A fledgling Palo Alto startup is trying to tackle a difficult 21st-century challenge: bridge the ever-widening gap between local brick-and-mortar businesses and the booming world of mobile commerce.
The bridge comes in the form of Downtown, a mobile application-marketplace where local businesses, large and small, can list a curated selection of their top-selling items for customers to peruse and purchase. This could be a pair of shoes from footwear-and-clothing store Keen Garage, a USB cord from the Apple store, a caprese salad from Coupa Café or a dozen cupcakes from Kara’s Cupcakes.
After purchasing, users can opt to have their goods delivered for free or to pick them up in the store the same day.
“There’s so many advantages of physically going to a store or having something from a local store,” said Downtown CEO and co-founder Phil Buckendorf, a German entrepreneur who came to the United States about a year ago. “Maybe we can reinvent how local commerce works so we can give the little guy from High Street a comeback, and he can catch up because he’s (now) on a technology level (that’s) competitive with Amazon and other online marketplaces.”
Buckendorf explained his vision of the free, iPhone-only app as a virtual version of a physical downtown where stores congregate and share customers.
“We said, ‘Well, what does the real world look like?’ It’s all these stores and they try to be centered somewhere, which in this case is University Avenue, because they share customers. So this coffee shop is sharing customers maybe with Keen (Garage) or with Alegio Chocolate or with Apple. There’s a reason why in the real world they bundle with each other and locate around one street.”
Downtown aims to be a reflection of Palo Alto’s real downtown, with a small list of local stores that rotate depending on the time of day (and at some later date, the user’s location). Open the app in the morning, and there will be breakfast-centric places like Coupa or La Boulange; later in the afternoon Keen Garage, Whole Foods or macaron boutique Chantal Guillon might pop up. Photos accompany each store and item. The prices are the same as they would be in the brick and mortars (though they might look different because they include normal taxes); there are no delivery fees, taxes or tips.
As is, the app mostly draws from the downtown area, but California Avenue Italian restaurant Terun often shows up at mealtimes. Downtown currently operates Monday through Friday, 11:30 a.m. to 9:30 p.m. in the 94301, 94303, 94304, 94305 and 94306 zip codes, but hopes to expand in the future.
With the user in mind, there aren’t more than 10 or so items available for purchase (or even less) from any store, Buckendorf said.
“The things we have learned is that there’s a significant difference between mobile commerce and e-commerce,” he said. “When we see consumers shopping from mobile applications, they do not like to search for things or scroll through a lot of content. This is a step which has to be done by us or by the store before the customer starts shopping. Because if there’s just too much content, which is not appealing to the customer, he will just close the app. It’s not in the interest of the store nor the customer.”
Robbin Everson, owner of the Bryant Street boutique chocolate store Alegio Chocolate, said Downtown has particular appeal for her as a small-business owner who struggles to compete with e-commerce giants like Amazon.
“I was intrigued by it because (mobile exposure) is an area that small-business people have a need for,” she said.
The delivery option is also a huge boon for small companies. She said Alegio tried doing deliveries from its Berkeley store and gave up because it took time and resources the company simply didn’t have.
As the Downtown startup is a small team, Buckendorf and another team member are currently doing the deliveries themselves. He said their delivery time is an average of 30 minutes.
“In general, retail is kind of at an inflection point right now,” said Brad Fuerst, retail director for Keen Garage, which also operates stores in Portland, Prague and Tokyo.
“What Downtown really enables us to do is to integrate our mobile (and) our online to our brick and mortar, which is going to be more so the case as more people, especially in Palo Alto, will be shopping on their mobile phones. The ability for Downtown to satisfy same-day delivery is a pretty large competitor advantage for us.”
Downtown is also sales-based, so the companies who list their products on the app do not have to pay any fee to do so. Downtown has partnered with some of the stores — not all of them — and from those partnerships, collects a small commission fee, already included in the credit-card fee.
“This is excellent too because small-business people struggle financially and most other venues charge a monthly fee,” Everson said. “It’s all based on sales. That’s why promotions such as Groupon have an appeal too, because there’s not an outlay of capital, which none of us have. It’s all going into product, people and stores. So this is something that could do very well for small-business people.”
There is going to be a never-ending competition for providing new services, linked to, or driven by, the Internet. Google has been experimenting with same-day delivery:
http://www.mercurynews.com/business/ci_24171776/exclusive-google-same-day-delivery-makes-public-debut
which would tend you give customers a much wider selection of sources than a small downtown, like Palo Alto’s.
Yawn…. Why does every two-bit app developer claim to revolutionize the way we (add insignificant task). I’m all about progress but really, the junk getting thrown out today is laughable. Let’s get back to making something real, instead of selling platforms for marketing. Advertisments won’t make the world go round. We need to build things. I for one cannot wait till this pseudo-tech crap implodes and people get realistic about technology. And unless your still a teen and don’t understand how the world works, Facebook is an elaborate platform to derive your personal information and sell it to advertisers. No more, no less. Let’s save our future generations by encouraging them to switch off Facebook for good. A fruitful campaign for all the organic do-gooders in the bay area.
Making this app iphone-only is a huge mistake. The little screen on an iphone makes it too hard to see what you are buying and the text is too hard to read. Put this app on the web so I can read it from my laptop and I might try it.
