Why we invested in Israel's Feel, which we call "the Uber of sales"
AGP invests in Israeli founders and helps accelerate their growth in the United States. Our approach has been described as a "pull" strategy: We spend hundreds of hours with our U.S. corporate partners to understand their technology needs, which drives and derisks our deployment of capital.
During our conversations with our U.S. corporate partners — including executives at furniture makers, global luxury-goods firms like jewelers, auto manufacturers, and the largest appliance makers in the world — we identified two consistent revenue and human-capital challenges ushered by ecommerce but accelerated under COVID:
1. Human sales associates matter for high-consideration products
Our corporate partners were deeply aware that their high-consideration products — from refrigerators and dining-room tables to wedding rings and exercise bikes — are best sold through a consultative sales process. And in fact data indicate that the vast majority of consumers (a staggering 88%) prefer to make big-ticket purchases in-store because of the overall product-interaction experience and the sales associates’ product knowledge. Not only do they prefer it, but it works: Shoppers who interact with in-person associates are 43% more likely to buy.
The challenge, of course, is that COVID decimated the impact of these 3.2 million in-store sales associates, as retail stores were shuttered or de-densified to minimize risk.
The result was a shortfall of nearly $1 trillion of high-consideration products as in-store sales dropped 50% during the pandemic.
So, our first insight from our corporate partners was a urgent desire to leverage their smart, experienced, underutilized, dedicated in-store sales reps to maximize sales conversations in alternative environments.
And in many cases where these sales reps had been furloughed, layed off or redeployed, our corporate partners were seeking access to new talent, sales expertise, influencers, or product experts who could assist customers “live.”
2. The maturity curve catches up with bots
The second insight from our conversations with our corporate partners regarded bot fatigue.
Specifically, over the last five years, these executives had collected enough data from their AI chatbots to know that bots are decent at answering simple, standard customer service inquiries, but are significantly less effective at sales conversions and relationship building. That was particularly the case at high-consideration products, where the value of the item is near or exceeds $1,000.
So despite advances in conversational commerce and predictive behavioral analytics, bots have not had a material impact on sales conversions for high-consideration products like jewelry, appliances, automobiles or furniture.
This research and insights, gleaned from first-person conversations with dozens of executives at the largest companies in America, coalesced beautifully with the knowledge, vision and experience of Oren Harnevo, founder and CEO of Feel.
A successful founder and former startup investor himself, Oren had identified the exact same trends while working with U.S.-based retailers, who were his initial design partners.
Oren's product vision wasn’t simply an interactive platform that empowered retailers to activate their in-store sales representatives in an online environment. Of course, Oren did accomplish that, developing a live video-based "showroom" that utilized in-store associates in real time. And the platform showed remarkable tangible results: Average order value of his customers increased 78%, and the number of items added to customers' carts increased 77%.
But Oren’s customer-centric approach responded more holistically to the needs of retailers, creating what could become the “uber of sales”: A platform connecting product experts globally to customers through established brands. Pulled in this direction by his clients, Oren has already begun realizing this vision faster than even we anticipated, recruiting and activating third-party sales reps for his retail clients.
Conclusion: Direct match with our corporate relationships
There was much to like about Feel when we invested: A visionary leader, a great team, a proven product, an overlooked opportunity, a sense of customer urgency, and an enthusiastic client base clamoring for additional features.
But the intersection with the needs of our corporate retail and CPG partners in the U.S. market made the investment even more clear. AGP was able to quickly validate the opportunity with executives at large brands and retailers, and it became readily apparent that our network in the U.S. could be an asset to Feel — in other words, we could help.