For building the first great made-on-the-Internet brand. “We’re often asked why Warby has been successful,” Co-CEO Neil Blumenthal says of his eyewear company. “If we sum it up in one word, it’s deliberate.” You wouldn’t know it, except by looking at the results. Annual revenues at the five-year-old company are “well over” $100 million, according to a person familiar with its finances. Meanwhile, its two CEOs, who founded the company with two other Wharton classmates, have transformed what was a niche web shop into the hottest thing in offline retail, with 10 stores so far and sales-per-square foot figures that rival those of Tiffany & Co. “When we launched, a lot of people bucketed us as an e-commerce company, but we never thought of ourselves as an e-commerce company,” Gilboa says. “The only products we sell now are glasses, but we think our brand can stand for much more than that over a long time period.” That’s an ambition that many e-commerce companies have talked about. Warby Parker is the only one so far that seems likely to pull it off.
For helping consumers save, spend—and be entertained. The West has a simple narrative about Alibaba: In that telling, it’s a Chinese e-commerce giant that raised $25 billion in an IPO in New York last fall, and is a sort of eBay-Amazon-PayPal hydra. But in China, the company run by CEO Jack Ma is far more ambitious: Last year it began targeting and remaking some of the country’s most moneyed industries, including banking and entertainment. Its Internet finance arm, Yu’e bao, looks to have the earliest impact: It offers Alipay customers higher returns than state-run banks that pay paltry interest rates, and, starved for investment options, the masses responded in droves by putting in $82 billion in the first year. Ma made growing one’s nest egg even sexier with his next offering, Yu Le Bao, a crowdsourced film-investment fund that lets ordinary folks become movie producers—with much less risk than that would normally entail. Though Yu Le Bao remains small, the model threatens to upend traditional film financing in China.
For building a grocery empire that looks nothing like a grocery store. Eataly is an Italian grocery market/restaurant emporium/enoteca/bakery/cheese shop, and business is booming. Its 50,000-square-foot New York City location, across from Manhattan’s Madison Square Park, is doing $85 million in annual revenue. Its even larger counterpart in Chicago, which opened in late 2013, is on pace to hit $50 million this year, nearly matching the gross sales of its flagship store in Turin, Italy. And that’s on top of the 15 other Eataly locations in Italy; the 11 in Japan; and the large-scale outposts soon opening in London, Hong Kong, Moscow, Munich, Paris, São Paulo, Sydney, and Toronto, among other cities. The company’s aim is to build a store that harks back to old-style markets such as the bazaars of Istanbul or the fish markets of Sicily, where, 30-year-old CEO Nicola Farinetti says, “there is no distinction between restaurant and retail: You can eat and buy, or buy and eat.”
For giving the mall a high-tech makeover. Westfield Corp. is a $27.7 billion global shopping-center behemoth based in Australia, but its innovation arm, Westfield Labs, is very different. To start, it’s in San Francisco. And its chief digital officer, Kevin McKenzie, is free to admit something like this: “It’s easy for people to have a vision of a mall as dead,” he says. Westfield Labs is charged with rehabbing the very concept of a boring old retail hub; VP of creative services Rayna Wiles calls it “using digital to amplify the physical.” And in just two years, Westfield Labs’ crew, which has grown to more than 55 employees, has put into motion several ideas to show how malls don’t have to be a relic of late-20th-century American commerce. Projects are tested in shopping centers everywhere including London and Sydney, with the goal of upgrading the company’s 40 malls worldwide and baking these innovations into its most ambitious effort yet—the $1.4 billion World Trade Center retail complex in Manhattan, set to open later this year.
For tapping into the buying power of moms. Zulily launched five years ago as a flash-sale e-commerce site for baby and kids’ products. Moms immediately took to it, and with their buying power Zulily exploded. Last November the site reported a 72% year-over-year sales increase, and today it reaches 4.5 million customers who are projected to spend $1.2 billion in purchases this year. To keep up with the demand and the expanded product line—the company now sells housewares and adult apparel—Zulily has built fulfillment centers across America.
