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Lainie Herrera founded e-commerce company Scoutfit out of necessity. An avid Internet shopper, she spent too much time looking for sales. After waiting in frustration for a coveted pair shoes to go on sale she thought, “Why can’t I just press a button and have the Internet tell me when these are on sale?” From this question, Scoutfit was born.
Scoutfit just launched to the public this November and recently won Digital LA’s Startup Showcase competition. The technology allows consumers to track or ‘scout’ item prices from popular e-commerce sites like Amazon.com and Nordstrom.com, and even niche retailers like Nastygal.com and Nectar.com. Here’s how Scoutfit works: when a chosen product falls below a set price, Scoutfit sends consumers an email alert, even sending an email when an out-of-stock product is replenished. This tool gives online consumers the ability to track and buy products confidently knowing they have not missed a sale, said co-founder and CEO Nathan Liu (shown here pitching at Digital LA's Startup Showcase).
But Scoutfit doesn’t just offer consumers a shopping advantage, it also helps retailers better target their discounts. Liu, who previous worked and helped run promotions for retailer PacSun, said he understands this issue all too well:
“My biggest problem was if I have to give a promotion I have to give it to everyone- including those who would normally pay full price,” Liu said. “This is not a good way to price discriminate.”
Indiscriminate promotions are a very costly marketing tactic for retailers, but by working with Scoutfit, Liu believes retailers will be better able to target price-sensitive consumers.
This retailer-Scoutfit partnership is where Liu sees a potential revenue stream: Scoutfit envisions commission deals with retailers by gathering data on its price-sensitive consumers, tracking their tastes and marketing discounts to them. The rest of revenue will likely come from native advertising, Liu said.
Liu believes Scoutfit will also be a valuable tool for boutique retailers, as Scoutfit’s intimate consumer knowledge will offer an opportunity to match consumers with new products.
This wide-ranging vision for the potential of Scoutfit is what the company believes gives it an advantage over its rivals. Price-tracking is also offered by New York-based company Hukkster, however, Scoutfit has several additional features its competitor does not: including a recommendation engine tailored to a user’s tastes and price point, and a window feature that gives users promo codes for products. Plus, this month Scoutfit plans to roll out a social element to their website that lets users follow friends and other users with similar tastes.
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Image courtesy of Scoutfit
As Scoutfit continues to grow and eventually seeks seed funding, it is eyeing the launch of a mobile app in March 2014, which Liu said he thinks “will be bigger than the website.”
Beyond that, Scoutfit sees itself helping shoppers judge the real value of sales. Scoutfit wants to make use of the large amounts of retailer data it is collecting by displaying predictive analysis on any promotion. Herrera, co-founder and director of marketing, said “we would love to tell people 25 percent off at The Gap is not the best deal and they could do well to just wait.” This predictive analysis would likely also tell consumers when they come across a rare deal as well.
With e-commerce sales projected to grow by 14% over the next three years to $440 billion, shoppers will need even better tools to find their way to the best deals. Similarly, retailers will need better tools to parse this swelling sea of customers. Scoutfit may change the game for both parties.
