Serial entrepreneur Robert McGovern is shifting from head hunter to personal shopper.
His newest venture, Bethesda-based Cobrain, uses complex computer algorithms to suggest merchandise you might want to buy based on your shopping history, then delivers the recommendations directly to your smartphone.
Cobrain collects data from users’ e-mail receipts, in-store purchases and questionnaires to determine the kind of items they are most likely to buy. It then organizes its users into groups of people with similar taste.
That approach allows Cobrain to pull data from a wider array of merchants and users when generating recommendations, thus finding more items than a person could do on their own time.
“You are buzzing around the Web, shopping at all different stores, and no store has enough density” or data to make effective recommendations, McGovern said. “If you had a graph across all merchants, you could defeat the density problem.”
If you decide to buy, Cobrain directs you to the merchant’s Web site where you can finalize the purchase. The company makes money by taking a portion of the sales it facilitates.
Entering the retail market marks a departure for McGovern, whose past ventures focused on employment. He founded the online job board CareerBuilder.com, a company he took public, then took private, then sold for $450 million.
Next came Jobfox, a site that alerts you to relevant job postings from around the Web. But a serious head-on car collision in June 2009 put McGovern out of work for the better part of a year, and his leadership role at the company never fully recovered, he said.
“I’m about data and engineering, and this to me is a very interesting problem to solve,” McGovern said of the switch to retail. He hopes to expand Cobrain into other areas, such as restaurants, music, hotels and movies.
The company counts 15 employees, including three with doctoral degrees in data science, at its Bethesda headquarters. McGovern has largely funded the firm to date, except for a “few hundred thousand dollars” that came from local investors, he said.
Cobrain’s launch comes as millions of Americans have retail top of mind.
The holiday shopping season officially got underway this past weekend when retailers opened on Thanksgiving Day with their annual door-buster deals on electronics, children’s toys, appliances and other merchandise.
A holiday shopping survey from the National Retail Federation found 51.5 percent of shoppers plan to buy gifts online this season, up from 38.3 percent in 2004.
The same survey reveals that 32.1 percent of shoppers plan to compare prices on smartphones this holiday season, but only about half that number will use the device to actually complete a purchase.
Those numbers are slightly higher for tablets. Forty-four percent of surveyed shoppers intend to use the bigger-but-still-portable gadgets to compare prices and 29.7 percent plan to use them for actual purchases.
The shift toward online and mobile shopping has given retailers and third-party services like Cobrain access to greater volumes of data about what items consumers view and buy, as well as new ways to communicate with them that don’t exist in a brick-and-mortar store.
“If I know enough about you I can predict what you’re going to buy,” said Marshal Cohen, the chief retail analyst at NPD Group. “There are certain things that are predictable in your taste level. The more I know and the more history you build, the better I’m going to be able to do that.”
An increasing number of Web sites and mobile applications, including Cobrain, hope to do just that using technology, replicating the service provided by expensive personal shoppers.
Web sites such as Gilt or JackThreads, for example, serve up discounts on a limited selection of trendy clothing, jewelry and accessories. Other curated fashion sites, such as OutFitsMe.com, or stylist services such as Trunk Club, help you pair the right items to create an entire look.
“It’s about someone knowing more than you do about what’s available and what would be good for you,” Cohen said. “Some are about almost dressing you to be better, some are about efficiency, and some are about bringing a great deal to you that you would never have known about.”
“While it’s not something most people would know about right now, it very likely can be something many people will know about and experience in probably two or three years,” Cohen added.
Amazon.com was an industry pioneer in that regard, showing consumers suggested items to buy based on purchases they or others have recently made. (Amazon founder Jeff Bezos owns The Washington Post and Capital Business.)
Cohen said that technology has grown more sophisticated with time. Amazon and other Internet-savvy retailers communicate with customers before, during and after a purchase, suggesting items along the way they might also want to buy.
“That is the success of retail in the future. Other retailers are desperately seeking ways to replicate that transaction and if they don’t, they’re absolutely going to leave huge amounts of growth opportunity on the table,” Cohen said.