Main Street vs. Wall Street How a 4-person web design firm united 200 indie stores against a $40m competitor
What if someone said that they're spending $40 million to beat up your small business? That's what new online gift registry retailer Zola plans to do. (Please see attached NY Times picture.) Gift registries are the last refuge of small, Main Street businesses and Zola has borrowed (in the banking world they call it "raised") $40m to swipe this registry business. Zola is backed by the same Wall Street investors that helped Instagram and the insurance company Oscar. Essentially, they're Ivy League guys with MBAs with rich connections that live in Manhattan and see the rest of America as more of a market than a group of Main Streets. Bridge, an online gift registry platform used by small and mid-size retailers, would like to raise awareness about this and get the leading voices of our industry to support Main Street. Using technology, supporting Main Street can be just as easy and cost efficient as dealing with a Main Street killer. Why not just let the "best man" win? Because it's not a fair fight when one side has $40m from Wall Street.
To overcome this David vs Goliath scenario, I think Main Street shops need more support from two entities: the suppliers and the publications.
Let's take a second to chat about how some suppliers are helping Zola's rise. We have to ask: how can Zola sell the same name-brand product that indie stores sell and make a profit? For the most part, Zola doesn't stock goods. It drop ships. Whereas indie stores have been historically been required to stock product, have an open minimum order, and place a minimum re-order, Zola is skipping many of these requirements. Ideally, suppliers would give retailers the choice of these same terms. The reason why suppliers don't want to do this is they want to have their cake and eat it too. They know that they need physical retailers to stock and show items and let customers pick up and feel the items. Then shoppers can buy the item online from a Wall Street-backed website. The indie store is the 'showroom.' The online entity gets the order. The supplier wins.
There is hope that suppliers can help Main Street. Using Bridge's technology, more than 100 suppliers (also known as brands) enable 200 indie stores to compete against Wall Street-backed sites like Zola. These suppliers pay nothing and share their 56k+ products--that's six times what Zola offers--in real time with their stores. This saves the stores a lot of man power and employee costs. The suppliers may also offer Bridge members better terms, such as lower re-order amounts and lower drop ship charges.
In terms of publications, two months ago an industry publication wrote a glowing article about Zola. This may not be surprising since the magazine regularly gives Amazon.com a hall pass and praises it. An editor at the magazine said that small businesses are destined to "march to extinction" (who would talk about their readers that way?). I hope that our industry's publications will start giving more of a voice to small businesses and their needs vs. Wall Street internet players that have a much bigger bank roll but many fewer readers.
That brings us to the consumer. How do we give the best experience to the bride and her friends and family? Bridge offers Main Street stores an online registry filled with up to 56,000 products that can be added to registries and purchased online. Thousands of brides have registered on our software and 1000's of customers have used it to give a gift. Stores pay as little as $0/month. I have to wonder: what is Zola doing with the $40m? We accomplished all that we have for pennies on those millions. We've created 200+ "Zolas" across the country that contribute to their local communities.
We've built Bridge from scratch into a network of 100s of businesses that will sell $10m this year. Our vision is to be a platform--and voice--for everyone in the retail chain. I wonder what we could do with a $40m war chest? We'd use Wall Street money to boost Main Street vs. kill it. In the meantime, we have some really great "investors": happy retailers, happy suppliers, and happy brides.