Sold Out in 120 Seconds, 300% Growth (Thanks Corona!)—Breaking down Aaron Levant's Gen-Z Shopping App
If you grew up in the 80s or 90s, you’re familiar with teleshopping. Pioneered by QVC, its was largely relegated to the daytime TV doldrums and featured not one, not two but an infinite number of “you’re-not-gonna-believe-this” deals for the low, low price of 19.99. Suffice to say, live shopping has traditionally never been aimed at quality seekers. Aaron Levant, however, is elevating teleshopping to hipster status, getting digital natives from Berlin to Williamsburg to tune in and shop til they drop on their phones. Founded by Levant in Los Angeles back in 2018, NTWRK is a platform that specializes in selling exclusive streetwear collections, design collectables and absurd swag using calculated drops. Levant spoke to OMR about how NTWRK generates impressive conversion rates, which strategy he’s banking on to add millions of additional customers in the coming months and why social media is only of incidental import to his company’s eCommerce endeavors.
Gadgets for dealers and collectors
It’s a safe bet that the global market for people who need a gilded money counter is small. Nevertheless, 40,000 people joined a recent virtual queue for a shot at snagging one. It was a part of a collab that NTWRK ran with Ben Baller, a jeweller known for decking out rappers stateside with iced-out (see diamond-encrusted) bling. “We’ve built an entire line of products based on his lifestyle,” NTWRK CEO Aaron Levant said of the co-op with Baller. In addition to the aforementioned money counter, the co-op featured a letter scale and a vacuum sealer—both of which were gilded of course.
These luxury swag articles are limited to a couple hundred and the day after the drop typically turn up on Ebay, StockX and the like at a massive markup (Check out the recent OMR Podcast episode with StockX founder Josh Luber). And these prestige items are the bedrock on which Levant’s strategy is built with which he aims to transform his live video shopping platform to the world’s leading online shop for exclusive collector’s items and streetwear.
The USP is exclusivity
Roughly one-third of all items offered on NTWRK stem from the platform operators directly, usually from collabs with brands and well-known personalities. The spectrum of articles ranges from clothing and collectables to consumer electronics. Levant calls this aspect of his product portfolio “the most exciting part,” because he and NTWRK are able to retain the bulk of the rights and therefore the lion’s share of the net value added. The remaining two-thirds stems from exclusive products from famous brands, e.g. Adidas and Beats by Dre, who either restrict their sale to the NTWRK platform or offer them on the NTWRK app first, as well as random items Levant’s people dig up online that they believe could be of interest to NTWRK’s community.
These unique finds show why massive media companies, like Warner Brothers and Live Nation as well as a-listers from Drake and producer/ Beats by Dre co-founder Jimmy Iovine to LeBron James, Bono and Arnold Schwarzenegger are among NTWRK’s most ardent supporters and investors.
A few weeks ago, NTWRK offered a coffee table book from Taschen. One that was anything but exclusive and one that could be found on Amazon for less. “This book has been on the market for a while,” says Levant. “However, I didn’t believe that our fans go to Amazon or traditional retail channels to find this amazing book about sneaker culture.” What followed was a test that showed NTWRK’s potential. It ordered 200 copies from Amazon—and sold all of them 2 seconds (!) after the drop.
He refers to the internet as a “vast place” where people are hardly able to locate what they really want. To this end, he and his 70-person strong team are “editing down” what’s available online and showcasing it on the platform. In addition to books, you’ll find a plethora of kicks and clothing items, as well as figurines, works of art and, most recently, furniture among the drops.
Drop, Drop, Drop
Each day, up to three drops take place. People who have signaled interest in a given product are sent a push notification and informed that said product is currently available. Upon opening the app, a live video plays automatically that features a host, oftentimes joined by stars or influencers for collab collections, who plugs and promotes the product just like you’d expect on QVC back in the day. The stream also includes a chat feature for interested parties to discuss the product and ask questions; the actual purchasing process is entirely embedded in the app.
While Levant declines to provide specifics on NTWRK’s revenue, there are a handful of examples through which we can gauge the platform’s potential. Levant told us that the article that has thus far generated the most revenue was a series of limited edition prints by Japanese artist Takashi Murakami (best known for his smiling suns; Kanye is a big fan), which resulted in over 1.5 million dollars in sales in fewer than 10 minutes.
Thinking that the grand vision for NTWRK is an online gallery for hardcore collectors would be reductive. The mission with NTWRK is to create an exclusive emporium that everyone wants to queue up in front of for the chance to get their hands on something exclusive that they are just able to afford: “To reach the goal of becoming a massive marketplace—which is the goal—it’s expanding into more categories.”
The next frontier for NTWRK: Women
To reach his goal of a marketplace for all, Levant is focusing on a heretofore underrepresented customer segment on the platform—products for female consumers, “which is an enormous category that could span from beauty, fashion, sneakers, wellness,” says Levant. “There is a huge amount of things within that category that we are not even touching. So to just by expanding into women’s, we think we can receive 30 to 40 percent growth of the business.” In addition to thangs for the ladies, decorative articles and furniture are also high on his list. He says that a recent test of some chairs that ran for 5000 and 12,000 respectively went extremely well.
The most impressive figure that Levant is apt to share is the conversion rate. Anyone versed in eCommerce can tell you that conversion rates are typically in the 1.5 to 2.5% range. NTWRK crushes that with 5 to 15% of viewers for a given drop actually end up purchasing the item. That figure towers even further over the success rate on social media, where Levant speculates the conversion rate to be in the ballpark of 0.5% or below due to the larger scatter advertising in a flooded marketplace entails.
