This E-commerce Startup Is Helping DTC Brands Navigate the Pandemic
Timing is everything.
In the midst of the pandemic, an e-commerce startup called Whitebox is finding success combining tools for managing online listings across marketplaces with the ability to store and ship products from warehouse spaces across the country. The company is already working with large brands such as Amazon, Walmart, and Costco, along with direct-to-consumer businesses and brands including McCormick, KitchenAid, and Starbucks.
While other firms in the retail infrastructure and logistics space are struggling, Whitebox is closing on a Series B funding round of $18 million. CEO Marcus Startzel says timing has played a key role in his company’s success. Whitebox was focused on solving e-commerce challenges for brands before the pandemic began, but the opportunities to work with major brands to improve and automate the e-commerce process have only grown over the past few months.
As the holiday shopping season approaches and e-commerce ramps up, Startzel anticipates brands are going to face additional challenges in order fulfillment and shipping logistics.
“There are few words that fully describe the shifts we’ve seen in just a few short months in regards to consumer shopping habits and the pandemic,” Startzel says. “With seven million more packages expected to be delivered per day between Thanksgiving and Christmas this year, our team is focused on execution like never before. We are already working with clients to optimize listings and create data-backed advertising strategies for key products while also working with them to determine the best shipping options to keep up with consumer demand.”
Whitebox has already started seeing a shift in how consumers are approaching holiday shopping, with people buying earlier in the season. Searches for Halloween decor jumped into the top five search categories on Amazon as early as the second week of September. Search frequency for “Christmas gifts” increased more than 30% year-over-year the last week of September. Startzel says this likely means that consumers were eager to secure their Halloween needs and start, or finish, their holiday shopping because they are aware of how busy the online marketplace is right now.
That’s only going to get clearer as we move into November, and it’s likely to have an even broader impact on supply chains and logistics this holiday season.
“With the tremendous growth in e-commerce and the broad implications that online shopping will continue to grow even after the pandemic ends, brands now have a renewed focus on their e-commerce business,” Startzel says. “Amazon has typically been a priority for many direct-to-consumer and consumer packaged brands, but with more people shopping online, other marketplaces and e-commerce channels have seen significant growth as well. This growth creates huge opportunities for DTC brands looking to capture new customers.”
That opportunity is one that Whitebox will likely capitalize on as the startup works to differentiate itself from competitors and win over more DTC brands as clients. Startzel says it is Whitebox’s layered approach, with a platform that brands are relying on to both sell products and move products, that’s helping the company shine during what has otherwise been a challenging period for many businesses. Whitebox’s platform includes a “decisioning layer” that uses data to help brands decide whether they should fulfill certain orders or hold inventory for specific marketplaces, or where they should keep their products to best fulfill wholesale orders.
Whitebox’s clients have evolved over time, and now the company is working with traditional brands just as frequently as DTC startups.
Startzel says DTC brands are connecting with consumers differently now than before the pandemic, with “smart and purposeful” brands acting quickly at the beginning of quarantine to move their products to where home-bound consumers would be shopping. In many cases, that meant re-evaluating supply chain demands and focusing more broadly on omnichannel solutions designed to keep and acquire customers on a variety of marketplaces.
“The difference today is that marketplaces are more crowded than ever and in order to cut through that clutter, brands need to leverage multiple channels besides Amazon, such as auction marketplaces like eBay, and shoppable social media,” Startzel says. “As we’ve seen through this quarantine and pandemic, brand loyalty is waning and convenience is driving their intentions. Brands must respond by taking advantage of this by increasing their visibility.”
The growth in e-commerce over the past seven months has meant digital-first and DTC brands haven’t needed to reinvent the wheel. Startzel says any digital-centric brand looking to heighten their engagement with their customers during the quarantine, and even after, should evaluate the when, where, and why of their marketplace management strategies.
As more consumers seek a convenient lifestyle and work-from-home situations experience indefinite extensions, Startzel says the challenges associated with the general growth in e-commerce will continue to present new dynamics. Retailers and digital brands that were already under pressure before Covid will need to adapt to the growing digital consumer space, and post-Covid, those struggles may present other challenges that are just now being unearthed.
“The entire DTC ecosystem has seen significant growth due to Covid-19. Over the past several months, key marketplaces and carriers have had little choice but to change their services and processes. But we built our high-volume, low-defect fulfillment network with modern commerce in mind,” Startzel says. “Using proprietary technology and processes, we provide logistics, fulfillment services and technology to get products anywhere they need to be.”
Stephanie Miles is a senior editor at Street Fight.