Compulsive shoppers, meet your worst enemy. It’s not Cyber Monday.
A new e-commerce site called Drop ‘Til You Shop launches tomorrow. The aim, as the name might suggest, is to gamify bargain shopping. Focusing on fashion, jewelry, ticketing, electronics, and hotels/cruise deals to begin with, Drop ‘Til You Shop helps retailers turn over discounted or end-of-season inventory. A price ticker below each item runs down, and users hit it when they see a number they like; they’re then transferred to a checkout page, and the first person to check out wins the item.
It’s something like the last 30 seconds of an eBay bidding war, as well as a nifty way to get people to buy unsold products in an adrenaline-fueled tizzy of competitiveness.
Peeractive, the Australian startup behind Drop ‘Til You Shop, raised $1.25 million in venture round funding from Robin Hood Ventures and DreamIt Ventures last month, having graduated from DreamIt’s Philadelphia accelerator program in 2012.
While Drop ‘Til You Shop fits in with the landscape of flash sales, daily deals, and the aforementioned eBay bidding wars, the behavior it’s promoting is somewhat more obsessive than those sites, which someone might visit once a day. CEO Nick Rosenthal said that since the site has been in beta, user sessions are clocking in at 30+ minutes, and they’re coming back in the same day to check back.
After launch, retailers will be able to embed Drop ‘Til You Shop on their own sites. Drop ‘Til You Shop can generate margins of up to 40 percent with certain products, and the startup takes a percentage cut of each sale depending on whether it took place on the retailer’s site (around 8-10 percent) or on its own site (about 18-20 percent).
The return on discounted items can be particularly meaningful in some industries, Rosenthal said, as with cruise tickets.
The price range on any given ticker is determined by user activity in real time, and it might run faster or slower — or last longer — according to the same. The algorithm takes into account the total average margin targeted by the retail partner, and it’s looking to meet that against user behavior.
“It becomes like a multiplayer game. What I do has an immediate impact on you,” Rosenthal said.
Just like Black Friday, but without the scratch marks.