The NTWRK CEO cites product curation, the meticulous process of determining which products to offer on the platform, coupled with FOMO (fear of missing out), a primary factor in the success of the drop strategy, for the impressive conversion rate. People are simply loath to miss out on the chance to buy a coveted item when given the chance, especially when in the back of their minds they know that they’ll see it later on Ebay at a massive markup.
Live and let Amazon Live
While it’s true that live shopping has quite the head start in places like China and is relatively speaking in its infancy in the occident, Levant is not sweating the competition. A closer comparison to Amazon of all entities makes it obvious why exclusivity and artificial shortages are the key to NTWRK’s success. In early 2019, Amazon launched Amazon Live and has since provided a place for merchants to hawk their wares QVC-style in live streams. Levant told us that he tunes in daily to monitor what’s going on—and that oftentimes means streams streamed to an audience of one or two.
“Amazon Live is the opposite of what we’re doing,” Levant emphasizes. His aim is to establish NTWRK as a brand that offers its customers products that you can only get there or are at least only relatively easy to acquire there. By late 2021, Levant hopes to push the number of drops to 10 per day. As reaching that goal inevitably means expanding the range of product categories, self-learning recommendation algorithms are being built which will inform customers only of drops relevant to them. “We will not be building other platforms. It will become more like a Netflix-like experience,” he says.
On course thanks to the Rona?
The biggest driver of growth for NTWRK has been—as it has been in the past months for eCommerce on the whole—the coronavirus pandemic. “Covid has been an accelerant for our business—like rocket-fuel.” Between March and September, sales figures were up threefold over the previous year.
A major factor in that success was an unplanned update. Pre-pandemic, NTWRK produced its live shows in a dedicated studio. But once corona hit and that was no longer possible, NTWRK sent the products home to the hosts, who began using their iPhones to film and present the products from the comfort of their own living or bedroom (A hurdle the Chinese teleshopping sector had to clear back in March, as this OMR piece details) “Even though we were forced to make this behavior change, the effect on the business has been dramaticaly better. Because the consumers are much more engaged with this content,” Levant says. Nevertheless, Levant welcomes an end to the pandemic, if for no other reason than it caused a central pillar of NTWRK’s original business plan to be put on the back burner: in-person events.
Before founding his digital platform, Levant was a pillar of the analog community for a couple of decades. First, it was in the streetwear industry, then as a founder of an event company in 2003 at the age of 19, which transposed his passion for clothing and graphic design into an event format. Fast-forward ten years and his tradeshow “Agenda,” part festival, part B2C conference, had become the biggest industry event in the world. He was also involved in building ComplexCon, the flagship event for New York-based media lifestyle startup Complex. It’s from this era that Levant amassed his contacts to thousands of creatives and artists, manufacturers and merchants who now form the foundation to the product pipeline for NTWRK.
Hybrid marketplaces a la NTWRK
His events were a kind of “marketplace,” says Levant. And NTWRK, he says, is basically nothing more than a digital extension of his previous endeavors. After launching the platform in 2019, NTWRK put on a handful of events that drew a total of 100,000. Then came corona, effectively pulling the plug on a core concept in the company’s strategy, even if only temporarily.
“Even if we were focussed on being a digital platform, I always believed that the best way to create earned media, user-generated content and this huge amount of organic marketing is to create in-real-life experiences to get people talking about you on social which then creates a global ripple effect digitally to drive people back to your digital platform,” Levant says.
What is essential for Levant is the direct access to customers. Whether its ads NTWRK runs on social media, its “shoppable” Snapchat show “The Drop” or the collaboration for Tiktok’s first live shopping format, the primary focus is on generating brand awareness. This also factors into the decision for NTWRK to drop a Billie Eilish action figure, which the artist herself presents in a live stream. Levant said that “she drove tens of thousands of new customers to the platform to buy her one specific product—That is meaningful growth in a period of a few hours.”
To save Events as a growth generating channel, NTWRK digitized it entirely. In August, its first online shopping festival “Transfer” took place. A two-day event only reachable through the app featured a non-stop program of exclusive product drops and gigs by popular artists. Despite the fact that Levant intends to produce shows in the company studios once that is an option and he hopes that by 2022 at the latest large scale events with attendees will be permitted, the unplanned digitalization has been nothing short of a serendipitous twist of fate.
Six digital shopping festivals in 2021
In the next year, NTWRK is planning on carrying out one shopping event every two months, the majority of which will be similar to “Transfer.” However, Levant has expanded the business plan to include a new segment. In December, NTWRK will host an external event on its platform for the first time. Levant and his team have been tasked to digitize the art trade fair “Beyond the Street,” which was cancelled just like every other relevant live event this year.
“Beyond the Streets” will feature products inspired by art, skateboard decks, clothing, decorative objects, as well as provide an opportunity to acquire actual works of art by artists. Prices start at around USD 5000 to 10,000 Dollar, says Levant. The most expensive item could command as much as USD 100K. An impressive figure for a purchase of art made by phone. “We believe this will probably generate millions of dollars in revenue,” says Levant.
NTWRK is also planning on further collaborations with established event formats. Levant says that there will be an announcement in a few weeks on the first event in the pop culture/entertainment sector. When we asked him about the impact corona has had on his plans to transform his platform to the world’s leading emporium for cool things, he said that “Everything is largely the same, except it’s going faster.”