Flock

Flock is a social commerce shopping platform that blends the relationships and network effects of social media with a best in class E-commerce experience. It simplifies the online beauty shopping experience, helps consumers get the best deal and enables them to discover new trends and personalized product recommendations through a community of users helping users. Flocks aspires to introduce a new way of shopping online to US consumers by bringing online shopping to the social age.

How did the journey start?

Before joining Wharton, Manvitha (Vita) held a business BA degree from Washington University in St. Louis, and worked with several leading retailers in the US with experience in categories from grocery retail to fashion (Walmart, Jet.com, Bloomingdale's). She had also launched a skincare marketplace business where she sourced Indian products unavailable in the US and made them accessible to Indian American customers. Having a solid operational and business background in retail and an acute understanding of the industry pain points from both consumers and retailer side, she knew that she wanted to start her own business in retail during her journey at Wharton.

When Vita first ran into Malavika at a cohort party, she had no clue that they’d become business partners in the near future. Malavika held a computer science, BS degree from International Institute of Information Technology, Hyderabad. Prior to Wharton, she had technical experience as a software engineer and business analyst working with Microsoft, Brightcom Group, GiveIndia. Malavika has also previously built a business around white label AI.

It was not until several friends referred Malavika to Vita that they sat down and started talking about starting a business together. The two clicked quickly and realized the value their complementary backgrounds could bring to their startup.

Malavika Reddy Manvitha (Vita) Mallela

Why social commerce? Why skincare and cosmetics?

Flock positions itself as a social commerce platform connecting sellers to consumers. Instead of starting from a wide category selection, they focus on beauty, skincare, and wellness The company positioning decision comes from the two founders’ careful considerations.

When the two female founders sat down and discussed the positioning of their startup Flock, they started from their pain points as consumers. People crave community, personalized recommendations, genuine reviews from others that look like them, engaging deals, and an easy, fun shopping experience. Current E-commerce retailers are not meeting customer’s need so they are forced to turn to other platforms, mostly social media and their own personal networks, to get the information they need to make a purchasing decision. Malavika mentioned her struggle with finding the proper skincare and cosmetic products during Covid. Since she could not go to the store to try on the product, her only choice was to go online. She was overwhelmed sorting through the hundreds of products that she saw. She couldn’t understand what would work for her skin type. It was overwhelming to digest the reviews online and often she couldn’t even find reviews that seemed genuine and from people that matched her skin type and Indian ethnicity. Instead, getting recommendations from friends with similar skin types helped. She also joined communities on Reddit and Facebook groups to get social validation before deciding which products to buy.

Retailers and brands’ pain points also inspired them. From her experience at Walmart, Vita knew that large retailers are struggling with capturing the customer throughout their entire purchase journey. It is hard for retailers to incentivize consumers to visit their websites without an immediate purchase need and when customers do visit they don’t spend much time browsing or discovering new products on site. Also post-purchase engagement is low. Customers are not incentivized to leave reviews to help others after they purchase a product. Brands desire a deeper, more targeted connection with customers and are looking for tools or platforms that drive relationship building and provide proactive customer service and information to reduce the customer friction to conversion.

According to Statista, there were 80 million social buyers in the U.S. in 2020, which equals a 30% increase over 2019. Experts believe that the social commerce trend would have continued to grow without the pandemic but that the pandemic accelerated its growth. Social commerce is growing 3X faster than traditional commerce . Although social commerce in the US is not yet predominant, it’s already booming in international markets like China and India. PinDuoDduo and Dealshare had aggressively grabbed share in these two markets. Vita and Malavika were inspired by these companies to solve the issues they recognized with U.S E-commerce but they knew that the social commerce experience would have to be personalized to the U.S Customer. They believe that social E-commerce is the next big thing in the US retail industry and a way of shopping that digitally native millennials and gen-z, who are a growing portion of the purchasing population and already have a purchase power of over $150B, are comfortable with.

How does it work?

Imagine you want to purchase a skincare item online. As soon as you open Flock, you are greeted with a social-media like UI that’s like a mix of Pinterest and Reddit. It is designed to make browsing and discovery of products seamless. Personalized product suggestions, purchases by others with matching skin types or skin tones to you, friend suggestions, video reviews, and groups ending soon are a few of the variety of posts you can scroll through. Flock utilizes a machine learning system to show products and content that match the customer’s preferences: brands, price points, ingredients etc. Product pages are designed to integrate relationships into the moment of purchase. They have video reviews, verified reviews from users who are similar to you, active group counts, and crowdsourced product info to help you decide which product to purchase.

After finding the right product that suits your skin type and color, the group purchase comes into place. Every product on the site can be bought in a group purchase for a discount. You can create your own group or join an existing one with one click. Sharing integration allows you to easily share the product link and invite friends to buy with you. The order will go through if the group member requirements are filled within 24 hours. The price on Flock will be much more competitive than the price listed on other platforms, thanks to the larger order volume.

What’s more, you can even save more after purchasing the product through rewards earned on the platform for interactions. Forming a group, sharing a product, leaving reviews, and making your purchases public are a few of the actions that allow you to earn rewards that can be redeemed for discounts on the platform and even free skincare during drops.

The group purchase model has been proved successful by several international players such as PDD (China) and Dealshare (India). The incumbents had viral user base growth when they first touched the market. Flock is optimistic about its future in the US market. Their market testing found that each user could bring in 2 users even without heavy promotion. Tapping into the network effects of social media and word of mouth marketing will pose an optimistic future for the group purchase area.

What are the differentiations?

Community, Social, Personalized, Interactive, Fun, Conversational. These are some keywords to describe Flock’s differentiations. Being socially native, Flock forms close connections with consumers. Flock uses a social media like UI design and reward system to drive customer engagement on site and to encourage consumers to leave reviews to help other users. The interactions with consumers will bring tons of valuable consumer data to Flock. Apart from upgrading its own consumer experience, Flock can also enable brands to connect more closely with customers and understand them better in the long run.

Flock starts as a marketplace platform where brands or sellers can list the product on the platform and sell to consumers through group purchases. Listing fees, marketplace fees, and advertising from brands will be the primary source of revenue under this business model. They see opportunity to expand out from just the beauty space too and in the future enter into categories such as shelf stable food and home décor.

What’s next?

Flock will release its first version product at the end of February. Sign up now for the waitlist to get premier access at https://www.flockshop.co/ . All waitlist customers will get rewards points that can be redeemed for discounts and free products!

In the long-run, Flock aspires to do more than a marketplace social commerce business. There are several areas that Flock will explore. They want to help brands solve the pain points of connecting with consumers by creating this platform that will allow them to provide proactive customer service and display content relevant to each customer.

They are democratizing the influencer market. Now there is no minimum follower count required to start making an income from reviews and posts. As long as customers find the content useful and engage with it, anyone can start earning money on Flock.

Social is key for Flock. They aim to continue iterating out the connected features on the platform. Product development plans include expanding their offerings to games, live streaming, and discussion boards to name a few.

Additional resources

Company website: https://www.flockshop.co/

Sign up now for the waitlist to get premier access at https://www.flockshop.co/ . All waitlist customers will get rewards points that can be redeemed for discounts and free products!

Get in touch with Vita and Malavika to learn more about Flock