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Wanelo Tests In-App Purchases in Bid to Be the Amazon for Millennials

Because it can't live off affiliate fees forever.

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.

If they browse it, will they buy? Mobile social-shopping app Wanelo is looking to find out.

Since 2011, Wanelo, an app and a website, let its millions of mostly women users upload product pictures of clothes, jewelry and other items from retail sites like Forever 21 and Urban Outfitter. To buy any of them, users needed to click a button and leave the app.

That could change soon. In recent weeks, Wanelo has started quietly allowing people to order and pay for clothing from some retailers directly within its app. For example, I was able to proceed through the full checkout experience within the app — including entering shipping and payment information — for clothing normally sold by Nordstrom and Bloomingdale’s. At one point, the screen displayed a message indicating that it was checking to see if a product was currently in stock.

The test, which appears to be powered by tech startup Two Tap, is a milestone in the evolution of Wanelo’s business, which, until now, was the affiliate model where it received a small cut of sales from purchases at other retail sites made by customers that Wanelo sent along. The bet is that by letting users complete a transaction directly within the app and not sending them somewhere else, the rate at which people complete purchases will surge. It is also the first tangible sign that Wanelo intends to play a bigger role in online shopping.

Wanelo spokeswoman Karen To confirmed the test to Re/code, but cautioned that the one I came across wasn’t a finished product.

“Wanelo is all stores in one place on your phone (currently 350K stores are on Wanelo), and we’re 90% on mobile now,” To wrote in an email. “So it makes sense to test transactions. But what you see is just one of many beta tests we’re running, and it’s nowhere close to what we’re envisioning for the long term.”

“Affiliate marketing is not a transformative business model to be a long-term independent company, so it’s not about negotiating a bigger cut of revenue,” she added.

Wanelo is among a host of startups competing to build a mobile shopping experience on phones that is more about discovering new products than it is searching for stuff you already know you need. Since it seems unlikely that shoppers will download apps from every retailer they patronize, apps like Wanelo and competitor Keep envision a world where shoppers on the go can purchase from any retailer in a single app.

Wanelo in-app checkout buy button

“[F]or consumers this would be a paradigm shift,” To said. “Shop all the world’s products in one place.”

This test is Wanelo’s first step in that direction, though that vision is still a bit grander than what Two Tap can deliver. Two Tap currently has relationships with more than 200 top retail companies to make their products available for purchase in other apps. But that means, in theory, there could be some products on Wanelo not sold by any of Two Tap’s partners.

Keep, for its part, employs a less-automated strategy for now, but one that lets its users buy essentially any product displayed in its app. Its users place an order within the app, and then Keep buys the product for the customer. Then there’s Pinterest, which is enormously popular for browsing product photos but which seems more focused for now on creating an ad platform than a shopping site.

Wanelo’s app broke into the Top 10 list of free lifestyle apps on the iPhone in the fall of 2012 and stayed there into May of 2013, according to app data company App Annie. But over the past year, it hasn’t regained a Top 10 spot and was listed earlier this week at No. 44 among free lifestyle apps.

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