When people go to a store, they usually buy something. Not so on the Internet. Only 2% of online shoppers actually become customers. And that dismal “conversion” rate has kept virtually all e-tailers in the red.
In comes Ecadia, a year-old Bellevue company that’s starting to provide e-commerce sites with product data from authoritative sources, such as Consumer Reports Online and CNET Data Services. Ecadia’s bet: e-commerce sites that inform and educate their visitors will book more sales. Last week, the company closed on $2 million in venture capital (its first round) and launched its service on DailyShopper.com. So we thought it time to track down President and co-founder Mark Jaffe (formerly the head of Walt Disney Records).–SJ
Seattle24x7: Mark, people now use the Internet mostly to comparison shop. What makes you think providing shoppers with more info online is going to make them buy online?
Jaffe: To purchase online, shoppers need to have their specific questions answered, and to get trustworthy third-party opinion that validates their decision. With our service, the customer never leaves the merchant’s site. And the longer customers stay on a site, the more likely they are to buy. Via Consumer Reports and CNET Data, we are providing ratings and buying tips on more than 200,000 different products. And we can customize that info for what’s offered at a specific e-commerce site and what specific shoppers need.
Seattle24x7: What’s your target market?
Jaffe: The initial e-tailers we’re going after are those that can best use the content we have. From the revenue side of equation, there are only two ways for online merchants to achieve profits: (1) get consumers to spend more; and (2) get more shoppers to become purchasers. We primarily focus on #2–increasing the conversion rate.
Seattle24x7: Say I’m shopping for a digital camera. What would Ecadia’s service do for me?
Jaffe: First of all, if the e-commerce site had Ecadia’s service, you’d get your basic questions answered: “What does a digital camera do, which one fits my needs, etc.” Then you could compare the features and ratings on various cameras.
Seattle24x7: But your real customers are the merchants. What if the online merchants are selling mediocre products?
Jaffe: We give our info the specific skew the online merchant wants. But once the merchant chooses what type of info he wants, we will not compromise the integrity of our info. Say a merchant opts to include Consumer Report ratings; he cannot delete the paragraphs that aren’t favorable. Of course, he can opt not to include the ratings.
Look. In the long run, we think online merchants that leverage the consumer who has complete information (rather than the consumer who is constrained by incomplete info) will win out.
Seattle24x7: Who’s using your service now?
Jaffe: On Saturday, we went live on DailyShopper.com, which provides localized shopping info (prices at local merchants, etc.). In their “SmartShop” section, for instance, you can get pointers on buying a digital camera, the highest ranked, etc. And that’s just some of the info Ecadia can provide. We can also do things like advanced searching, which allows shoppers to select desired product attributes and directly link to matched products. In the next couple of months, we’ll be announcing a number of deals with other e-commerce sites.
Seattle24x7: You’re InfoSpace-like in that you sell a “customizable, private-label merchant solution.” How will you be paid?
Jaffe: We’ll charge either an upfront fee, or offer an ASP model [online access to the service for a rental fee]. We think the latter will benefit a lot of sites that want to experience the benefits of Ecadia quickly, with only a minimal investment.
Seattle24x7: Who are your major competitors?
Jaffe: We run up against Productopia.com and other websites that allow merchants to link to them. We’re different because we’re providing the product information directly to the e-commerce sites. Merchants want to build brand. And providing Ecadia’s product-comparison info increases customer loyalty and conversion; there will be a small “Powered by Ecadia” icon.
Seattle24x7: How are you marketing?
Jaffe: We’re doing direct sales. And we’ve established a number of different channel relationships. For example, we’re working closely with CNET Data Services. They are a major source of leads for us because their data are second-to-none in the computer/tech products sector. And many sites want that info and the ability to make it accessible by consumers.
Seattle24x7: What’s your financial relationship with CNET Data?
Jaffe: The CNET relationship is not a licensing deal. It’s a joint partnership for marketing and sales. For Consumers Digest Online, we are OEMing their content as part of our engine, so we’re paying them a licensing fee.
Seattle24x7: Where did the recent $2 million come from, what types of positions are you hiring, and how did you end up Bellevue?
Jaffe: The latest funding came from institutional and private investors nationwide. And we’re very aggressively hiring at this point, mainly in sales, marketing and product development [engineers].
Ecadia was founded a year ago by me and Joe Levin, who was the national sales director of Elekom Corp., a local maker of B2B software that was bought by Claris. Joe, now COO, has been in Seattle virtually his entire career. And when Claris moved the Elecom operation to Atlanta, the core team of programmers decided to stay put. They’re now doing Ecadia’s programming, and we’re thrilled to have them. They created the e-procurement product installed by companies like Hyatt, First Data, and Mastercard.
Seattle24x7: Did you hire a firm to come up with the Ecadia name?
Jaffe: (Laughs) No. It just was one of those names that occurred to us.
Soula Jones is Content Chief at Seattle24x7.com
The Land of Ecadia
1756 – 114th Ave.,
Bellevue, WA 98004
Employees: 12 full-time/2 part-time