Billing itself as "Costco in your pocket," Boxed is a new mobile app that promises to offer warehouse club savings without the need for a lengthy trip to the store.
Founded by former executives of the gaming powerhouse Zynga, the app launched last week in major cities in the Northeast with plans for further expansion this fall.
"For many years, the mobile gaming industry has pioneered the best practices in user engagement and enjoyment on smartphones," CEO Chieh Huang, a former director at Zynga, said in a statement. "We're now using all of that knowledge to attract and retain a similar, mobile-focused audience whose buying habits are quickly migrating away from desktops."
Boxed offers about 500 of the top-selling SKUs available in club stores like Health and Beauty, Household, Grocery, and Kids and Diapers. That's well below the 4,000 or 5,000 a Costco may carry in its stores. Boxed execs believe the limited and more targeted approach works better for shopping on mobile devices.
Mr. Huang, told VentureBeat, "People don't want to scroll through lots of items while on their phones."
Holding its own inventory supports the opportunity for higher margins vs. outsourcing delivery to existing retailers such as eBay Now or Google Shopping Express, according to TechCrunch.
To cut down expenses, Boxed uses regular ground mail. Shipments are expected to arrive within two days. Delivery costs $6.99 but is free for orders over $75.
For consumers, Boxed promises savings of an average of 54 percent per unit on most products compared to local drug stores, Mr. Huang told VentureBeat.
But it particularly saves time, including the "long drive, parking nightmares, winding aisles and being stuck at checkout behind someone's truckload of goods," that comes with club shopping, according to marketing copy. It claims the average warehouse club trips takes over 100 minutes.
"Boxed makes wholesale savings convenient for you; whether you're a college student without a car, a busy professional without time, or a new parent without the ability to make an all-day warehouse club trek," said Mr. Huang on the company's website.
The startup recently completed a seed round that totaled $1.1 million that included ENIAC Ventures, Social Starts and 15 Angels.
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