Scott Bohrer spent seven years as a startup investor at Philadelphia’s SeventySix Capital, but he always wanted to run his own company. In 2014, after trying a few projects in the online gambling space, he finally came across a problem he felt was worth solving.
When people shop online, they’re always looking for a discount. Often before checking out, a shopper will do a Google search for promotional codes to plug in. But the store’s own promotions are hardly ever at the top of the search results, even for big stores like Best Buy.
Instead, sites like RetailMeNot and Groupon show up first, and those sites have made big businesses out of retailers’ SEO fails. RetailMeNot, for example, went public in 2013 at a $1.4 billion valuation.
For stores, missing out on coupon search results can result in big customer acquisition costs.
“Stores have a lose-lose proposition,” Bohrer explained to Business Insider in a phone call Thursday.
The best case, he says, is a customer will land on a site like RetailMeNot, find a code that works, and return to the shopping cart to make a purchase. But even in that scenario, the store probably paid to acquire the customer in the first place, on Facebook or somewhere else, to bring them to their website. Then at checkout, they lost the customer to a coupon site where the person will need to be lured back again. If a customer does return and uses a discount code from RetailMeNot, then the store has to pay RetailMeNot a commission.
So really, the store is paying twice to acquire customers — once to bring shoppers in and once post-coupon — rather than a one-time fee. And that’s a
A worse scenario is someone leaves a store’s shopping cart in pursuit of a coupon and never returns to complete the order.
For the past year, Bohrer and his two co-founders Andy Schön and Justin Chapman think they have been building the solution for stores. Their startup, Thrive Ecommerce, has a suite of enterprise tools to help businesses create their own coupon management platforms and savings pages that are SEO optimised. Stores pay a flat monthly fee for the tools and can manage the coupons, cater them to certain types of shoppers, and view analytics on the promotions.
A lot of coupon solutions already exist. Honey is one Thrive competitor that’s a browser plugin. It makes it so a shopper never has to leave a store’s site to coupon hunt, and it requires no manual labour or coupon management on the store’s side. Instead, Honey crawls the web in the background, pops up with a number of coupon codes to try at checkout, tests them in a few seconds, and presents any savings.
Still, Bohrer thinks stores actually want more control over their coupons than that, and his monthly subscription service will allow them to reach shoppers where they’re already product hunting — on Google. Bohrer is beginning to test his theory with a few smaller case studies, and Thrive Ecommerce just completed an $875,000 seed round of funding from his former firm, Seamless founder Jason Finger (who Bohrer backed at SeventySix Capital), Ira Lubert, Dick Buell, Conductor CEO Seth Besmertnik, and Chris Cera.
Dick Buell, who formerly ran a marketing company that was acquired fore $1.7 billion, is joining Thrive’s Board of Directors.
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