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Just.coms Seduce VCs

March 31, 2005

According to an a:c mole who recently made a tour of Sand Hill Road, VCs have become captivated by vertical eCommerce plays such as Zappos.com (just shoes), eBags (just bags) and AllPosters.com (just posters). The trend reminds us of an obscure, randomly humorous Saturday Night Live sketch where Bill Murray clerks at a mall storefront called Just Scotch Tape, and scoffs at customer expectations of selection by refusing to stock masking tape or duct tape, and indeed carries Just Scotch Tape.
bill murray2.jpg
No Mam, Just Scotch Tape, just carries Scotch tape.
Proponents of vertical eCommerce say that the rise of keyword search buys and disappointing customer service at Amazon and eBay, give specialty online stores new advantages. Vertical storefronts enable marketers to more easily highlight specials and get customers to what they want with the fewest clicks. Moreover, the collapsing costs of eCommerce infrastructure mean that more capital can be put to use on marketing. Recent travails at the Web 1.0 eCommerce company, publicly traded Red Envelope, provide more evidence that broad selection online is, in fact, tough to pull-off. Red Envelope sells jewelry, gifts, and other items, but is not known for any particular items or service. It may just be known for being more pricy than other services, while offering fancier packaging in exchange. The CFO of the company stepped down when the profit he predicted for the latest quarter turned into a $3.5M loss – the 3rd loss in the past 5 quarters. The stock fell nearly 30% in one day. Perhaps they should reorg and go by Just Envelopes.
Read – RedEnvelope CFO Leaves Amid ‘Budgeting’ Errors (TheStreet.com)
Read – Zappos Profile (the a:c)
Read – RedEnvelope Dissidents get the Heisman (the a:c)
Read – Blood-Red Envelope (the a:c)

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One Comment leave one →
  1. June 20, 2006 10:21 pm

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