News

Portland Business Journal: CartHook helps retailers snag more sales
Author: Malia Spencer
Posted: June 5, 2019

To read the original story, visit Portland Business Journal.

Jordan Gal thinks a lot about friction.

Specifically, the friction shoppers encounter when making online purchases. Are consumers asked to make another decision before they have even completed their original purchase? Does the consumer have to re-enter information they just gave you because you made an upsell? Are marketing offers shown when they will make the most difference? Does the online shopping experience from clicking on an ad to paying for the item at checkout look and feel the same?

At each step in the purchase process, friction can cause consumers to simply walk away from the purchase. For most online retailers, that's a problem.

“Amazon is not worried you won’t come back,” he said. “Other retailers are much more concerned with friction.”

Gal is founder and CEO of Portland-based software maker CartHook. His customers are retailers that use the e-commerce platform Shopify to operate their online stores. CartHook allows retailers to tailor the Shopify platform's consumer-facing parts to match their marketing and buying experience.

The service doesn't restrict merchants to Shopify's rigid themes or other experience aspects.

That flexibility is popular.

The four-year-old company counts more than 600 customers. Roughly $550 million in transactions have run through the platform in the last two years.

“The first year it was $100 million” in transactions on the platform, he said. “It was like a firehose to the face.”

In the last two years, the team has grown from four to 20 employees, with about half in Portland. The engineering team is based in Ljubljana, Slovenia, where the company’s first engineer lives. That first engineering hire, Rok Knez, is now the chief technology officer who has built the team around him.

Abandonment issues

Gal has a deep understanding of online retail. For about a year, he ran an e-commerce site that sold niche items that were difficult to find in wide selection offline, like solar lighting and hammocks. He sold the business in 2009 and started consulting with web-based businesses.

During that time he fiddled with an idea for a product that would deal with the common online issue of cart abandonment — meaning, when an online shopper puts items in the cart but never completes the checkout process.

“That was the first product: remind people of what they didn’t buy,” he said.

But staring at those abandoned checkout pages day in and day out led Gal to consider the bigger picture.

“The bigger idea is to build a better checkout page,” he said. 

That cart abandonment product launched as CartHook in 2015. In 2017, the company built CartHook Checkout, which allows retailers to customize checkout pages and add upselling options that pop up after the original purchase.

The options allow consumers to complete one decision before making another while reusing the payment token used in the last transaction, meaning they don't need to reenter their payment info. That upsell bit became popular and led to the company's fast growth, Gal said. 

The product's most recent addition is a landing page element that allows retailers to create custom landing pages — which can be tied to social media influencer campaigns — that will direct consumers to the online store.

“Our software allows them to optimize the entire funnel from clicking an ad all the way to the ‘thank you’ page,” a process where historically brands would lose control, he said.

Online onslaught

At this point, CartHook only integrates with the Shopify e-commerce platform. That means CartHook’s customers are also Shopify customers. However, this fall the company plans to test a second integration, though Gal wouldn’t offer many details.

The U.S. Department of Commerce reported that e-commerce sales in 2019's first quarter were $137.7 billion, up 12.4 percent from 2018's first quarter. E-commerce accounted for about 10 percent of all retail sales in the first quarter.

Retailers are increasingly looking to create a cohesive experience across desktop, mobile and brick-and-mortar shopping, known in the industry as an omni-channel experience, said Jennifer Nolfi, executive director at the Center for Retail Leadership at Portland State University.

“Companies are paying attention to that to retain customers,” she said. “With more shopping via mobile, it’s even more important that retailers are paying attention to their online presence.”

As consumers increasingly interact online with brands, they are also now shopping with brands through social media platforms or through online influencers, Nolfi said. Customizing each of those interactions and offering the same experience makes it easier for consumers to shop with and return to those brands.

That means CartHook will continue to grow. This year, Gal expects to hire another nine people, with five in the Portland headquarters. The added employees will help the company gear up for the busy holiday season. The company is seeking DevOps engineers, customer engineer and a product manager, according to its website.

Gal has mostly bootstrapped CartHook to date. He did raise a pair of early rounds, a $500,000 round from friends and family and $900,000 from angel investors, including Rogue Venture Partners. But in the world of software startups, the company hasn’t raised much money.

“I grew up in a traditional immigrant entrepreneur household,” he said, of his parents who moved from Israel to the U.S. when he was six. “Raising money was not part of the vocabulary. In software, I am a bootstrap proponent.”

With the new integration and expected growth, Gal still doesn’t anticipate taking on more outside investment.

“I don’t want to give up more control than necessary,” he said. “We have a wonderful culture. It feels like nice people working together on something challenging. I am hesitant to mess with that.”

Closer Look

Company: CartHook

Based: Portland

CEO: Jordan Gal

Founded: 2015

Employees: 20

Investment: $1.4 million

Revenue 2018: $3 million