In just over a year of existence, Streetcar.com has made a successful business of using the Internet to get online consumers back into brick-and-mortar shops. Company founders Steven Frankel and Terry Shatenstein explain Streetcar's business model as "using the Internet to get people out of their homes" - a far cry from mainstream online stores which base their value propositions on bringing things into people's homes.
It is probably this unusual take on the e-commerce ideal that has seen Streetcar's client and customer base experience significant growth since the idea was first conceived. Frankel explains: "Terry came up with the idea of selling vouchers online. It pretty much came from a personal need; his sister was in Australia, and she used to buy him gift vouchers for birthdays and that sort of thing, and when she left the country, suddenly he stopped receiving anything like that. So the idea was to go and sign up stores all over the country and make it possible for people both locally and outside the country to execute this [type of] transaction.
"The Internet's capability to transcend time and space allowed for this; we've created what we think is SA's leading online retail store which sends people shopping at their favourite [brick-and-mortar] stores."
However, as both Frankel and Shatenstein evangelise, Streetcar sells more than just vouchers - it sells experiences. The gift options open to users means you could send someone a number of vouchers from a variety of stores, thereby tailor-making the gift to suit someone's personality.
"People used to think of gift vouchers as impersonal and it's not the case, because our customers are putting together combinations [of their own choosing]," says Frankel. "We had the director of an IT company giving his pregnant PA a Christmas present comprising of Naartjie and Woolworths vouchers, as well as vouchers for an aromatherapy massage."
The company's client list features a selection of retailers such as Diesel, Gerani, the Westcliff Health and Beauty Spa, most major clothing retailers and stalwarts such as Woolworths and Musica.
Frankel explains that while some stores were initially wary of the idea of signing a contract with the start-up, the overall negotiation process went relatively easily. "Terry is a very astute salesperson in that regard, but it didn't really take that long [to convince the stores to come on board], because for them it's a no-brainer. What does every retailer want? They want more feed through their store and that's really what we're achieving for them. It doesn't cost them anything to be part of the site presently, and they pay per transaction, so it's a complete pay-for-performance model.
"A few of them were just scared of the Internet, full stop. They didn't understand what we were doing. But Woolworths, for example, is a very close business partner now. They really understand the value of what we're doing, of what we're bringing to them.
"Now, we're being approached by a couple of stores every week, [who all want to sign up]. But we're very selective, because we only really want to have fine stores and great shopping experiences.
"We're basically covering off all categories; we haven't had music, so now we're bringing on Musica and CD Wherehouse, we're bringing on all the sports shops like Totalsports and The Pro Shop, so we're covering quite a few areas now. The beautiful thing about it is that it's the gift of choice."
The Streetcar service provided to and enjoyed by both ex-pats and the locals may soon be available out of Africa as well.
"The best businesses on the Web are the ones that fulfil a real need in the market. As they say, the best market to exploit - and I hate to use that word - but the best market to exploit is the one you create yourself. [Until now] buying gift vouchers has always been confined to one simple physical transaction. We've gone out there, and been able to develop a business model that if it weren't for the Internet, wouldn't be possible," says Shatenstein.
"We're bringing on a whole lot of new retailers now, and while shopping is our first 'experience', we'll be bringing on some restaurants and travel companies, making the gift experience more exciting. What's more exciting [for the future] are our strategic relationships with business partners in the UK and Europe."
Frankel agrees. "It's always been our intention to roll Streetcar out of SA; the reason being that people should be able to reciprocate. So if I'm in London, and I send you a voucher, and you're in Cape Town, you should still be able to send back and that is the power of our model. Ultimately, it's a network model where your recipient ideally becomes your next sender. The most exciting Internet models are those which are viral."
Shatenstein lists an immediate challenge as that of maintaining business direction without being distracted by the potential of Streetcar's business model. "It's a hard thing to stay focused, because there are so many opportunities that come our way all the time; innovative things on our Web site, different products and services that we could get into.
"But ultimately, we're looking at what we can do to assist traditional retailers in SA, how we can market for them, how we can do exciting ventures for them using the Internet as a medium. The most logical way is through technology - and I don't think developing ever stops - we're constantly working on improving the product."
As to the story behind the name of that product, Shatenstein explains: "Steve came up with the name, which allows us potentially to move into a host of other areas as and when we want to. A streetcar is part of the retail landscape worldwide; they take you shopping wherever you want to go - and we're a virtual streetcar."
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