UK postal operator Royal Mail has bought a stake in Mallzee, a “personal shopping” app which offers customers a wide choice of over 100 fashion brands as an additional sales channel for clothing retailers, who represent one of fastest?-growing and largest market sectors for parcel shipping.
Royal Mail said its investment in Mallzee reflects the increasingly technology-driven nature of the delivery market and helps align its business with the rapid growth in consumer purchases made from mobile devices and developments in shopping apps. This enables the company to generate new, high-growth revenue streams further up the value chain, complementing Royal Mail’s existing parcel services.
Mallzee brings together more than two million fashion items from over 100 retailers enabling shoppers to browse, use the function ‘favourite’ to select preferred items and buy any of the clothes from a single app. Based on these preferences, the app delivers personalised style recommendations to the user.
The postal operator confirmed the acquisition of Mallzee’s newly issued shares is part of a £2.5 million fundraising by Mallzee to further develop the business. Existing investors, including the Scottish Investment Bank, Par Equity and other private angel investors, are also participating in this fundraising. As part of the transaction, a Royal Mail representative will have a seat on Mallzee’s board of directors. The financial terms of the transaction were not disclosed.
Together with its acquisition of Storefeeder, a multi-channel e-commerce software for retailing, in February 2015, the investment in Mallzee is part of Royal Mail’s continued focus on digital innovation, with the possibility for new retailers to join the platform.
Nick Landon, Managing Director of Royal Mail Parcels, said: "I'm delighted to announce our investment in Mallzee. We think we can rapidly add significant value to the Mallzee business by introducing their solution to a wider audience. The entrepreneurial and cutting edge mobile capabilities? that Mallzee have developed will complement our existing distribution services."
According to Royal Mail’s Delivery Matters 2015 report, 37% of the UK online shoppers used a mobile device to make an online purchase in the last three months, up from 35% in 2014. A separate research from Forbes published in January 2015 showed that shopping apps are the fastest growing app category. Thus, sessions on shopping apps on iOS and Android devices increased by 174% year-on-year, including 220% on Android alone, up from 77% last year.
