NewStore Rings Up $50M to Help Retailers Win “Mobile Influence”

Xconomy Boston — 

Online shopping is going to become a “mobile-only world,” says Stephan Schambach.

The entrepreneur has been building e-commerce companies since the early days of the Web in the early 1990s. But with the exploding popularity of smartphones, the day is coming when “we are going to look at desktop commerce with a sense of nostalgia,” Schambach says in an e-mail to Xconomy.

Schambach wants to help usher in that future with his latest venture, the mobile commerce startup NewStore. And now, the company has a lot more cash to try and make its mark.

NewStore announced a $50 million Series B funding round today, which brings its total venture capital haul to about $90 million. The new round was led by Activant Capital, with contributions from earlier NewStore backers General Catalyst Partners and Schambach himself.

Schambach previously co-founded Intershop Communications and Demandware, two e-commerce companies that went public and became sizable businesses. Demandware was acquired last year by Salesforce for $2.8 billion, after Schambach had left the company, according to his LinkedIn profile.

Now, we’ll see if Schambach can pull off another win with NewStore. It’s hard to tell how much traction the two-year-old company has with customers; Schambach says Adidas is the only one he can publicly disclose. But NewStore certainly has proven adept at raising venture capital.

The company says it will use the fresh funding to expand its software’s capabilities, roll out its product to more brands and retailers, and hire more people. Schambach says NewStore currently has 140 employees across offices in Boston, New York, and three cities in Germany: Berlin, Hannover, and Erfurt.

NewStore aims to arm retailers and brands with the right mobile tools and strategies to take advantage of consumers’ increased shopping via smartphones, and compete better against Amazon. NewStore’s mobile-focused software is meant to ease the buying process and unify the offline and online shopping experiences.

Here’s an example NewStore has given of how its software can work: While waiting in line at a coffee shop, a young woman browses the latest dresses featured in the mobile app of one of her favorite brands. With a few taps on her smartphone, she orders a dress for pickup at a nearby store. A little while later, a push notification on her phone lets her know the dress is ready.

When the woman arrives at the store, a sales associate gets an alert on her phone that the customer just walked in. The sales person can see the woman’s order history, along with the store’s current inventory, which could potentially help her entice the customer to buy more stuff while she’s there. After the woman tries on the dress, she pays for it using Apple Pay on her phone.

Later in the day, the sales associate pings the customer on her phone with a recommended pair of shoes to go with the dress. She orders them with the push of a couple buttons and has them delivered to her home within an hour. When she finds that the shoes are too tight, she requests an exchange via the app, and a new pair of shoes is delivered shortly thereafter. The delivery driver returns the unwanted shoes to the store.

Schambach says if retailers only have an eye on the current purchase being made on a smartphone, they’re “missing the big picture.”

“It’s not just about mobile purchase, but rather mobile influence,” he says. By that, he means that consumers increasingly learn about new products and brands through research on their smartphone, often through social media and “other non-traditional media channels.”

“They visit stores—or buy from their phones—well-equipped with knowledge, and often have already made up their mind,” he continues. “So, which channel is credited with the purchase? It becomes a nonsensical question. Is it a store purchase or a mobile purchase? The answer is both.”

Part of NewStore’s pitch to brands and retailers is its software integrates with their existing e-commerce systems, such as Salesforce Commerce Cloud and Magento.

“We’ve built one platform—all around mobile—that works on top of anything [businesses] have in place today,” Schambach says.