Operator, created by Uber Co-Founder Garrett Camp, is a new platform that connects customers with experts to provide a new and personal way to shop. This “request network”[i] allows customers to text message with experts to receive recommendations, browse hand-curated collections, or simply execute requests like buying a new coffee table.
Similar to Uber, this platform is asset light and uses digital technology to match shoppers with tastemakers. The app provides a secure and seamless mobile shopping experience and purchases can be tracked through delivery. Returns are simple and a price match guarantee ensures the lowest price is received[ii].
Operator’s use of mobile messaging (the dominate way people now communicate) reflects a shift in the e-commerce space. “People are busy, on the go, and don’t feel like researching purchase options or typing in payment info on their phones. They just want what they want.”[iii]
In addition, this platform provides a launching pad for stylists to start their own business and access an expanded virtual customer base. Experts can “plug in” whenever they want to work, have access to a creative community of tastemakers, and are paid when their recommendations are purchased. Currently, expertise is categorized into six categories including fashion, electronics, home goods & décor, beauty, sport & fitness, and gifting.
Operator dials China
After launching in 2015 and struggling for viral success, Operator’s latest Series B funding round of $15M is pivoting to focus on the Chinese emerging middle class. Chinese consumers shop online for authentic imported products through cross-border e-commerce sites which “amounted to an estimated 259 billion renminbi ($40 billion) in 2015, more than 6 percent of China’s total consumer e-commerce and it’s growing at upward of 50 percent annually”[iv].
Operator will target consumers who want authentic American products but may have trouble reading English reviews. “With Operator, Chinese citizens will be able to text chat with a human shopping expert from the US with Chinese language skills. They can show the customer products that fit the price, quality, and style they’re looking for, even if the buyer is unfamiliar with US brands.”[v]
Cross Border E-Commerce: Windfall or Woes?
People love personalized services, especially when they are easy to use and free. However, pivoting to China is a high risk move for Operator. Regulations for cross border e-commerce were recently tightened by the Chinese central government which reduced the tax free benefit down 70% from the original incentive used to encourage growth[vi]. In addition, Chinese customs were directed by Beijing to increase inspections to reduce illegal goods.
These changes could significantly increase the costs of products imported to China and make them less attractive to consumers. In addition, Operator is looking to compete in the on-demand economy but logistics of shipping products to China, even using air will require multiple days, not hours – the current standard Chinese consumers expect.
This leads one to ask: has Operator truly established a viable business model? Will they be able to create a network effect with a shift in geography or are they just not adding enough value to clients? Focusing on Chinese consumers could be seen as forward thinking given projected demand. It conversely could be a “Hail Mary” play that puts too much stress on their operating model resulting in failure to deliver on their customer promise
Curated Experiences for Millennials
While the jury is out on geography, Operator should revise its categories of expertise and extend its model to focus on experiences. Apparel and beauty are littered with subscription box of the month models that promise personalized style and deliver varying degrees of execution. However, gifting as a category offers Operator an opportunity to differentiate and appeal to millennials in order to reach scale.
Gifting provides an opportunity to extend beyond products and provide services and curated experiences that millennials value. “A study by Harris Group found that 72 percent of millennials prefer to spend more money on experiences than on material things.”[vii] Startups likes Bluedoor are providing corporates with a range of experiences to reward high performers and are indicative of this growing trend. By tapping into millennial fear of missing out (FOMO) which “nearly 7 in 10 (69%) millennials experience”[viii]. Operator can provide a differentiated and attractive value proposition worthy of viral social media fame.
[i] techcrunch/Josh Constine. 2015. First Look At Uber’s Co-Founder’s Shopping Concierge “Operator”. [ONLINE] Available at: https://techcrunch.com/2G015/04/22/the-request-network/. [Accessed 17 November 2016].
[iii] VentureBeat/Michael Quoc. 2016. The state of bots: 11 examples of conversational commerce in 2016. [ONLINE] Available at: http://venturebeat.com/2016/06/16/the-state-of-bots-11-examples-of-conversational-commerce-in-2016/. [Accessed 17 November 2016].
[iv] Xia, C, 2016. Cross Border E-Commerce is Luring Chinese Shoppers . McKinsey Quarterly, [Online]. China Pulse, 1-2. Available at: http://www.mckinsey.com/industries/high-tech/our-insights/crossborder-ecommerce-is-luring-chinese-shoppers [Accessed 17 November 2016].
[v] techcrunch/Josh Constine. 2016. Operator harnesses chatbots, humans, and $15M to sell US goods to China. [ONLINE] Available at: https://techcrunch.com/2016/09/22/operator-dials-china/. [Accessed 17 November 2016].
[vi] SCMP.com/Celine Ge. 2016. China’s cross-border e-commerce trade facing uncertainties amid government regulation. [ONLINE] Available at: http://www.scmp.com/business/companies/article/2017646/chinas-cross-border-e-commerce-trade-facing-uncertainties-amid. [Accessed 17 November 2016].
[vii] CNBC.com/Uptin Saiidi. 2016. Millennials are prioritizing ‘experiences’ over stuff. [ONLINE] Available at: http://www.cnbc.com/2016/05/05/millennials-are-prioritizing-experiences-over-stuff.html. [Accessed 17 November 2016].
[viii] CNBC.com/Uptin Saiidi. 2016. Millennials are prioritizing ‘experiences’ over stuff. [ONLINE] Available at: http://www.cnbc.com/2016/05/05/millennials-are-prioritizing-experiences-over-stuff.html. [Accessed 17 November 2016].