Boxed is a new way to discover on mobile

Imagine walking into your favorite grocery store and smelling that sweet aroma from the bakery near the front of the store. Your stomach rumbles and you go about your shopping, probably adding way more items to your cart than you previously planned. That’s not by chance, that’s by design…and there is a science to where everything in the store is.

Maybe you hate shopping at grocery stores or other retailers? Imagine shopping for the same items on your couch from your phone. Have you ever been delighted, like you have in a grocery store, inside of an app’s shopping experience (or in the app store for that matter)? For most people, that answer is no… until they use Boxed.

TechCrunch, Fortune, and others covered the Boxed funding news last week, so I won’t cover the full history of the company here. In short, imagine being able to shop at Costco or another wholesale club, without ever having to go to a store and without any membership fees. Boxed ships to your door in all 48 states already (no lugging big boxes in from the car or up your stairs), with free shipping for most orders. 89% of the shipments arrive in 2 days or less. They remove all the frustrations associated with big box stores and make shopping fun again.

Mobile is Different

In 2014, there has been a recent rash of food delivery start-ups raising big rounds that promise to deliver catered meals or pre-packed ingredients to your door (Munchery, Sprig, Zesty, etc). Also, the big e-commerce players like Amazon and Google have certainly stepped up their packaged goods game with Amazon Fresh and Google Now. Wal-Mart even has a dedicated bay area lab that is hiring a ton of people.

So, with all those players in the market, why “another” start-up delivering decidedly unsexy items like paper towels and diapers? For one, Boxed is not going up against Amazon and Google (yet). The wholesale quantity and products that Boxed sells today are not available from standard retail or online. It’s a differentiated product from anyone in the online or mobile markets. Jeff Jordan, former founder/CEO of Open Table and now Parter at a16z, has a great post about the “tipping point of e-commerce.” In it, he talks about how “online retail has strong cost advantages over its offline counterparts and is rapidly taking share in many retail categories through better pricing, selection and, increasingly, service.” Boxed has those cost advantages over both offline and online, with just an app to worry about supporting.

Fellow Boxed investor, Josh Kopelman of First Round, did a great analysis where he found that “of the top 15 most trafficked eCommerce websites today [2010], just one of them did not exist back in 1999 (NewEgg — which launched in 2001). Which means that over 90% of the top eCommerce websites are over 12 years old! That is pretty remarkable to me — and reflects an amazing lack of external innovation (and disruption).” This post/quote was from 2010 and foreshadowed the rise of new e-commerce models like GroupOn, Warby Parker, Just Fab, and more. I think what held true in 2010 also still holds true today in 2014, but now the opportunity for disruption for commerce is in mobile. Specifically, with native mobile apps (not the mobile web).

In their initial pitch to us, the Boxed team outlined 4 key beliefs that I absolutely agree with. With their permission, I’m reposting them here:

1. Human behavior is changing. The mobile commerce “switch” is coming
2. Massively valuable mobile-first retail businesses will be built
3. Light and nimble teams will succeed
4. Mobile is different — from distribution to experience to use case

Discovery and Data

It was clear from our very first meeting that the Boxed team was a group of exceptional, repeat entrepreneurs, with a big vision for disrupting the status quo. They live in their data and aren’t afraid to test and iterate quickly. They could certainly answer our key “why us?” question: having known each other for a decade+ and selling their previous company, a mobile game shop called AstroApe, to Zynga. In our discussions, the Boxed team emphasized that they are not just a shopping app. As they describe it, Boxed is a “leading discovery-based shopping experience that is changing m-commerce through a network of multiple, targeted consumer touch points.”

An interesting data point: over 80% of Boxed’s users do NOT use the search function. The search option is a clear affordance, it’s one of 5 primary options on the bottom menu bar when you open the app. That means people don’t use search because they can’t find it. I believe it’s because the Boxed design and curation is so good that people prefer to browse/discover/shop using the news feed style presentation and personalized push notifications.

Remember that amazing bakery smell when you walk into the grocery store? And subconsciously buying more than you had planned? Boxed is the virtual version of that. When we were first testing out the app, I handed over my iPad to my wife. 20 minutes later she was still browsing through all the categories and adding items to the cart. I had to wrestle the iPad back. That’s a sample size of one, but almost every person I talked to had a similar experience. And Boxed’s customer metrics was/is the proof in the pudding.

The SKUs (number of products) available on Boxed have been limited to ~800 different types of items on purpose. Right now a curated selection eliminates choice paralysis for the consumer and gives the company time to scale its pick-and-pack shipping operations. There is a lot more going on behind-the-scenes with data, but I don’t want to spoil all the surprises, so will end there. Let’s just say a new brand of granola bar won’t be the only thing you will discover…

Discover Boxed

Try Boxed out for yourself and let us know what you think — good or bad. I’m @zawthet on Twitter. Use the code DISCOVER for $25 off your first order and free shipping. It’s good till December 2014, but only valid for the first 1,000 people to use the code. You can download the Boxed app for your phone or tablet here.

Our investment in Boxed is only the beginning. Despite our optimism and conviction that this is the team to figure it out, the hard work starts now. I’m honored to join the board of directors and I can’t wait to see what the future holds for this company and for m-commerce. Can you smell the bakery from here?

PS. Thanks to David Ko, Chieh Huang, Jared Yaman, Ed Cluss, Jen Colton, Sunny Dhillon, and others for the assist