iStorez Takes Those Retail Newsletters Out of Your Inbox

istorez-logo.pngOne of the annoying things about e-mail marketing is that once you sign up for a few newsletters from your favorite stores, they quickly clog up your inbox. And those are the ones you opt in for. Add all the other retailers who somehow get your e-mail address and just send you digital flyers without asking, and it is no wonder more and more people simply ignore all of them. But when you are in a shopping mood and vaguely remember a sale for flat-panel TVs or kitchen appliances you saw somewhere, it takes forever to locate that particular e-mail newsletter again.

That’s where iStorez comes in, a new site that just launched today in beta. It takes all of those HTML e-mails that retailers send out and puts them on a Website where they can be indexed, searched, and organized. Anand Jagannathan, CEO of parent company Kriyari (his fourth startup—he also founded Banyan Systems and Responsys) argues:

The crux is e-mail marketing works. The reports show that consumers do respond to the shopping newsletters but email is the wrong medium. By aggregating thousands of newsletters on one site, then adding search, personalization and social networking, we have empowered consumers with a Personal Shopper that does all the work for them.

Actually, what he is saying is that e-mail marketing doesn’t work. You need to bring those messages to the Web and allow consumers to explore them in their own way when they are in a shopping frame of mind. On iStorez, you can shop by retailer or brand (Anthropologie, Brooks Brothers, J.Crew, Nike, Home Depot, Apple), by tag (jeans, Valentine’s, TVs), or customize your own virtual mall. You can also share a link to your mall on your own blog, Facebook, Myspace, Digg, Delicious, Stumbleupon, or various other social media sites. And in a few days you will be able to add an RSS feed with all the new deals from your stores.

I am not sure I’d go that far, but some people might, especially if iStorez ends up sharing the affiliate fees it collects with consumers who cobble together the best online malls. “That is the direction we are heading” Jagannathan tells me , “but we want to be a little careful.” Kriyari already does that with its storefront network, which lets Websites create custom shopping sections and shares a cut of the affiliate and CPA fees with them.

For iStorez, Jagannathan is playing around with different revenue models—affiliate deals, cost-per-click, cost-per-action (where the action is someone actually buying something).  He thinks he can get 5 to 15 percent of any sales he generates in apparel, for instance, on a CPA basis. Electronics would be much lower. “We place all the links with affiliate codes,” he explains. “Eventually, to the retailer it is as if someone clicked on an affiliate link, but with a different creative.” In other words, he is turning those image-rich newsletter ads into affiliate ads. On a cost-per-click basis, he thinks he can get $0.25 per click. Overall, he is aiming for an effective CPM of $30 to $50 (i.e., for every thousand people who see a given promotion).

Kriyari was founded in July, 2006 and raised $2 million in an A round from Norwest Venture Partners.