Punchbowl Brings Party Data to E-Retail and “Deductive Commerce”

9/25/12Follow @gthuang

It’s a classic case of big data meets retail. With some partying thrown in.

Punchbowl, a Framingham, MA-based startup known for its party-planning software and digital greeting cards, is rolling out a big e-retail component today. The idea is to use information the company has on customers’ event-planning behaviors to offer them products they might want to buy, like party supplies, decorations, and costumes for Halloween.

This is an interesting (and somewhat unusual) move by Punchbowl, which has been a digital media company to this point, making money on advertising and membership fees. Founder and CEO Matt Douglas says his team has been working on the e-commerce project for about a year.

An important part of the new rollout, he says, is integrating the retail side with Punchbowl’s existing business. “If we had to acquire customers from scratch, we wouldn’t do this,” he says. “But we have millions and millions of customers using the site.” (The startup outsources the inventory and fulfillment part of the retail chain and buys its products at wholesale like any retail store.)

The bigger trend here is that companies of all types are trying to use data and analytics to sell more relevant stuff to consumers. Big retailers like Walmart and Lowe’s have all kinds of predictive algorithms about what shoppers need. Ditto big Web companies like Kayak and Mint across travel, finance, and other industries. And plenty of startups have joined the fray.

What a company like Punchbowl lacks in scale, it tries to make up for in nimbleness—like offering an iPad-ready selling platform right out of the gate.

“If you’re a retailer in this decade, you have to move from traditional ‘selling stuff’ to offering engagement platforms,” says Douglas. “Now we’re getting into deductive commerce, where there’s a smart engine behind the scenes.”

But how big a market is party planning and events, for retail? Douglas says it’s tens of billions of dollars (think kids’ birthday parties and Halloween supplies). “Each holiday is worth a tremendous amount of money,” he says.

Punchbowl has about 20 employees and says it is focused on growth, not profitability, at this point. The company has raised in the neighborhood of $3 million from Intel Capital, Contour Venture Partners, and angel investors since its founding in 2007.

Its move into e-commerce is an effort to “add some rocket fuel to the company,” Douglas says. “This is a pretty big augmentation to our business.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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