Monday Jan 13, 2014 by Dennis Keohane - Senior Writer, VentureFizz
Vee24, the e-commerce video chat company, believes that it has the recipe to bring as much of the positive experience associated with shopping in a store to the world of online shopping.
Talking to the company's CEO James Keller, it's obvious that Vee24 has a vision of bringing more customer/website engagement to the e-commerce experience, while at the same time, improving the vital sales, conversion, and satisfaction numbers of its clients.
Vee24 was founded in the UK back in 2007 with the thought that there was a huge opportunity to delivery a much better user experience for online commerce and online brands. The company built an impressive list of clients in Europe, but saw a chance to penetrate the American market; it set up shop in Kendall Square last year and added Keller (former CMO at Shoebuy.com) to run the operation.
As Keller explained, "Looking at the things that have always been part of great retail, in terms of providing great personalized service and being able to engage directly with customers to help them with all parts of their order, to bring that online can impact e-commerce performance."
Keller talked about how e-commerce has grown and how creating customer engagement is the vital, new trend in improving online shopping. As he said, "It's been about twenty years now since Amazon sold their first book online, but in all that time, we've only gone through one phase of having improvement from the "User Experience" standpoint. For a long time, e-commerce was one dimensional from a user experience standpoint."
In what Keller calls the second generation of e-commerce, he says, "We've seen lots of improvement to how sites engage with their customers: through personalization, big data, behavioral targeting, recommendation engines, and all kinds of things."
"There have been lots of gains in that way from a customer satisfaction standpoint, from a conversions standpoint," Keller continued, "but with all of that, even the best websites in a lot of categories are still only converting at the 3% level. So you have companies that are spending billions of dollars driving traffic to their website, but in most cases, 98% of that traffic is ending up on the floor and not converting."
To show how poorly e-commerce is performing in this regard, Keller compared the online conversion rates to in-store rates, where merchants are "routinely converting 20-40% of the customers who come into their store, and in some categories on an even much higher level."
"We looked at why is this is happening," he explained, "and we believe that a lot comes down to the ABC's of retail in terms of creating a very personalized customer experience."
Vee24 allows brands to engage with their customers directly over the web using voice, video, text, and co-browsing. "We are live with over fifty clients," Keller said, "including Audi, Vodafone, L'Oreal, Lexus, Ford, and some of the largest retailers in Europe."
Keller continued, "In all those cases, we do it in a way that has a very powerful impact on their online performance. For those retailers who were converting on a baseline 2-3% range, now, they are converting a minimum 10% of their assisted sessions, a lot of clients are even converting in the 16-17% range, and we even have some clients who are converting one out of three assisted sessions to sales."
Those improved sales numbers are very impressive and show the value of Vee24's assisted shopping services on sales numbers, but, as Keller explained, the assisted shopping service is also having a huge impact on merchant's bottom lines.
"[Vee24's clients] are not only converting a much higher percentage of traffic, but they are also getting customers to spend much more when they do buy," he said.
"On average, we see 25-30% lift in average order value, but in some cases, we have clients who are seeing a 100% lift in AOV with assisted sessions."
Customer's are also much happier shopping online using Vee24's voice, video, chat, and co-browsing services. As Keller explained, "We believe it represents a major shift in what they can do online. The customer satisfaction rates are fantastic."
Keller added that Vee24's clients are seeing some remarkably high post-session satisfaction rates, where customer's are responding to the experience by ranking it consistently in the 9 out of 10 range. "Those are just extraordinary results in retail."
"I was looking at one customer the other day," he commented, "who had thousands of surveys they've taken with customers after the assisted sessions, and they were averaging 9.6 out of 10. A lot of that is because it is a very fresh, very new experience from an online customers standpoint."
"Combine that with the fact that it is very tangible in how its impacting sales with our customers," and Keller believes more clients will see the complete value of implementing Vee24's products.
Vee24 raised a $5.5M Series A in the summer from Scott Savitz's Data Point Capital, with Sean Marsh ofPoint Judith Capital joining the round. The move to shift its headquarters from the UK to Kendall Square is so that the company can begin to have a larger impact in the US market. As Keller said, "We have had fantastic success so far."
As for setting up shop in Boston, Keller was clear that the robust tech ecosystem was the main factor in building the company in town. "Boston has become a real e-commerce hub," he said, "with a great concentration of e-commerce companies between Staples, TripAdvisor, RueLaLa, Wayfair, Shoebuy, and Karmaloop, and a lot of companies coming along, and there is a great talent pool in the innovation community more broadly."
"We think it's a fantastic place to be."
As for what's next, Keller explained, "We are continuing to do a lot of work on the product, building the team, but its all about ramping up the sales and marketing here and in Europe."
"To date, the focus has been on the product," he said, "and it got us to a place where we are truly differentiated now, and we are the number one player in this category."
("I think you'd be hard pressed to find anybody else who has a single customer that is doing what we are doing, let alone the fifty that we have now," he added.)
"At the same time, we really haven't been focused on building the great sales and marketing machine that can help us realize the potential we think this thing has in the marketplace," Keller concluded. "So that's a big focus now."
As Vee24 continues to grow and bring more companies into the fold, the impact that the company could have on e-commerce not only in Boston but beyond is exciting to think about.