Abe's Market: Connecting suppliers with the right audience

October 27, 2014; 00:16 am by Bill Bishop

We like to shine a light on retail innovators we meet from around the world. This week we talk with Richard Demb, co-founder and CEO of Abe’s Market. Abe’s is an online market based in Chicago, IL that sells a wide variety of natural and organic products. We were intrigued by their unique sampling program, a website that does an outstanding job of engaging shoppers, and an unusually close relationship with suppliers that breaks new ground.

Shoppers clearly like what they are seeing. AbesMarket.com had more than 380,000 visitors in October 2014, up from 250,000 twelve months prior. Investors like what they see, too; the company has recently attracted new funding from a number of sources.

What need did you see in the marketplace that prompted you to start Abe’s Market? 

My co-founder, Jon Polin, was introduced to a novel organic product from a small but promising brand that had great growth potential in our opinion. We both had a lot of brand-building experience, and we started strategizing about how we could help them grow. The best place to tell the brand’s story, we thought, would be a retail website that attracted consumers who valued high-quality ingredients. When couldn’t find one, we decided to build a site for that audience ourselves. This was late 2009.

Our objective was to create a site that we would be excited to shop because it collected all the top natural and organic products in one place – from food to pet supplies to home furnishings to clothing to health and beauty products. We also wanted to provide the makers of those products – who work in an extremely fragmented supply-side environment – the ideal marketing and sales outlet. Our first tagline was "Feel good about your goods."

You’ve grown rapidly. Which tactics have been particularly useful in driving growth?

We’ve been ahead of the curve in providing consumers with information about product attributes and access to sellers.

Our Abe's Qualities feature analyzes every SKU we sell and tags each one according to 220 relevant attributes. With just a couple of clicks, consumers can filter product collections according to their own definition of what’s important – in retail grocery terms, they are creating their own shopping aisle. 

In terms of access, every product page offers buyers the opportunity to connect directly with sellers via our Q&A feature. Anyone can ask any seller questions about product or brand details, and all of the previous questions and answers are cataloged on the page for easy reference.

Your relationship with sellers is unusual. Will you describe it for us?

Our core innovation has been the depth to which we partner with our sellers. We have been, and continue to be, focused on giving our sellers a stage to share their story.

We leverage the web to paint a full-color picture of their brand. We designed the site to promote our sellers' articles, video interviews, questions and answers and behind-the-scenes photos. The Magazine section of the site is one of the vehicles for our sellers’ story-telling and a also place where shoppers can go to get ideas. Every product page offers easy access to the seller’s story, product line, deals, reviews and Q&As.

When we sense an opportunity to help our sellers, we dig in to do so. That commitment has manifested itself in a number of unique services, among them a purchasing co-op that combines our sellers' buying power to reduce costs across their business needs.

For example – every brand needs to ship their product from point A to point Z, whether that be less than truckload, full trucks or UPS and FedEx. We surveyed our seller community for the best freight provider, and then negotiated a massive discount with that provider for all our brands to use. We also worked with UPS and FedEx to set up a master account that every brand we work with can use – and the more we all use the account, the more we all save.

Here’s another example of how our brand relationships benefit both the brands and Abe’s. Given our insight into their success and the increasing consumer demand for healthy living, we, together with our lead investor, Mistral Equity Partners, thought “who is better positioned that us to invest in a select number of trending brands.” We set up the Abe’s Velocity Investment Co. as an independent entity that is made up of Mistral and Abe’s management, to leverage our finance and operational backgrounds to help our portfolio grow. In a matter of months, we invested in Quinn Popcorn and World Peas with a few more deals soon to be announced.

Driving traffic to a website without heavy discounting is always a challenge. Looks like you may have found an answer. How do you approach this? 

Again, it goes back to our focus on partnering with our sellers to grow their reach. Brands are constantly asking us how to get more relevant consumers to try their product. "If people could only try it, we know they would buy it and tell their friends about us." To achieve this exact objective, we developed our Try for $2 program. 

It works like this: First, every day we offer a select group of full-size products for $2 (including shipping). This provides a unique reason for consumers to visit AbesMarket.com/try/. In exchange for this knock-your-socks-off price, we ask buyers a few questions before they check out, and for their feedback a few days after trying their picks. This platform develops actionable feedback in real time. It’s quite a breakthrough.

For brands, we are solving the pain they face in getting new consumers to try their product, and we’re also closing the loop by providing real-time data on what those consumers are saying about their products. The feedback is sometimes negative, but it is actionable. Brands can now course-correct because they have real data on who’s trying their products, where they live, what they look for, the value perception and much more.

Then there is the advantage to Abe's. The same consumer data is anonymized, and gives us at Abe's unique insight into trends and shopping patterns. Let me share a few high-level examples. The demand for gluten-free products is well documented, and we see that consumer often at Abe's. But also, 29% of shoppers are actively telling us that they seek out low/no-sugar products – a full percentage point higher than gluten free. 

We can also slice our consumer data by where our customers shop offline. I was surprised to find out that 74% of Target shoppers seek out non-GMO products, and that 41% of Whole Foods shoppers are buying between 25%-50% of their grocery/pharmacy products online at sites like Amazon, drugstores or Abe's.

Have you considered partnering with retailers?

We have, and in fact have a few announcements up our sleeves. I can only say "stay tuned"...

Looking forward, what do you see as the next big opportunities for Abe’s Market?

Capturing and predicting consumer and product trends in today’s hottest vertical, natural/organic. Our consumers are sharing fascinating data with us. It it allows us to see who is buying what, where, why, what they think of the product, and how that feedback compares to other products in this space.

We wake up in the morning thrilled to be riding two tidal waves - one, natural/organic growth at 14% per year and two, online grocery, which Brick Meets Click has projected will expand between 200% and 400% in the next few years.