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Why Crate and Barrel is partnering with rising digital competitor Zola: Customers ‘want to shop where they want to shop’

Retailers who don’t keep up with a digitally savvy millennial customer base will lose out, according to Zola CEO Shan-Lyn Ma.

Crate and Barrel CEO Neela Montgomery, center, speaking with Zola co-founder and CEO Shan-Lyn Ma, right, and Recode Editor at Large Kara Swisher onstage at Code Commerce
Keith MacDonald for Vox Media
Shirin Ghaffary is a senior Vox correspondent covering the social media industry. Previously, Ghaffary worked at BuzzFeed News, the San Francisco Chronicle, and TechCrunch.

In the past five years, wedding-planning app Zola has risen as a competitor to major retail stores Crate and Barrel, Macy’s and Nordstrom in being the destination for gift registries.

The market of soon-to-be-married customers and their party guests that Zola is going after currently make up 10 percent of Crate and Barrel’s business — and a very important one, since they’re usually affluent and likely to buy again.

Which is why you might find it surprising that the home retail store announced today it’s partnering with the startup to offer 3,500 unique products on the Zola platform, which targets millennial couples who want everything wedding-related, from making a registry to sending invitations.

Why team up with a fast-rising rival? Crate and Barrel CEO Neela Montgomery explained her reasoning onstage at Code Commerce in New York.

“While we have a 40-plus-year tradition in gift registry and we’re the No. 3 player in the market, we recognize that our customers want to shop where they want to shop,” Montgomery said. “This is a way for us to partner with a digital company and also access customers in a different way.”

Zola co-founder and CEO Shan-Lyn Ma, whose company recently raised $100 million in funding, said that traditional brick-and-mortar retailers are wise to get ahead of the new wave of buyers. Around 47 percent of Crate and Barrel’s sales are online, Montgomery said, so the company is no stranger to realizing the value of reaching customers digitally.

“In retail, there’s a disruption under way,” said Ma. “Some retailers are sitting back and letting the disruption happen to them, and I think Neela and her team are participating in it with us.”

One way Zola says it’s having success reaching millennial customers: By launching a popular “Tinder for products” feature that suggests items for couples to add to their registry, and lets them decide by swiping right or left. Welcome to the future of shopping.

You can watch the full interview here:

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