CoffeeTable Aims to Reinvent Catalog Shopping for the iPad Era
When e-commerce startup CoffeeTable was brand new, the company occupied a table at San Francisco’s Dogpatch Labs, right across from another startup called Burbn. The week Burbn launched its iPhone app, CoffeeTable’s lead engineer “started to see that it was going to take off, and decided to switch over and join them,” says Ben Choi, CoffeeTable’s CEO. It was a prescient decision: Burbn was about to rename itself Instagram and become one of this decade’s hottest startups.
But Choi doesn’t begrudge the engineer his recent Facebook windfall, and he doesn’t wish he’d gone along for the ride. In fact, he thinks CoffeeTable may have an even bigger opportunity in front of it: the chance to reinvent the catalog shopping business.
Wait, you say: catalogs? What’s a tech startup doing messing around in a market that hasn’t been cutting-edge since, oh, 1888, when Richard Sears introduced his first compendium of farm equipment?
One word: iPad. CoffeeTable is all about letting people browse their favorite catalogs on their Apple tablets. Open the free CoffeeTable app, and you can flip through the latest catalogs from 82 brands, from Cheryl’s Cookies (featuring scrumptious-looking frosted shortbread cookies) to Scrubs & Beyond (for the nurse or doctor who wants that Grey’s Anatomy look). If you find an item you like, you can order it straight from the app.
None of that is unprecedented or unique. The Google Catalogs iPad app works much the same way, and the catalogs section of the iTunes App Store lists more than 600 apps overall. But after just a year and a half in operation, CoffeeTable has already developed deep ties to the catalog marketing industry—and has intriguing plans to inject new life into the old medium. Choi, a former partner at venture firm Maveron, predicts the iPad will be “the platform for the next revolution in e-commerce.” So I visited recently to find out more about what the company is up to.
Now, I should admit up front that I’m not a big catalog fan. I’ve spent the last 10 years trying to get companies to stop sending me the blasted things in the mail. But then, I’m a guy, and I don’t particularly enjoy shopping. It turns out that most American still love their quarterly Sharper Image, Crate & Barrel, J. Crew, and Lands’ End catalogs. In fact, if you believe the American Catalog Mailers Association, catalogs drive $270 billion in retail purchases every year. That’s more than three times the amount consumers spend on e-commerce purchases. “Catalogs seem old and staid and not very innovative, and yet they are the most effective marketing platform retailers have,” says Choi.
Neither Choi nor CoffeeTable’s founder Chris Friedland started out as catalog people, either. Choi explains the story this way: Friedland, who’s also founder and CEO of Chico, CA-based Build.com, started to notice in mid-2010 that more and more people were visiting the home improvement site from their iPads. Not only that, but iPad users were spending more money on the site, and returning more frequently. It didn’t seem that iPad owners were more affluent than people browsing from their desktops or laptops—the conclusion Friedland drew was that there was actually something more engaging about the experience of shopping on a tablet.
That got him thinking about what e-commerce companies could do to take even better advantage of the iPad’s great visuals and its touch-based interface. Friedland soon realized that he might need to rewind history a bit, to the days before e-commerce. There’s a huge convenience factor to shopping online, but the fact is that e-commerce is more about product search than product discovery. If you’re looking for inspiration for your kitchen renovation project, you don’t browse page after page of faucets at Amazon.com. That’s what catalogs are for. And that’s how CoffeeTable was born.
“Catalogs provide a great content experience,” says Choi. “The mindset is, ‘I am discovering stuff I didn’t know about. I’m not shopping on price or features, I just want ideas.’ That is what e-commerce hasn’t done well.” But if you could marry the convenience of traditional e-commerce with the usability ofthe iPad, you might have something big. “Because of this platform and the unique touch interface, there is the opportunity to build the next big e-commerce company based around discovery,” Choi says.
Choi himself came into the picture in late 2010. He says he first got to know Friedland after using Build.com to plan his own home remodeling project. “I called him up and said, ‘I love what you have done and I would love to get involved in your next project.'” By “get involved,” Choi really meant “invest,” since his job at Maveron was to find promising new startups. But as the relationship developed, it turned out Friedland didn’t want Maveron’s money—he wanted Choi himself. Once it became clear that the prototype version of the CoffeeTable app could actually generate business, Friedland asked Choi to take the CEO post, and Choi decided the opportunity was too big to pass up.
At the moment, CoffeeTable is providing digital facsimiles of paper catalogs, in the same way that companies like Zinio provide PDF-style facsimiles of magazines. The content is the same, except that in some cases, CoffeeTable strips out the original catalogs’ text and captions to reduce clutter.