For maintaining the lead in a very well-funded race. Flipkart once had the Indian e-commerce market largely to itself: It was launched by two former Amazon execs in 2007 and began, like their former employer, as a bookseller. But now Flipkart has competition—Jeff Bezos last year pledged to spend $2 billion building Amazon India, and eBay’s Snapdeal is also crowding in. Despite this, Flipkart—which, unlike Amazon, sells nothing directly and instead connects third-party sellers with customers—has managed to stay ahead. It has 26 million users and delivers 5 million shipments per month, and announced last summer that it raised $1 billion in fresh funding, a retail first. That money will go in part toward upgrading its technical capacities and services, like in November when it debuted an app that enables users to use Flipkart on Android wearable tech. And on October 6, it staged a stunt that made a statement: “Big Billion Day” was its gigantic one-day sale intended to show how much commerce it could support, and it claimed to have facilitated $100 million in sales in just 10 hours.
For turning grocery delivery into a high-tech pursuit. The last two decades saw delivery services like Webvan collapse spectacularly, but as more people move to cities, leaving behind conveniences like cars for conveniences like 24-hour delivery, the field is wide open for a company like Instacart to thrive. The nearly three-year-old startup, which contracts thousands of “personal shoppers” to carry out same-day grocery delivery from major retailers like Whole Foods Market and Costco, has been a resounding success, recently locking down $220 million in VC funding and receiving a $2 billion valuation. Instacart’s model seems to work due to its ability to operate as a quick-to-serve startup rather than a sluggish delivery service bogged down by delivery fleets, warehouses, and other burdens. For now, the company is sticking to household needs, but before long e-retailers like eBay and Amazon may be looking over their shoulders to make sure Instacart isn’t encroaching on their turf.
For acting on its massive popularity. While Pinterest remains one of the most popular websites in the world—valued at about $5 billion—the last few years have seen the social media site hit a plateau as it works to monetize its loyal fanbase. Enter Pinterest’s new “Promoted Pins” program, which allows retailers to advertise their wares by creating custom pins that run alongside the rest of the site’s this-could-be-your-life content. And coupled with Pinterest’s recent acquirement of personal-recommendation systems startup Kosei, which will make the site’s ads even smarter and more finely tuned to their users’ interests, Pinterest stands to finally join ad-revenue giants like Facebook and Google in the major leagues.
For bringing a startup sensibility to a neglected consumer market. The buying power of black consumers is estimated at $1 trillion, with an overwhelming portion going toward hair and beauty products. But those products feature limited options, uninspired packaging, and, in most cases, are shunted off to a single, designated shelf in drugstore aisles. Tristan Walker has set out to change that with Walker & Company Brands, which designs and develops products that will address the needs of people of color—with the full awareness that not very long from now, the U.S., like the rest of the world, will be a majority “minority” country. Walker’s first brand is Bevel, a beautifully designed single-blade-razor shaving system for men with coarse or curly hair, which helps prevent skin irritation that can occur from using multiblade systems sold by the likes of Gillette and Bic. As a former Foursquare executive firmly ensconced in Silicon Valley culture, Walker knows how to use the tools of the web—e-commerce bundling, an online men’s magazine, a robust social media presence—to sell Bevel, whose subscriptions are growing an average of 50% month over month. Walker is expected to launch additional brands soon and tackle even more overlooked issues. “There’s nothing more unique in the world than a person’s physiological makeup,” says Walker. “So why is the consumer packaged goods industry still one-to-many?”
For building a lifestyle out of an e-retailer. Frank & Oak was never just an online shop. Even when it only existed as a website selling printed oxfords and selvedge denim for the wardrobes of male creative professionals, it was more of an exclusive club; shoppers had to become members to make purchases. This year that club got its own print magazine and blog. Then, last fall, the brand picked up $15 million in series B funding and built a clubhouse—a flagship store in Toronto that also has a cafe and barbershop. But the brand will always belong online at heart. Last year, Frank & Oak’s more than 1.6 million members still made 30% of their sales through the brand’s mobile app.