Atlanta-based Saltbox, a co-warehousing startup, is rolling into the holiday season with a $35 million Series B from Cox Enterprises and California-based Pendulum. The funding wraps up a busy year for Saltbox, which more than doubled its warehousing footprint in order to help small businesses navigate ecommerce logistics.
The two firms, co-founder Tyler Scrivens told Hypepotamus, “understand the rigors of investing in and building complex businesses with long maturity horizons as is the case with Saltbox.”
That guidance and funding will be crucial as Saltbox looks to continue its growth in an ever-changing ecommerce landscape. Having survived the pandemic, supply chain shortages, high shipping costs, and hiring crunches, brands are now facing waning consumer confidence and high inflation.
It was also a favorite topic for Hypepotamus readers this year. Some of our most read articles from 2022 included the launch of the D2C ecommerce brand PCKL, Freeing Returns’ seed round, and a behind-the-scenes look at Saltbox’s new physical location.
It was a year of evolution for the ecommerce and general RetailTech space. So we wanted to take a look back at what happened over the course of 2022 and how Southeast startups transformed to meet the moment. A few key trends stuck out around what is driving innovation in the sector:
Ecommerce Trends We Noticed
Community Building Takes Center Stage
The local brands we chatted with echoed a common refrain: Inflation has certainly impacted business revenue over the last few months. But it isn’t all doom and gloom.
Just talk to John Roman over at BattlBox, a monthly subscription box service that launched in 2015 for survival and outdoor gear enthusiasts. Beyond just shipping products, Roman said BattlBox has focused recently on creating community and additional curated content for its members.
“Consumer behavior continues to evolve. Consumers want to identify and feel community with the brands they purchase from. Most brands fail at this,” Roman told Hypepotamus. “I think smaller ecommerce businesses that have failed (or are not working on) building a community and a brand will feel the brunt of this recession. Increased advertising costs makes it even more difficult for these smaller businesses to get the eyeballs on their product they need.”
That focus on customer loyalty was crucial as brands like BattlBox looked to navigate the external pressures of price inflation and general economic uncertainty.
“2022 was a challenge. Keeping the momentum going from such a strong 2021 was no easy task. We had to raise our prices this year due to inflation which was not something we wanted to do. Fortunately, our customers understood and supported the change,” added Roman.
Some brands turned to new technologies in order to build community.
Richard (Ronin) Rivera (Ronin The Collector, as he is known in the industry), helps enterprise brands move into the NFT space with Atlanta-based startup GigLabs and its specific product platform Gigantik.
For Rivera, it is important to “help brands really understand the technology and understand how they can implement it within their current business strategy.”
It has been particularly powerful for fashion and sports brands, said Rivera.
“It’s about opening up the lines of communication with their clients and their consumers in a new way,” he told Hypepotamus.
There is still room for more players
With giants like Amazon, Shopify, and Etsy, it can feel like you can buy just about anything online. But the shopping experience isn’t always the greatest for consumers or smaller retailers, leaving the door open for innovation both on the consumer and the brand side of the equation.
Nicole Rufuku, CEO and co-founder of Goji Shop, saw an opening in the ecommerce market for a new type of platform once she became a parent.
“When I needed to buy something for my daughter, Google just sent me to read an endless list of listicals and other blog posts. There are just too many products to choose from at this point, and legacy tools like Google search aren’t that useful when you need to buy something that takes some thought and research. That’s why Goji is solving what we call the problem of “the infinite shelf”. Shoppers want to be more thoughtful and intentional about the products they buy, but they don’t have the time to do research themselves. That’s where Goji comes in – we get to know you, then curate products for you,” Rufuku told Hypepotamus.
Goji Shop works as a shopping recommendation platform for busy parents looking to find the best items for their babies. It is a “personalized curation layer” for ecommerce, Rufuku explained.
The platform also helps brands navigate the ever-changing ecommerce landscape.
“Brands and retailers are facing headwinds due to Apple’s privacy updates which make ad targeting and optimization difficult,” she added. “That means they need a new way to find new customers, and we think the next wave in marketing will center around personalized and human-powered curation. Influencers will continue to benefit, but so will platforms like Goji which center human-powered curation.”
Other startups are also getting off the ground to change the nature of how we shop. In Atlanta, Hiihat has launched as a marketplace and search engine to find Black-owned businesses, joining a growing list of specialty ecommerce sites.
Other brands are embracing the circular economy model as they work to scale. One such startup is Rent-a-Romper, a convenient and affordable platform designed to keep parents from wasting money on quickly-outgrown baby clothes.
“I think we’re at such a critical time [in ecommerce]. Parents are overwhelmed. There’s so much to do, they’re constrained with inflation costs…and consumers are changing their mindset around sustainability. But big retailers are really having to rethink the traditional way of doing business, so I think we’re really primed to fit in that space well,” founder Lauren Gregor told Hypepotamus. “We’re helping retailers reshape how they interact with their customers and how they use their inventory.”
Where Ecommerce goes next
What’s next for ecommerce innovation is an open question. As recession fears loom, energy costs increase, and businesses work through an uncertain inflationary environment, brands focused on fulfillment and automation might have an advantage. Several investors in the space told us they are focused on the automation and AI portion of the industry, while also looking at startups focusing on shipping and delivery innovation.
In terms of brand engagement, Rivera over at GigLabs also has a prediction. Moving into 2023, he expects more brands will have to find innovative ways to increase “loyalty, rewards, and customer retention and acquisition.” That could put Southeast startups in a unique position for growth, as the region has become a hub for marketing technology (MarTech), media, supply chain, logistics, and consumer brands.