- - Thursday, February 24, 2011


Last week I wrote about the growing number of inflationary signs of input costs — from energy and food to cotton and synthetic fibers. I concluded by saying that it appeared at the time and still does that the cash-strapped consumer is alive and well. With more consumer product companies and retailers reporting their earnings this week, investors are waiting to hear strategies designed to offset rising input costs or pass through price increases to consumers.

This got me thinking. How can consumers — cash-strapped or otherwise — shop smarter, given the backdrop of connected devices (smart phones, tablets, Internet-enabled TVs and so on)?

For the answer, I turned to Stephen Candelmo and Brian Vosburgh, the co-founders of Klaggle, an e-commerce startup that is harnessing the collective wisdom of the crowds in a new way. While I have known about Klaggle for some time, in part because I am an adviser to the company, Klaggle is a rising star in the greater Washington, D.C., area and the larger e-commerce arena.

Q: Stephen, what does Klaggle do?

A: Klaggle helps small and medium-sized online retailers improve their business through a new approach that we like to call “collective commerce,” where retailers and their customers harness the value from their interconnections and the collective wisdom of the crowds that is relevant to them. Our first solution is providing product ratings and review content that is based on the collective opinions extracted from millions of consumer reviews that is then syndicated to our retailer partners for use by their customers.

Now retailers of all sizes can quickly and easily offer unbiased, independent product-ratings review content that provides the volume, relevance and trust that helps convert shoppers to more confident and satisfied buyers.

Q: Brian, how does Klaggle help the consumer?

A: With our review solution, we’ve set out to solve the problem of “too much information, too little time” and helping the consumer more easily find “what is relevant to [me].” Product reviews have become a huge part of the shopping experience, but the time it takes to even just skim through, say, 500 reviews, is daunting and confusing. So, we thought that there has to be a better way to quickly understand what everyone is saying about a particular product other than manually searching and reading reviews from site to site.

Our technology finds and reads the reviews for the consumer and then packages it “in a colorful candy shell” — a small, easy-to-understand dashboard displaying an overall rating for the product, the number of reviews that rating is based on, and a breakdown of the most talked-about features or issues with a rating and review excerpts specific to each feature or issue.

So, for example, if you’re concerned about battery life, rather than skimming those 500 reviews yourself, you can click on the “battery life” button on our app, and read just a sample of those sentences from those 500 reviews that mention battery life.

Q: What distinguishes the company’s review solution from those of its competitors — after all, product reviews have been around for a long, long time?

Stephen: Well, besides our “memorable” name [laughter] … but seriously, everyone (both retailers and consumers) loves and wants reviews, but in reality only certain types of online retailers can actually provide them, owing to site traffic and sales limitations. Klaggle levels the playing field by offering speed to critical mass of reviews. With Klaggle, any size retailer can enjoy the power of reviews just like the mass e-commerce merchants without having to be that type of retailer in both size and reach. Only Klaggle analyzes what thousands of consumers have to say about a product and its specific features from across the Web, extracts what is most talked about and transforms these opinions into unbiased ratings and review content, versus just providing a tool for a consumer to come back and write a review after they make a purchase.

Q: The e-commerce market is more than $170 billion in size. Why are retailers turning to Klaggle to help differentiate their online presence?

Brian: Retailers understand the ever-growing importance of e-commerce (including future growth of mobile in that process), but not everyone understands that despite all the talk of retailers using Facebook and Twitter, the No. 1 tool to increase online sales is the use of consumer reviews and their influence, even with off-line sales. But as Stephen said, many retailers simply don’t have the time or resources to implement even traditional review solutions or are unable to generate sufficient reviews from their past customers that are meaningful to the current shopper. Our review solution solves that problem for retailers of all sizes.

Q: So Klaggle is more than just a simple product-review site?

Stephen: Absolutely. In a way, with our review solution, we are bringing the value and influence of a review site right to the retailer’s point of sale through our syndicated ratings and review content. We think that Klaggle can change how online retail can evolve and give small and medium-sized retailers an exciting new platform to compete more effectively — giving them strength in numbers while preserving autonomy and providing their customers an enhanced consumer experience. With Klaggle, both the retailers and consumers benefit — a win-win for all involved. We are passionate about driving innovation through the value of collective commerce and have some exciting plans for the future in fulfilling that mission.

Chris Versace, the Thematic Investor, is director of research at Think 20/20, an independent equity-research and corporate-access firm in the Washington, D.C., area. He can be reached at [email protected] At the time of publication, Mr. Versace was an adviser to Hanso Corp. doing business as Klaggle.

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