Taking on Amazon: Commbank investment Little Birdie taps bank app customers in race for scale, promises retailers, brands discovery and data, with sights on Facebook, Google
CommBank's $30m investment in start-up Little Birdie is now live in the bank’s app, tapping 6.5 million customers for retailer and brand ecomm sites like The Iconic, Dan Murphy's, Bunnings, Harvey Norman, Myer, Lego, Nike, Apple, Revlon - and even Amazon - to rapidly scale. CMO David Jennings said the plan is to become “the home page of shopping” and the ex-Uber, Reckitt and Mondelez marketer is channeling Spotify to bring retailers discovery – and give them back first party data. Meanwhile, CommBank’s walled garden begins to take shape.
What you need to know:
- CommBank invested $30m into retail platform Little Birdie pre-launch.
- Today, the platform goes live in the CommBank app, bringing exposure to millions of banking customers to Little Birdie and its retail partners.
- CMO David Jennings told Mi3 the aim is to scale rapidly, go global, and disrupt Google and Facebook’s “concentration of power” in bringing traffic to retailers.
- Meanwhile, the platform also promises to give retailers back the first party data that other marketplaces are keeping to themselves.
- Little Birdie is just one plank in CommBank’s strategy to take on global tech with a walled garden of adjacent services unlocking customer consent.
We know that marketplaces are eating the world and retailers losing access to first party data, their customer data, is becoming an increasing problem. We want to make sure for retailers that we're not taking that off them – that they will capture the consumer data; that they control the experience.
Little Birdie CMO David Jennings spent the last five and a half years at Uber. Now he’s aiming to scale a shopping platform to rule them all – and disrupt Facebook and Google along the way.
“We aspire to be the home page of shopping. We’re a Little Birdie with big ambitions,” the former Mondelez and Reckitt marketer told Mi3.
Little Birdie, in which CommBank took a $30m stake pre-launch, is channeling Spotify – instead of going narrow and serving shoppers product recommendations based on intent – it’s also promising to deliver breadth in discovery. So far it has 70 million products on the platform. Now it aims to quickly attract buyers. As of today, Little Birdie goes live in the CommBank app, which Jennings hopes will turbocharge growth.
Little Birdie’s ultimate aim is to be the marketplace that presides over other marketplaces, sending shoppers to what some might see as rivals – the likes of Catch, Kogan, even Amazon. The crucial difference for retailers, said Jennings, is that they get to keep the data – rarely the case when dealing with marketplace intermediaries.
“We don’t see [other marketplaces] as competitors,” said Jennings. “We send traffic to those retailers [and marketplaces].
The other problem we are looking to solve for retailers is the fact it is becoming much more difficult and expensive to acquire shoppers. Google and Facebook control over 80 per cent of online ads in Australia. But we believe Little Birdie can become a really important [traffic] source for retailers.
“We want shoppers to begin their shopping journey on Little Birdie,” he added, with the platform aiming to “put the fun back into shopping” by surfacing the best deals in one place, without shoppers crashing browsers with “millions of open tabs”.
“Once they discover a great product at a great price, then they bump out to that retailer’s website to complete the transaction. That partly solves the problem on the retailer side – we know that marketplaces are eating the world and retailers losing access to first party data, their customer data, is becoming an increasing problem,” said Jennings. “We want to make sure for retailers that we're not taking that off them – that they will capture the consumer data; that they control the experience.”
Likewise, Jennings thinks Little Birdie can ultimately challenge Australia’s digital duopoly.
“The other problem we are looking to solve for retailers is the fact it is becoming much more difficult and expensive to acquire shoppers. Google and Facebook control over 80 per cent of online ads in Australia. There is a concentration of power. But we believe Little Birdie can become a really important [traffic] source for retailers.”
Discovery and loyalty… and retailer media?
Shoppers discover products on Little Birdie, but to purchase them the platform asks shoppers to sign up as members, acquiring first party data and some zero party data – explicit interest and preference data such as what shoppers like, what brands they buy, etc – along the way. Purchase is completed at the retailer’s site, so the retailer also gets first party data – whereas most platforms own the chain. Little Birdie’s current model is as an affiliate, and commission is only paid on the transaction.
Jennings said Little Birdie has no immediate plans to monetise eyeballs by selling media – but he didn’t rule it out either, and if the platform is to truly disrupt Facebook and Google, it would seem a logical move as and when it achieves scale.
Jennings wouldn’t comment on whether the platform is eying an IPO – but given its rush to scale and go global, it’s a safe assumption. When it does, CommBank could be in for a bumper payday.
In the meantime, bringing a shopping platform into the app helps build out the bank’s ecosystem which it aims to use both as a customer retention tool by giving customers relevant offers, and to gain customer consent across adjacent services, while building a defensive wall against global tech platforms disrupting banking.
Inside CommBank’s walled garden
CommBank has made no secret of its plans to build a scaled walled garden, an ecosystem of relevant services that it can offer banking customers while building out fully-consented first party data. It has invested in several e-commerce pure-plays via ventures unit X15, and is about to launch a direct to consumer 20-minute mortgage service alongside a handful of small business and property-related start-ups that will be promoted to its 15m business and retailer customers, of which some 6.5m use the CommBank app.
Jennings said getting inside the app is a huge plank in Little Birdie’s plans to scale to millions of shoppers over the next 12 months – and means its retail partners can also access those banking customers, bringing “incremental reach and distribution” to the party, said Jennings.
“That’s going to be super important for our retailers … and it’s a real game changer for us.” Hence Little Birdie selling a pre-launch stake to CommBank. “It's the cash to allow us to scale quickly and become the Spotify of shopping, but they can massively help us along the way by giving us access to their large customer base.”
Scale or die
Jennings would not disclose growth targets but said the platform has aggressive plans.
“It’s certainly a scale game … which requires more shoppers on the platform. And as more retailers come on, we can give more exclusives to Little Birdie members, and the offer becomes more valuable,” said Jennings.
“Likewise, as more shoppers become members on Little Birdie, our personalisation technology improves and that community of savvy shoppers helps surface the best offers across the net. So there's a flywheel effect to this business that requires genuinely large levels of scale.”
For growth outside of CommBank’s walls, Little Birdie has so far opted for digital and performance channels, using specialist shop Sparro. The platform does not yet use a broader media agency, but it is likely on the radar as Jennings aims to shift through the gears and head up the funnel. He’s a fan of big brand brains such as Byron Sharp and Jenni Romaniuk, whose work around brand personification and characters inspired the platform’s recent brand overhaul.
Can Little Birdie get to millions of local customers in 12 months time?
“No comment on numbers, we’re officially only three months old,” said Jennings. “But we believe we’re solving a big problem on the shopper side and a big problem on the retailer side. We want to allow shoppers to discover the best in retail every day.
“That means more and more savvy Australian shoppers experiencing great offers via Little Birdie and equally important for retailers, sending them large cohorts of high intent shoppers direct to their platform,” said Jennings.
“We have huge aspirations to scale quickly. So what does twelve months look like? It looks like strong product-market fit and throwing lots of fuel on the fire. We have huge aspirations, and this is just the beginning.”
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