A new wave of online retailers is cropping up, and they're taking an opposite strategy from Amazon.
That stands in stark contrast to e-commerce giants likeBoth Brandless and Public Goods have experienced some success, but it's unclear how much runway they have.Shoppers looking for a wide range of items — spatulas, paper towels, dog treats, or pasta, for example — will see a wall of results ordered according to a secret algorithm and, in many cases, ad sales.
"What we hear a lot is that there's what we call the Paradox of Choice," Brandless founder and CEO Tina Sharkey told Business Insider during a recent interview."The idea that people are sort of standing in front of the aisles or on a website that carries everything, and they don't even know where to start."Instead of offering multiple choices, Brandless offers one own-brand choice.
"I wanted to build one brand people could trust so that they wouldn't need to sift through 1,000 options, but just have one good option that they could trust in each category," he said. Public Goods has an added wrinkle of a $59-a-year membership shoppers need to buy to access these goods, but it has a similar focus on"quality" goods, which for Hirsh means"healthy for people and healthy for the planet.", Brandless got a major $240 million shot in the arm in a funding round led by Softbank, which valued the company at more than $500 million.Brandless now sells around 500 items, according to Sharkey, who predicts they will sell 800 by the end of the year.
But there may be a limit to these companies' success, as Kodali notes that"the challenge is that these businesses are never big.""Because they're not big, Amazon may try it out," Kodali said."And we don't know how much longer shoppers will think this type of thing is new.""If people have seen something before, they're less likely to find it interesting," Kodali said.
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