Help for etailers—Luz uses data to help Davids go up against Goliaths
Let’s say you’re a small- to mid-size etailer. Maybe your business started in your basement. And way to go—you’re growing slowly but surely. You’re watching the competition on social, gauging which trends to invest in next, and making it all work.
But what if you could stay on top of product trends, inventory, and pricing by interpreting more than the tea leaves of social feeds and Google searches? What if you had the clairvoyance to see—in real-time—what’s really working for your competition? You could quickly, confidently iterate product development and promotions, wooing the retail zeitgeist your way.
That’s exactly what Bountiful, Utah-based Five Dancewear did when they used competitive data insights to forge ahead with a new product concept. And that new product? It sold out the day it dropped.
The struggle is real
That was 2020. Today, the Silicon Slopes startup empowers even more Davids to face off with their Goliaths. And the competitive insights company just got more stones for those slingshots, securing $5 million in a seed funding round from Album VC and Peterson Ventures.
While working with his wife, Lisa, the COO of Five Dancewear, Wilson got curious about how small businesses approached product development and the way they rely on social media trends to home in on the next big thing.
“For these small businesses, creating new product usually costs about $50,000, which is 10 percent of their annual budget. It’s a big decision for them,” Wilson says.
As a data guy, he decided to see what he could do to help. He crunched social media data, website traffic, and sales volume—by buying data from credit card companies—and delivered the results to Five Dancewear CEO Michelle Boley.
“Once she saw what was actually selling, she had the drive to go and create that product,” Wilson says. “She launched it, sold out the same day, and they doubled their money. Now, it’s the second top-selling product of all time.”
Boley pulled Wilson aside and told him that if he started his own company, she would be his first client. Wilson got a few close friends to “gamble their financial futures” on it, and Luz was formed in September 2020.
Data makes the difference
Initially, Luz courted its services to larger companies like consulting firms, banks, lending institutions, and private equity firms. “We started going after big contracts to fund what we really wanted to do—serve customers like my wife’s company,” Wilson says.
While those big guys are still a portion of the company’s business, Wilson says, Luz flipped the model last August and began going after small B2C brands. “Most of the success has come from the switch,” he says, adding that recent seed funding will help Luz continue that momentum.
Large companies can throw millions of dollars at building complex financial models, Wilson says. “They pore over this stuff. They have entire organizations looking at human behavior. Nike is doing that to try and grow 20 percent. Companies like my wife’s are trying to grow by 200 percent.” Affordable subscriptions to Luz’s data-as-a-service model give small businesses a place at the table.
Wilson says Luz tracks metrics like what’s selling—every single product, every single day—as well as how competitors are pricing products, what ad channels they’re using, and how those ad channels are converting. The company’s stats tell the story: Luz tracks over $60 billion in sales monthly, 500 million SKUs daily, and 280,000 e-commerce sites hourly.
The data is then presented in a dashboard that’s digestible for even the least tech-savvy among us. “Someone with zero skills, like, Excel is tough for them—this is simple and easy enough for them to use so they can get maximum value,” Wilson says.
Luz’s insights have made a difference for clients like the Utah-based apparel company, Böhme. Wilson says when Luz first met with Böhme’s founders, they helped the retailer see how to cut through the competitive clutter.
“Böhme has 10,000 products. You can’t go toe-to-toe on 10,000 different playing fields. But we can give you 10,” Wilson says. “Most companies make 60 percent on less than ten products. Focus your ad spend on taking away those ten products—if you can capture those ten markets, that’s a manageable size. A lot of what we try to do is simply cut through all this noise of what’s on Instagram, what’s on the home page. Most companies put stuff on their home page they want to get rid of, not their best products. Luz cuts through all that noise with cold hard numbers.”
Utah state of mind
Wilson says Vivian Böhme, CEO, was one of the first to gamble on Luz. She’s now an investor. “She’s created a couple of successful product lines based on our information, as well as ad campaigns. It’s allowed her to add another 30 to 50 members of staff, and Böhme’s in six or seven states now. I couldn’t talk more highly of her.”
As the CEO of a rapidly growing company, Wilson talks highly of the Beehive State. “When I graduated college, I moved to California. My wife and I worked in San Francisco. Being in that environment and seeing how people start companies, I brought that back to Utah,” he says. “I was looking for the right opportunity after having seen business through that lens. Utah is a great place to start a business. The talent, the capital market, it’s phenomenal.”
And for all the go-getters and up-and-comers out there, Luz’s data insights just might help keep the dream alive for small etailers everywhere.