Hmmm… I don’t really want someone to take away my brick-and-mortar shopping experience, which is a nice real-world break. I want a personal assistant who will fix the 30% of things that develop problems within the warranty period, box them up, send them back, pick them up, call customer service, whatever – and instantly make the right one reappear at my doorstep without my having to pay extra for THAT.
Some common app where they would realize that crack in the plastic by the mic in my otherwise pristine and carefully handled iPad is a built-in problem (without having to go down to Apple and be told otherwise, only to find there are discussion threads where many, many people have had the same problem and most of them were treated better than I was).
See, most of these things that want to “revolutionize” come with an unspoken promise of indeterminate time cost for users. Tech companies need to start thinking about “Temporal Ergonomics” – how does what you are doing allow the ordinary person to have better control of their TIME overall, how does your product allow me to spend MY TIME the way I want to spend it?
Making it easier for me to have a backlog of things I have to return around town is not that helpful. Someone else does the shopping for me, the only part that’s fun, I still have to deal with the returns. And updating the computer, keeping the mobile device backed up, keeping track of all those apps, etc. On balance, it’s not a time saver.
Making all the companies produce a receipt, paper or e-receipt, with standardized information in some form (even if the rest of the receipt is whatever they want it to be), plus a scan bar to input all of it instantly and check it against the printed info, so that when I am doing my taxes, or medical bills, or wanting to return or fix something under warranty, I can eyeball all of them rapidly and find what I need — or have Apps that handle all that electronically and instantly — now THAT would revolutionize my accounting.
A tech company that finds a way to incentivize all companies adopting such a standard box of information on receipts (date, item, amount, business, in a standard font, etc.) without the government having to make a rule the way they had to to get us to all sign our checks in the same place for the banking industry — even better.
Where’s the business model in that? I don’t know. There wasn’t one in UPC codes, but the results were great for business. All I know is, I’m fed up with more complexity and time sinks. Start paying attention to giving me control of my time, NOT more stuff.
And maybe then I’d have a little more time to spend an afternoon at the store and look for those shoes I need. My loafers have holes in them!
The trouble is, all these tech companies fail to see how their products fit in the context of real people’s lives! Who is doing the research and making the tools to allow companies with new products to better judge THAT, to judge Temporal Ergonomics? Again, that’s what *I* would find revolutionary.
The bar for being an “entrepreneur” just got lower.
Too little, too late!
Calm down everyone!! Its nice to have choices; there is no such thing as “one size fits all”, and its likely that this new app and approach to shopping will find an audience. Hope so.
Nothing new here. This has been tried before with mixed success. Just another entrepreneur trying to use Palo Alto Online to promote their product.
Maybe the Save Menlo people could invest, because the way things are going they could use some people in Menlo After Dark
I HATE shopping online…REALLY HATE it. I enjoy shopping in stores, seeing merchandise, feeling fabrics, seeing actual colors, trying things on so I know they fit.
I HATE buying something and having it arrive wrong color, cheesey fabric, sleeves too short–so I have to repackage it and send it back. Ugh. I HATE buying food online. Groceries MUST be checked for quality.
I HATE all of the packaging material that accumulates from mail order deliveries. My shopaholic next door neighbor fills a bin with that crap every week.
Stores are handy when you need something in a pinch. Good stores have intelligent service people who can help you quickly find what you need. Good stores make returns and exchanges quick and easy. Online returns and exchanges can take many days. Good stores can help you get your purchase custom tailored.
YAWN! I’m bored with online shopping. The nerds have created a online world that feels comfortable for THEM. Shopping in the REAL world is more interesting, fun, and more efficient. The smart brick and mortar people invent shopping spaces in the real world that are interesting and SOCIAL places. They’ll get my sales dollars.
@Bored with online shopping,
I still do it, but I’m with you. Ever since some of the brick and mortar stores started offering price matching, I find it easier to give them a call, ask them if they’ll match a certain online price – usually they find it faster than I do – and have it the same afternoon.
I never buy camera equipment online anymore because of it. Keeble & Shuchat carries everything, I can look at it in the store, and I can buy accessories, get info, etc, all for the same price as online. And I don’t have to plan ahead if I need an extra battery or whatever.
Some things, like party supplies/helium in tanks for balloons, or many personal care products, are actually consistently cheaper and easier to get in brick and mortar stores around here. It’s easier to see what you’re getting, read the ingredients, etc. And it’s way more fun.
It’s also possible to find amazing sale treasures in stores that are just hard to put in context online. I just bought some beautiful Land’s End sweaters on clearance at the Land’s End store in the Vallco Sears, originally almost $80 sweaters, very high quality (Land’s End is already a great value to start) for $15 each, and some really nice turtlenecks for next year for $5. Even in the online clearance sections, it’s impossible to get one-of’s like that. I suspect one of the clearance sweaters was a display – who cares, it was $10 for a fine cotton cableknit, and it fit me! It was the only one. That’s hard to do online.
And sometimes even if the store has a slightly higher price, I pay it anyway, depending. We bought a small pet recently, and the house and pet bedding were more expensive in the pet store, but I calculated in my mind the bottom line difference, and seeing as I had just gotten a way-better-cared-for pet in a store that specializes, than at the local big box, I figured the difference was well worth it.
Well that’s my 2cents…