How Estonian company ON24 is taking on larger competitors and winning
ON24 is an Estonian e-Commerce company offering nearly 100,000 different furniture and home decor items. They have fulfilled over 900,000 orders to date, including to the Finnish market. Offering a 14-day trial period and free returns, they only supply on-line and have no physical stores.
Then, they learned that a major supplier with a huge international brand with revenues of €45.1 billion had decided that the relatively tiny market of Estonia was worth their attention. Their particular business style is to have a physical location backed-up by a massive on-line presence. The Elephant was in the room for ON24.
Given their huge turnover, this major suppler would probably have better purchasing power than their competitors. So, if you know exactly what you want, it might well be cheaper there than elsewhere. But that is not how e-Commerce works nowadays.
In the old days, a trip to a retail park was almost a social event, spending a whole day looking at furniture, before deciding on the one you liked, and then having it delivered. Inevitably people bought as a couple, often with one enthusiast and one long-suffering partner desperate to leave, despite the offer of tasty meatballs if they behaved themselves.
Then along came e-Commerce and the trip to the retail facility was no longer required. The enthusiast could spend as long as they liked browsing on-line, while the other could pursue their other interests, ideally advanced skills in furniture assembly.
But the problem is that most e-commerce sites have for too many products, so you can never actually find what you want. Most visitors give up after a few minutes, and it is estimated that consequently 97% of the marketing spent on e-commerce is wasted. ON24 knew this and worked out that they had to focus on upmarket goods and have a more intelligent website to ensure a happy and loyal bunch of browsers.
The battle for the commodity market has long since been lost to Amazon, eBay Alibaba and a multitude of other eager web sites selling cheap stuff. Most buyers are only looking for the cheapest item, regardless of the fact that it might have been produced at very low quality by someone on barely survival wages in a Third World country and ultimately be destined for landfill.
But what makes them different is their AI-driven site, which intelligently understands how the browser’s mind is thinking and offers up what they actually want, in seconds.
This software comes from another Estonian company, Miros, founded by on-line retailing veteran Heikki Haldre, who previously built an on-line fitting system for fashion goods, Fits.Me, later acquired by Japanese retailing giant Rakuten. Heikki charged his initially sceptical AI team with the task of solving the challenge of intelligent browsing, where even giants such as Amazon and eBay struggle.
The concept was that a browser would give a description of what they were looking for, such as a sofa they had seen in someone else’s house or on TV. The Miros system swiftly offers up some pictures, and the genius of the system is that it understands and interprets the visitor’s browsing activity, then uses AI to offer up more images in real time, always ever closer to what they want.
Arti Kütt has many years of experience in logistics and e-commerce and now serves on the board of On24, responsible for creating and implementing strategies to boost efficiency and identify growth opportunities.
Heikki downloaded a large number of ON24’s stock items into a Miros system and supervised a short trial, comparing the performance of a test group using Miros against a control group using the current system.
Arti says that the results were outstanding. People found what they were looking for in seconds and instantly became vocal advocates for the Miros system. It is every website’s dream to have its users fall in love with their content, to return again and again and then tell all their friends.
Even better if they spend significant sums on high quality items that will give them pleasure and then impress their friends when they come around. They have become Influencers
My guess is that when these friends ask where their hosts found such desirable items, they will be instantly directed to the ON24 website. And if they do all decide to have meatballs to celebrate this happiness, they can go to another fine Estonian company, Bolt Food and have them delivered in minutes.
