Royal Mail secures stake in Mallzee

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Royal Mail plc today announces it has secured a stake in Mallzee, the “personal shopping” app which aggregates inventory from over 100 fashion brands offering an additional channel to market for clothing retailers

With Mallzee, consumers can search, ‘favourite’ and purchase fashion items, and based on these preferences the app delivers personalised style recommendations

Royal Mail’s investment in Mallzee reflects the increasingly technology-driven nature of the delivery market. It helps align the business with the rapid growth in consumer purchases made from mobile devices and developments in shopping apps. It provides Royal Mail with exposure to new, high-growth revenue streams further up the value chain, as well as complementing Royal Mail’s existing parcel services.

Mobile continues to grow as an online shopping channel – 37 per cent of UK online shoppers used a mobile device to make an ecommerce purchase in the last three months¹ – and shopping apps are the fastest growing app category²

Together with its acquisition of Storefeeder in February 2015, the investment in Mallzee is part of Royal Mail’s continued focus on digital innovation. It brings innovative ecommerce capability to Royal Mail. In turn, the company can introduce Mallzee capabilities to many more retailers who are not already present on the platform.

The financial terms of the transaction are not material in the context of the Royal Mail Group as a whole.

Royal Mail plc today announces it has secured a stake in Mallzee, the “personal shopping” app which featured on Dragon’s Den³ in 2015. Mallzee brings together more than two million fashion items from over 100 retailers enabling shoppers to browse, ‘favourite’ and purchase a world of fashion from a single app. It offers an additional, complementary channel to market for clothing retailers, one of the fastest‎growing and largest market sectors for parcel sending.

Royal Mail’s investment in Mallzee reflects the increasingly technology-driven nature of the delivery market. It helps align the business with the rapid growth in consumer purchases made from mobile devices – 37 per cent of UK online shoppers used a mobile device to make an ecommerce purchase in the last three months¹ – and the continued developments in shopping apps, which are the fastest growing app category². It provides Royal Mail with exposure to new, high-growth revenue streams further up the value chain, as well as complementing Royal Mail’s existing parcel services.

Together with the acquisition of Storefeeder in February 2015 - the ecommerce technology specialist which provides order management, stock control, smart warehousing and courier integration for web merchants -the investment in Mallzee is part of Royal Mail’s continued focus on digital innovation and brings innovative ecommerce capability to the company. In turn, Royal Mail can introduce Mallzee capabilities to many more retailers who not already present on 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. While the entrepreneurial and cutting edge mobile capabilities‎that Mallzee have developed will complement our existing distribution services."

Royal Mail Group Limited is acquiring newly issued shares as 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 are not material in the context of the Royal Mail Group as a whole.

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About Mallzee

Mallzee is the “personal shopper” app which brings together more than two million fashion items from over 100 retailers enabling shoppers to browse, ‘favourite’ and purchase a world of fashion from a single app.

Mallzee combines the collections of high street retailers, designer and streetwear brands, and connects consumers directly with retailers to complete their purchases. The app also provides users with edits of the latest trends, celebrity-inspired fashion picks and editorial content.

The unique feature of Mallzee is the rating function which enables shoppers to give their opinion with a simple left or right swipe. These ratings build a digital profile of an individual’s fashion preferences which Mallzee uses to create a personalised style feed with recommendations on future fashions. Over 500,000 products are rated every day on Mallzee.

This rating tool offers a powerful source of real-time market research. The data collected by the app provides immediate feedback from consumers on existing collections and new products. This insight can inform retailers’ buying strategies, be implemented in bricks-and-mortar stores and used to reflect regional preferences for products or styles.

Mallzee generates revenue through commission from retailers, in-app advertising and the rich market research insights generated by its users.