Every purchasable item on a CoffeeTable catalog page has a little black button hovering over it. Tap the button, and an info-pane slides out with product details and prices for that item. (Much of CoffeeTable’s actual labor, according to Choi, goes into placing these buttons and formatting the product details for easy tablet browsing. But in this area, the company has one key advantage: its main outside investor is Chicago-based RR Donnelley, the nation’s largest printer and distributor of retail catalogs. That means CoffeeTable clients who print their catalogues using RR Donnelley can submit their PDF or InDesign files just once.)
Purchases on CoffeeTable happen in two ways. If the merchant has provided the startup with access to its own e-commerce backend, then the whole transaction can happen within the app. Users simply tap the “Add to Cart” button on the product pane to put the item in their shopping cart. Then when they’re done shopping, they head to a checkout page, where they tap once more to pay, using whatever credit card number and shipping address they’ve previously provided to CoffeeTable. “We market it as two-tap shopping,” Choi says.
If a merchant hasn’t yet connected CoffeeTable to its backend systems, then the app shows a “Buy on Website” button. This leads to the merchant’s traditional e-commerce site, where customers can go through a typical Web-based transaction. Choi says Web-based purchases require 15 taps on average, not to mention a lot of typing, which is why the startup is working hard to get more merchants to switch over to the two-tap checkout system. It’s not just that this option is faster; the conversion rate is twice as high, meaning products available through express checkout are twice as likely to be purchased. (Conversion rates matter greatly to CoffeeTable, since the startup earns money by keeping a small percentage of each completed transaction.)
But how revolutionary, really, is a tablet-based catalog? When I visited CoffeeTable, I was blunt with Choi about my low opinion of digital magazine apps that are really just static facsimiles of their print cousins. If tapping on price tags winds up being the only new form of interaction open to users of iPad catalogs, I argued, then CoffeeTable and its competitors, including Google Catalogs, haven’t advanced the state of the art very far.
I pointed to Houzz, the home design and redecorating site, as an example of a company taking a somewhat more innovative approach to e-commerce on the iPad. If you’re a design maven and you haven’t seen Houzz’s iPad app, you should check it out. It’s an “ideabook” where users can curate their own collections of home improvement ideas as they peruse full-screen photos of house interiors. Just as with the catalog apps, items available for purchase have digital price tags hanging on them, leading to pop-up windows with product information. It’s like an augmented-reality version of Architectural Digest. And Houzz isn’t alone—there are plenty of other companies, such as Boston-based digital publishing firm Zmags, working to made digital shopping more interactive on mobile devices.
Choi agreed that Houzz has done a “great job” of combining original content and e-commerce, and he says he hopes that CoffeeTable can, over time, work with retailers to bring a similar freshness to their catalogs. He says it could start with personalization—or what’s known in the advertising business as behavioral targeting. “Today retailers ship a million copies of their paper catalogs with 10 covers, one for each major region of the country,” Choi says. “Tomorrow, on CoffeeTable, there could be a million different versions of their catalogs, with pictures targeted based on how much time you spend with them, who you have shared the catalog with, and most importantly what you have purchased.”
Beyond that, CoffeeTable could introduce its own curation and sharing features. CoffeeTable already includes a “wish list” feature that lets a user save an item to a personal list rather than purchasing it on the spot. There’s not much difference, Choi points out, between a wish list and a pinboard on a social curation site like Pinterest. “A wish list is actually a stream of things that express you, and that could become the basis for something more social,” he says. People browsing CoffeeTable catalogs for inspiration might be interested in sharing what they’ve selected, or seeing what their friends have wish-listed. In that way of thinking about e-commerce, he says, “a purchase is maybe a side effect of expressing yourself.”
But even if CoffeeTable never goes this route, there’s another potentially lucrative business open to it: retail analytics. Because most catalogs are on paper, retailers have very little information about how people actually use them. CoffeeTable could fix that, since it’s got data on every action a user takes within the app. And it’s already learning some interesting things. “We asked retailers early on to tell us how people flip through catalogs,” says Choi. “They said catalogs are 60 pages long because that is a reader’s maximum attention span, and that roughly half of the audience gets to page 30, and it drops off from there. It turns out they are just wrong. We find across the board that if a consumer gets to page 30, they have a high likelihood of getting all the way to the end.”
Insights like that could change the way retailers design catalogs, or even allow them to do A/B testing using a digital catalog before they print millions of paper copies. “We have our eye on becoming the Omniture of the catalog industry,” Choi says, referring to the Web audience measurement firm purchased by Adobe in 2009 for $1.8 billion.
Will CoffeeTable be the next Instagram? Not unless it can turn tablet catalog browsing into an act of Ebola-like virality, the way Instagram did with faux-vintage smartphone photography. But with the iPad revolution showing no signs of slowing, the startup definitely has big opportunities ahead of it. And if it can figure out how to make the Hammacher Schlemmer catalog a little more interactive, I might even start shopping again.