Tech Talk News: oBaz Wants to Rebuild the Online Deal

It used to be that online shopping was a refuge from the holiday scrum at the mall. Pajama-clad shoppers could curl up with some hot cider and casually tick off all the gifts on their list. Those were the days.

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Enter oBaz, which is either just another online curated boutique, or the next stepping stone on the path to wherever online shopping is headed.

What separates oBaz, which stands for “online bazaar,” from competitors like Fab.com is a major attempt at personalization.

Where Fab offers the same aesthete-targeted deals to every visitor, oBaz attempts to offer visitors a mix of products catered to their tastes. In a sense, shoppers don’t look for a store they like, the store fits around whoever “walks in.”

Or, at least, that’s the idea.

“We’ve organized the deals into ‘aisles’ that users can choose to become part of,” said co-founder Brian Ficho. “Once you choose a few aisles, we can start to target deals to you specifically.”

Personalized recommendations in online shopping certainly aren’t new — Amazon has been offering them for years.

But the online retail giant and others are still fundamentally search-and-destroy-style shopping experiences, targeted at shoppers in search of a particular item.

Eight-week-young oBaz is the brainchild of Ficho and Greg Caplan. The company took seed-stage investment from the founders’ former employer, Lightbank, which invested before this recent pivot.

Lightbank is the Chicago-based venture firm founded by Eric Lefkofsky and Brad Keywell, the well-known pair who also co-founded Groupon.

Like most very early-stage companies, oBaz still has lots to shake out before it could hit its stride.

The oBaz team, which now numbers six, is experimenting with different ways to build up a “product interest graph,” which will power its product recommendation engine — much like Facebook and LinkedIn are built on graphs of associations between people.

Its current beta product entices users to help build up their graph by playing a “hot or not” game.

In the game, the site shows a picture of a product to which the user can assign a thumbs up or thumbs down. Those preferences are then used to curate the products offered.

But both co-founders acknowledged their current “game” plan is an incomplete solution to the graph-building problem.

Clever customization aside, oBaz will be faced with the same costs of scaling that weigh on Groupon and every other daily deals site that depend on an ever-increasing flow of offers.

But oBaz’s unique model does give them an advantage. Deal sites like Groupon must constantly seek out new companies to source deals from, because many companies can only afford to use Groupon sparingly.

“At oBaz, we aren’t offering that kind of deal. We can maintain a constant relationship with a merchant, who is really using us to sell extra stock of some item,” said Ficho. “We can see how fast a certain deal takes off, then dial it back so that we only sell as many of something as the merchant has in stock — which means we can sell from that merchant all the time.”

If the future of e-commerce is personalization, then oBaz might be among the first to take a very important step for the retail space: Moving past recommendations in a expansive store and instead rebuilding the store for each customer, while filling it with merchandise that really exists.

[allthingsd]