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Urban Outfitters and 200 Others Start Selling Directly in Shopping App Wanelo

The move comes as mobile apps like Twitter and Spring are adding e-commerce capabilities to attract clothing brands that want to reach their customers outside of their own e-commerce site.

Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

For the last two years, the popular shopping app Wanelo has touted itself as the top digital mall where clothing brands can reach millennial shoppers who would rather spend time on their phone than in a physical store. But there was one problem that hurt the buying experience: Shoppers who found any product inside the Wanelo app had to leave the digital mall to complete the purchase on the merchant’s own mobile website.

That’s about to change. Wanelo is partnering with 200 brands, including Urban Outfitters and Nasty Gal, to let its users make purchases directly within the app. The launch of in-app buying, which started with a test that Re/code uncovered in August, will allow Wanelo customers to purchase more than 500,000 of the app’s 20 million products without leaving the app. Wanelo hopes to increase that ratio over time by getting more brands and retailers to work with it.

The move comes as mobile apps — from Twitter to the startup Spring — are adding e-commerce capabilities to attract clothing brands that want to reach their customers where they are increasingly discovering products: Outside of a brand’s own e-commerce site. Brands are also working with startups like Curalate to make it easier for customers to purchase products they discover on Instagram.

“They are concerned about millennials that are getting harder and harder to reach,” Wanelo CEO Deena Varshavskaya said in an interview.

Wanelo believes it has an advantage over these other services — especially mainstream social networks — because the app has been solely focused on product discovery since its launch in 2012. Its user demographics also don’t hurt; the vast number of people who use Wanelo are female and under the age of 30.

Each month, Wanelo attracts millions of people who use the app to upload product images from their favorite e-commerce sites and browse streams of products favorited by people and stores they follow. On average, each image on Wanelo gets saved to the personal feeds of 140 users. Wanelo has attracted around 1.5 million to 2 million visitors a month over the past year and a half, according to comScore. A Wanelo rep says those numbers are lower than the company’s internal count, but declined to specify by how much. Wanelo currently ranks No. 36 among free lifestyle apps in the Apple App Store.

For Urban Outfitters, the partnership marks one of the first times it has allowed a third party in the U.S. to sell its goods. The $4 billion brick-and-mortar retailer has nearly three million followers on Wanelo.

“We have been enamored with it as a social shopping network for a while now,” said Jim Davis, Urban Outfitters’ director of interactive marketing. “And I’m of the belief that the closer to discovery we can push the buying opportunity, the higher conversion will be.”

In tests this summer, Wanelo found that the rate at which its users purchased a product after clicking the Buy button was three times higher when the product could be purchased inside Wanelo. As a result, Wanelo is taking a cut of 10 percent to 15 percent, on average, of purchases made inside its app. Wanelo had previously generated revenue by taking a small affiliate fee for purchases its users made on other sites after finding a product on Wanelo. And it will continue to take those smaller cuts on product purchases from brands that aren’t allowing their goods to be sold inside Wanelo.

One way Wanelo will favor sellers that allow in-app buying is by prioritizing their products in search results and in certain product feeds inside the app. Davis said he will be watching to see if Wanelo users react to those changes.

Wanelo is working with payments startup Stripe to allow customers to pay with either a credit or debit card. Wanelo will soon add Apple Pay as another payment option, Varshavskaya said. After a customer places an order, Wanelo passes the order information along to the retailer or brand, which fulfills and ships the product.

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