Photo: Courtesy Michael Tolkin
There’s no question that successful brands are embracing social commerce.But Merchant Exchange, a New York-based startup that launched two weeks ago, wants to tone down the “social” aspect of social commerce for a specific group of consumers.
The site, a small but quickly growing luxury rewards network, targets a group that co-founder Michael Tolkin refers to as “wealthy millennials”—people aged 25 to 35 who spend between $30,000 and $40,000 annually.
“They have money to spend and want to be discerning,” explained Tolkin, who left his job as the director of business development at IMAX last year to work on Merchant Exchange full time. “They’re educated and busy; they’re not coupon-clipping.”
The company is currently working with around 65 vendors, including Starbucks, Dos Caminos, Lacoste, Longchamp and Leading Hotels of the World to offer an array of discounts, free gifts and special experiences to members.
Membership is free, and after members make it past the waitlist they’re asked to select brands they like from a menu. Their personalised Merchant Exchange inboxes immediately start filling with perks, from gift cards to red carpet movie premiere passes.
For luxury brands, a partnership with Merchant Exchange is a more discreet way to connect with consumers than standard social media channels, and puts them in front of a curated audience of spenders.
“It’s like Facebook brand pages without the social,” Tolkin explained. “These deals won’t necessarily be broadcast to your friends.”
Eventually, the company hopes to expand its deals outside the New York area and target a broader group of consumers than just “wealthy millennials.” And Tolkin said that at some point, Merchant Exchange inboxes will become repositories for all of the daily deals and coupons a member receives, not just those from Merchant Exchange.
The company is in the process of finalising an angel round of more than $500,000, at which point it will have raised more than $1 million. The full-time team of five includes Mark Weinberger, a co-founder who was formerly a management consultant at Oliver Wyman and Jake Schonfeld, the former chief of staff of corporate communications for AOL.
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