Why We Raised Our Series B, and What We’re Doing Next.

A message from Amish Tolia and Jared Golden, Co-Founders and Co-CEOs, Leap, Inc. 

When we first started Leap, we knew we were attempting to solve a problem many brands face—how to make retail a successful and scalable strategy. But what we didn’t realize was just how much our approach would resonate with modern brands. Today, it’s clear these brands want to harness the incredible potential of physical retail. However, the cost, complexity, distraction, and risk are often just too much. Building a Platform that not only lowers the barriers to entry for brands starting physical retail, but also helps them expand within it, has led to enthusiastic adoption across industries, growth stages, and levels of experience.

At the start of 2021 we had just 11 stores across a handful of brands, with a total shopper file of less than a million customers—but our goals remained lofty.  How could we get to 10 million shoppers and onboard dozens of brands and stores?  Well, with our team and a sound strategy in place, we were able to exceed our goals. We now have more than 20 million shoppers in our file. That’s a testament to what we’ve already been able to accomplish. 

Our vision is that, in the future, every brand will choose to deploy stores via a platform like Leap. We’re building the world’s largest network of physical retail stores powered by data, systems, and scale, and we’re just getting started. We’re confident that our platform model is part of the future of retail, and we’re excited by the world class brands that are already on this journey with us. As we reflect on our recent funding and momentum coming into 2022, let’s take a moment to dive into why we believe we have the potential to revolutionize the world of retail.

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Omnichannel is the future, but not as we imagined it: In the face of the COVID-19 pandemic, brands have seen firsthand the importance of retail experiences that cross both the physical and digital world. Ecommerce is powerful, but 80% of consumer spend is still offline. Modern retail requires complementing your online business with physical stores to provide a better experience for shoppers. That’s because customers who discover brands and shop in physical retail stores are more valuable to that brand over time—particularly because they buy more frequently online and offline, return less, and actually spend more.  

Our Platform enables brands to scale with less distraction and better performance: We’re building the world’s largest network of stores, with capacity for tens of thousands locations. With Leap, brands leverage a single operating system—including all of our data and tools, our talent pool of highly-skilled sales professionals, and our premium locations—to build and scale their retail channel behind a single dashboard. With 50 locations today, we’re already seeing network effects that enable us to make smarter decisions for merchandising, operations, site selection, and marketing. This all has a significant impact on brands performance. 

Leap shoppers are very valuable: Brands love our platform as a customer acquisition channel, but it’s not just about adding new customers. It’s about adding valuable ones. Every customer who shops at a “powered by Leap” location is not only captured by our brands, but also added to our CDP. As our CDP grows, we’re able to leverage this file to generate more awareness for new stores, add more brands on the Platform, and ultimately drive more visits and sales for all of our brands. Today our CDP drives close to 5% of the net sales in Leap-powered stores, and this lift will continue to grow.

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We and our brands benefit from economies of scale: When we open stores, we look to concentrate them in proven markets and submarkets—often clustering many stores on the same exact street.  Given the large quantity of stores we operate, individual brands benefit from lower infrastructure and operating costs. In some cases, this yields a 20% cost savings. On top of that, brands don’t have to ramp up their own internal functions, so they benefit from >90% lower corporate overhead costs. In retail, every point matters. Over time, this will only get better too—as every brand we add to the platform creates greater efficiencies and drives portfolio optimization.

Our vision of the future: We believe experience is everything. We want shoppers across the country to have more choice, and to choose from a wider array of dynamic brands and categories when they shop. We want to help brands scale and break through the clutter with immersive stores. We want city streets and shopping centers to be more vibrant, engaging, and exciting, with even more brands to discover. And we believe our platform model is key to making this world a reality.

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Looking back at what we’ve accomplished in 2021, we couldn’t be more proud, or more excited by what lies ahead. Demand for our platform only continues to rise. In 2022 our growth is accelerating and we’re building for scale (we’re hiring by the way!). But more importantly, we’re helping reinvent the world of retail, and building deep and meaningful relationships with hundreds of brands and stakeholders in the process. We hope you’ll follow us into the future as we continue to build it—we can’t wait for what’s next!