s media efficiency ratio (MER). The result was $10 million in media cost efficiencies in the first year, resulting in a 40 percent increase in the MER. In addition, Cart.com worked with the brand to map the bareMinerals customer journey and then optimize and diversify brand creative assets to address unique audience segments, resulting in a 6.5 times increase in digital consumer engagement.
Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.
