WinBuyer develops solutions for online retailers to maximize retailer page revenue (RPM) and turn traffic into sales by improving the consumer experience and making online customers feel confident about their purchases. WinBuyer’s initial monetization product, an onsite comparative pricing (OCP) application that shows the various prices a product is selling for, is embedded in a client’s site on the product detail page.
WinBuyer, which is headquartered in Tel Aviv with offices in London and Scottsdale, Arizona, was founded by Miki Balin, who is currently the company’s president. WinBuyer evolved from Conversion Methods, an e-commerce startup Balin founded in 2004. He has devoted much of his career to managing marketing-related ventures. Prior to establishing Conversion Methods and WinBuyer, he founded Balin, Adatto & Cohen, a health care consulting and advertising firm in Israel.
When Balin become involved in the market in 2004, shoppers were already visiting multiple online retailers before making a purchase decision, and other shoppers were visiting online comparison shopping Web sites such as Shopping.com (then Dealtime.com), but there was still an opportunity for online retailers to improve their reputations and increase customers’ trust in them while also increasing revenue by enabling shoppers to see competitive offers directly from the product page. One of the greatest early challenges of online shopping was the lack of human interaction. Even though leading retailers already used online chat, it didn’t create the same experience of talking with sales people at local stores. Providing comparative pricing, something that was not intuitive, was one way that online retailers could build relationship and gain shoppers’ trust. All consumers already comparison shop, reasoned Balin, so why not just offer them the opportunity to do so directly on the retailer’s product page?
The company’s OCP application is designed to boost conversion rates and increase a customer’s virtual shopping cart size; extend the length of a customer’s visits on product pages; maximize brand influence; monetize unconverted traffic through referral revenues; and increase consumer trust and retailer confidence. In a survey conducted by WinBuyer, participating stores reported an average lift of 2% on pages with the OCP application, a conversion-to-sale increase of 4.9%, and an average order value increase of 3.2%.
Aside from WinBuyer clients, there has been a jump in the number of retailers who use comparative pricing on their sites over the past year, for example, Backcountry.com and Tigerdirect.com, while retailers such as Amazon and Buy.com have been quietly using this strategy for several years. Bricks-and-mortar retailers are also turning to OCP — this year the department store Sears began offering OCP-type capabilities within its physical stores, and it just opened an onsite marketplace that lists external vendors.
WinBuyer believes that its competitive advantage stems from its six years of experience, its technology and its methodology. Though large e-commerce companies such as Amazon or eBay can (and are) creating their own OCP solutions, smaller retailers wouldn’t commit the resources to develop their own solutions. And given the competitive nature of online retailing, smaller retailers are also not likely to use an OCP solution developed by Amazon or eBay.
There is no one top target segment, but WinBuyer is most effective in commodity markets where product SKUs (stock-keeping units) are clearly defined. The company says that it generally does well in any category with an easily comparable and normalized product structure. WinBuyer has more than 200 customers and gained traction with online retailers such as Overstock.com. Using Forrester forecasts for the U.S. online retail market, WinBuyer estimates its TAM, which includes OCP for product categories and individual products, at about $1 billion in 2010 and almost $1.4 billion by 2013.
WinBuyer had 2009 revenue in excess of $1 million and is entering the profitability stage. The company raised a seed investment round in 2007 and a $6.9 million Series A led by Pitango Venture Capital and joined by Giza Venture Capital in November 2009, money which WinBuyer says gives it a long and comfortable runway.
The company hopes to exit through an IPO, although there is no timeline for this at present. Rather, WinBuyer plans to continue penetrating the online retailing market for its OCP application and increase market share among online retailers selling commodity products; broaden the OCP offering to run on pages where it serves as a source of advertising revenue for that publisher (this could be product review pages, for example); and add promotional opportunities and provide broader matching to include a greater range of products.
This segment is a part in the series : Deal Radar 2010