While the idea of ‘online to offline’ for purchasing is proving to be powerful in the local commerce world, the trend of linking the physical world to the web is producing a number of startups that are innovating beyond just purchasing from local merchants or finding a product nearby. Many of the most interesting startups that have emerged over the past year or so are making our lives in the real world better; using data, location and curation as their competitive weapons.
And although these startups have presences on the web and mobile devices, they are also disrupting services in the physical world. So who are these startups that are taking the ‘online to offline’ trend to a whole new level? Below I discuss five different types of startups taking advantage of this trend: Uber, J. Hilburn/Trunk Club, Jetsetter, Getaround, Zaarly and Airbnb.
Take Uber, which allows you order a private car from an iPhone app at discounted rates. Basically, Uber allows you to order a black car to come to your location via the mobile app, and then watch it come to you as the app tracks the car via GPS. Payments are handled automatically by charging the card you have on file, and it costs at least 50% more than a taxi. The online to offline connection is obvious, as you order online for a car that picks you up in the physical world.
While Uber cars are more expensive, the benefit is that you don’t have to wait for a cab. All cars are town cars, so you’re getting a luxurious ride. Uber tracks all cars, so in case you leave something in the car, you’ll be able to track your car down. The startup has a loyal following in San Francisco and has since expanded to New York. And the service will eventually launch in Boston, Chicago, Seattle, and D.C.
The ability to pay and book a car online (based on your present location no less) and then use the car to arrive at a physical destination is no doubt disrupting the private car and taxi industries.
J Hilburn/Trunk Club
Want custom-designed clothes or a personal shopper to pick your wardrobe? No need to visit a custom tailor in your town or hire a stylist from Saks. J Hilburn and Trunk Club are two startups disrupting the men’s fashion industry and bridging the online to offline worlds.
J Hilburn offers an e-commerce site that allows men to buy custom-designed shirts and trousers online. The beauty of the site is that it offers designer-like styles for less. The company also employs a salesforce of 800 “style advisors” across the country, who make appointments to visit customers in their homes and offices. The advisors measure the customers, show them swaths of fabric, and help them select a few options. Revenue is growing fast, and men can find affordable custom made clothes by simple entering their measurements and sizing on the web, and have the clothes delivered to their door.
Similarly, Chicago-based Trunk Club offers men personal stylists to pick out clothing, which is delivered to customers’ homes. Men sign up via the website, pick preselected looks, and answer a small questionnaire with questions like “where do you shop right now?,” “what’s your favorite item in your closet,” sizes, price and color preferences and more. A stylist will then call/contact the customers via their preferred method of communication (many choose email). Once the stylist gets an idea of the customer’s style, he or she will send a “trunk,” of clothes and ship out via Fedex a handpicked collection of shoes, pants, shirts, and more. Clients keep the clothes they want and send back the items that don’t fit. You are only charged for the clothes that you keep.
Like J Hilburn, The Trunk Club buys clothing at wholesale and sells it at a normal retail markup. There are no sales/discounts on clothes and Trunk Club stocks its own inventory. Customers don’t pay anything extra for them as they would in a fancy department store.
Once again, an online experience is disrupting an offline experience in the physical world. In this case, Trunk Club and J Hilburn are making the physical acts of trying on clothes, finding custom made clothing and picking out clothes that match your style much more efficient by adding an online component.
Getaround, which just won Techcrunch Disrupt in New York, is a car rental market place where you can rent a car by the day, hour or week through a smartphone app. Getaround’s all inclusive package, which includes insurance, 24 hour roadside assistance, a Getaround car-kit, iPhone app and a web app makes it easy for people to conveniently car share anywhere.
While GetAround is still new, the model has a lot of promise. Getaround disrupts car sharing similar to the way Airbnb disrupted the home rental and hotel industries. Both link the ability to monetize sharing of a physical property.
As of last week, the company had already signed up 1,600 cars for sharing, which is 20 percent of car-sharing giant Zipcar’s fleet of 8,000 cars.
I am a huge fan of Jetsetter (and so is my colleague Sarah Lacy). The flash sales site for luxury travel has been innovating the hotel industry by allowing consumers to access the best hotels in the world at discounted prices. And the site goes beyond just commerce, even adding an editorial component to accessing information about hotels.
The company, which is a subsidiary of flash sales giant Gilt Groupe, has just unveiled a brand new service which essentially brings services of travel agents online. As Sarah Lacy wrote in her review, Jetsetter’s travel planning service is essentially a travel agent 2.0. Jetsetter is leveraging its network of more than 200 travel writers to help members plan itineraries for vacations. The service isn’t cheap. It costs $200 for three hours of consultation and a detailed itinerary, that their specialists will book and arrange for you at no additional cost. If you book a hotel through Jetsetter, you get $100 back.
While many people don’t use travel agents anymore because booking is so easy online, many travel booking engines miss the personal curation that that travel agents provide.
Airbnb, which launched in 2008, has been disrupting home-sharing for over three years now. As you may know, Airbnb lets anyone that owns space fit for accommodating travelers, whether that’s a couch in a small apartment or entire villages, post that space as a listing on its website and connect potential renters to its respective owners.
The company takes the physical act of renting rooms or spaces in other people’s homes and makes it much easier for users to access this online. The platform grew 800 percent in 2010, and is now being valued at $1 billion.
Airbnb is one of the best examples of a company that brought an online component to a real-world action. And Airbnb continues to disrupt additional markets as well. While there have been bumps in the road, the startup’s success is a testament to the power of the online to offline model.
Backed by an impressive list of investors, Zaarly, a web and mobile service that connects buyers and sellers in a localized market place. It’s sort of like a mobile-centric reverse Craigslist service.
On the site or via the startup’s mobile apps, you post what you’re looking for (i.e. cupcakes), how much you’re willing to pay for it and how soon you need it. Zaarly will then share your request in the local community through the platform, and also allows you also post your request to Twitter and Facebook.
People or businesses nearby can access and see your request and then anonymously message each other to complete the transaction of delivering the cupcakes you want. Sellers bid for the tasks, and the buyer chooses the best one, with Zaarly connecting the two via an anonymous Twilio-powered phone number. You can use cash or Zaarly’s integrated credit card payment system to pay for the transaction.
Zaarly just launched less than a month ago, so it should be interesting to see if it can find the success that Craigslist experienced.
These are just a few of the startups which are making improving our lives by linking the offline world online. Of course, the idea of linking the physical world online isn’t a new phenomenon. OpenTable and CraigsList have been doing this for years.
But of late, there’s been a proliferation of startups that have adopted the OpenTable or Airbnb model of linking online to offline that have emerged. These startups are continuing to disrupt industries, such as car-sharing, customized travel planning, personal shopping, and more that have not had strong online presences. Essentially these startups make industries in the physical world more efficient, and thus make our lives better. The consumer is empowered with a better experience with the addition of a mobile technology or a web-based platform that saves time and sometimes money as well.
There’s no doubt that this trend will certainly continue as more startups bridge online to offline. It’s just a matter of which industry will be disrupted.