Successful Networking

With Enough Customers, You Don't Need a Product


Photograph by Ian Allen for Bloomberg Businessweek

About once every 10 minutes, a girl—usually a teenage girl—tweets about her complicated, intense, time-sucking relationship with the social shopping site Wanelo. “Safe to say I’m addicted,” says @_MaryBeth1. “I see so many things I want on Wanelo but then I get sad I’m never going to buy them,” says @jesstoci. “Wanelo is kinda the reason I have no money,” adds @ayeitskellay.

Launched in 2012 by Deena Varshavskaya, 34, Wanelo—the name is shorthand for “want, need, love”—has insinuated itself into the lives of intense shoppers. In August the company announced it had 11 million users, up from just 1 million the year before. Ninety percent of them are women, though the proportion of men on the site is increasing. So, too, are the accounts of retailers using the platform to find out which products resonate most with consumers. “We noticed mid-last-year that there was lots of inbound traffic coming from Wanelo, so we quickly jumped in to create an account,” says Bryan Galipeau, director of social media at Nordstrom (JWN). “Within five months, we had a million followers, the fastest growth of any of our social media accounts.”

Wanelo is an intermediary and doesn’t stock anything itself. Instead, it lists more than 12 million products from roughly 300,000 stores worldwide. Like users of Twitter (TWTR), Instagram, or Pinterest, those of Wanelo—be they browsers or stores or fashion designers—post images of products they’re interested in. They can also “save” items others have posted on Wanelo into their own wish lists. Unlike similar sites that serve up grids full of desirable stuff ad infinitum, Varshavskaya’s site is different in that everything is instantly purchasable. If a spring-break-bound college girl is looking for a swimsuit, she might scour e-commerce stores and Wanelo for bikinis, paying special attention to those that have been “saved” the most, then create a board of options to see which gets the most praise. Next to each item is a counter that shows how many times it has been saved to users’ accounts. Below that is the price and a giant green “buy” button.

As a teenager, Varshavskaya was never that much into shopping. She was raised in Siberia by a stay-at-home mom and a political journalist dad. At 16, after her parents divorced, she and her father’s family relocated to the U.S., and she eventually enrolled at Cornell University and took computer science courses. But Varshavskaya decided that the education system wasn’t serving her interests and dropped out in 2002, two classes shy of a degree. The next year she moved to New York and launched her first startup, ReelAct, a video site that attempted to streamline the actor audition process in Hollywood. “I grew up questioning everything around me,” she says. “I mean, my dad was a journalist in communist Russia.”

After ReelAct blew up because of partner differences, Varshavskaya started casting about for a new industry to fix. “I was really frustrated with the way traditional shopping worked, with how fragmented and difficult it was to find stores that you liked or that other stylish people were shopping from,” she says.

Varshavskaya—who laughs loud and often—has the kind of exactingly specific taste and joyous consumer appetite that makes a community like Wanelo click. In the past two years she’s undergone a mission to collect (and wear) more than 35 pairs of patterned leggings, adorned with motifs such as cats or lips, many of which she’s sourced on Wanelo.

“Basically, I’m a classic optimizer,” she says. “Facebook (FB) is for friends. Twitter is for news. LinkedIn (LNKD) is for jobs. Instagram is for pictures. Wanelo is for shopping.”

Right now she’s focused on tailoring the technology behind the site so that a more “personalized” set of products is displayed each time a user visits. She’s also refining a function that displays, without having to click away to a store’s website, when something is no longer available or already sold out. “Our users care about that the most,” Varshavskaya says. “With big brands, and small brands, and tiny European boutique sellers, it’s a very challenging problem: How do we get that data reliably? How do we ensure it’s all accurate?”

Although she originally wanted to focus on a single Web experience, Wanelo’s engineers introduced an iOS app in August 2012, and now 85 percent of the site’s traffic comes from mobile devices. More recently, Wanelo upgraded its search capabilities for the app and introduced a “stories” tool—which allows users to write a few words around a collection of items—so that brands and amateur shoppers alike can better highlight goods. Along the way, Urban Outfitters (URBN) saw its follower count top 2.5 million, surpassing its numbers on all other social networks.

Other retailers are also adding buttons for Wanelo to their main e-commerce websites and hiring social media specialists to post products directly to the network. This month, Varshavskaya’s company began sending analytics reports to big retailers who were seeing purchases through Wanelo and wanted to know more about their customers.

With $14 million in funding, Varshavskaya hasn’t yet announced how her company will profit in the long term, but she says Wanelo has been generating income since Day One. Affiliate deals entitle the site to a percentage of each transaction. She’s not worried about money, she says: “Any space where a business is about shopping, there’s obviously revenue opportunity.”

Soller is a deputy editor for Bloomberg Businessweek.

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Companies Mentioned

  • JWN
    (Nordstrom Inc)
    • $69.25 USD
    • -0.39
    • -0.56%
  • TWTR
    (Twitter Inc)
    • $49.75 USD
    • 0.32
    • 0.64%
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