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Red Herring - November 21, 2006
Startup Shops Cyber Benefits
Mall Networks adds incentive programs as 400 merchants open for business in online mall on Cyber Monday.
Mall Networks, a one-year-old startup that promotes online shopping by adding special benefits for shoppers, said Tuesday it has been chosen to manage an online mall of nearly 400 merchants starting on Cyber Monday, the Monday after Thanksgiving.
The Lexington, Massachusetts-based company plugs benefits and incentives programs such as shopping points, airline miles, rebates, and charity donations in the online shopping business.
Many shopping incentive programs have been immensely successful in the brick-and-mortar shopping world, beginning with airline miles, which debuted two decades ago. Credit card companies later introduced their points programs and also tied into airline mileage programs a decade later.
But to date online merchants have introduced incentive programs individually or in conjunction with their brick-and-mortar businesses.
Mall Networks offers a hosted service that matches its clients, which include organizations such as the Arizona Diamondbacks, the Los Angeles Dodgers, Good Sam Club, NASCAR RacePoints, and Epilepsy.com, to hundreds of online merchants.
Closing the Gap
“With over $200 billion in online shopping taking place, there is a huge gap between all of that business volume and growth, and no corresponding benefits for the consumers,” said Kimathi Marangu, executive vice president of business development for Mall Networks.
“We see the same opportunities today that airline mileage programs had 20 years ago, and credit card points programs had 10 years ago,” he added.
On Cyber Monday online retailers such Barnes & Noble.com, CircuitCity.com, eToys.com, HSN, JCPenney.com, and Newegg will team with Shop.org, an online retail network, and Mall Networks to offer shoppers a number of benefits programs and other shopping-related freebies.
The incentives will run the gamut from coupon deals to points and free shipping at the mall’s web site.
“Online merchants like doing business with us because we get paid based on confirmed sales, not on clicks, and we work with quality clients such as NASCAR and the Los Angeles Dodgers,” said Mall Networks CEO David Andre. “Also our clients get access to more than 350 merchants without having to devote staff to the effort.”
Mall Networks raised $2 million in a second round of funding led by Venture Capital Fund of New England, and an undisclosed sum in a first round led by IDG Ventures Boston.
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