I was intrigued to come across a business article this weekend announcing that StreetHub, a network of independent retailers, had raised $2.6m (£1.7m) in their latest funding round, led by Octopus Ventures.
The group also received investments from Index Ventures, which has stakes in online retailers Asos, Farfetch and Net-a-Porter, among others, as well as a number of other angel investors.
The element that intrigued me was the phrase “network of independent retailers” and I began to dig deeper to establish whether there was anything in this business model that could be applied to our own sporting goods industry.
Launched in 2013 with a $1.2m seed investment round Streethubs aim was to bring together a network of independent fashion retailers into one website. The main targets were those boutiques that did not have a web presence but did have ranges of fashion lines that they wished to sell to a global audience.
The online venture provides world-wide shipping, with click and collect and one hour Shutl delivery available in selected postcodes.
StreetHub co-founder Mandeep Singh said the success of the company’s iPhone app, which launched last year, had shown the firm “the compelling opportunity to also serve people who are keen to discover shops which are a little further afield too, and offer worldwide shipping”. According to StreetHub, now renamed Trouva, the app has been used by over 40,000 customers since it launched.
“Trouva is the logical next step for us in our mission to help our amazing independent retailers to reach an even wider audience and help more customers to discover these inspiring, individual collections of products,” added Singh.
Dan Rigby, owner of home and gift shop Rigby & Mac said: “Trouva is already having a significant impact on our sales.”He added that over the last month, the shop’s sales had gone up 10 per cent “thanks to Trouva”.
Lawrece Roullier White, owner of East Dulwich-based lifestyle boutique Roullier White, said: “Being part of the Trouva community is great, because it brings together a selection of retailers that stand out and offer a really inspirational mix of products, enabling shoppers to find something a bit different wherever they are based.”
Could it work in sports?
So, so far the principal is clear. Bring a network of independent retailers together, provide a simple platform for them to retail from and open up their product range to a wider audience.
However if we look a little closer its not that simple.
The success of Trouva is the fact the these individual boutiques have differing and unique product ranges that often cannot be found in other towns or cities. They may feature local designers, small companies and small product runs – a proposition not dissimilar to those products brought to market by notonthehighstreet.com.
With our sports retailers there are often common product ranges from the same suppliers and therefore a trouva environment would, arguably, only be driven by price – much as the amazon marketplace is driven and often to the detriment of the brand and the detriment of retail margins.
But hang on.
Perhaps it could work from the brand supplier side.
My work brings me into contact not only with large leading brands such as Uhlsport and Spalding, but also with smaller sports brands, start-ups and sporting goods manufacturers looking for a route to market.
Often my advice is simple – the wholesale route is becoming increasingly difficult; in each category there are many competing products; the consumer is demanding lower and lower prices; many retailers don’t want to take a risk on new brands/product etc etc…..
But imagine there was a credible alternative.
A place where new, niche, innovative products could be brought to market. A hub where these “artisan” brands could showcase their wares. A place where sporting goods products with limited distribution (and therefore not found on the High Street or the big online retailers) but with unique propositions could be found.
An Aladdins Cave of specialist sporting goods.
Of course there would be some challenges. However one could imagine some strong PR driving initial growth as the platform would allow small businesses the chance to showcase their ranges and be a strong traffic driver.
Logistically the brands could simply create new product listings and all fulfilment would be done by them also with the hub simply taking a commission.
Not only could this provide a new revenue stream for these brands but it could also act as a shop window for, the wider trade to see new products – acting a little like a virtual trade show.
We are not short of new brands coming into our industry but we are short of retailers to stock all of these new ranges forcing many new brands to sell direct either from their own website or through third party channels such as amazon.
Maybe, just maybe, a sportshub could create a new environment bringing them all together under one roof.
A simple way for the consumer to find the latest new and exciting thing in their sport.
A specialist environment but where the brand is in control of elements such as pricing and the way that the product is presented rather than the retailer.
An opportunity to ensure brands and product messages are not diluted.
I’m off to raise my seed capital if anyone fancies joining me….!