The digital commerce agency Blue Wheel Media and ecommerce marketplace agency Retail Bloom announced their merger on Tuesday.
Blue Wheel and Retail Bloom declined to share the deal price.
The partnership was “several years in the making,” said Blue Wheel CEO Eitan Reshef. Founded in the metro Detroit area in 2011 and 2015, respectively, Blue Wheel and Retail Bloom have crossed paths “socially and professionally” over the years, said Tom Sesti, Retail Bloom’s president and co-founder, who now becomes Blue Wheel’s president.
Reshef described the consolidation as “a merger in the truest sense,” rather than an acquisition, though the companies will unite under the Blue Wheel banner going forward.
Until this merger, both Blue Wheel and Retail Bloom were bootstrapped private companies.
“We have a track record of being successful without the capital,” Reshef said, noting both companies have generated between 40% and 50% year-over-year growth in the past five years or more. With the backing of Chicago-based private equity firm Longshore Capital Partners, which sponsored the merger deal, he said, the combined company can grow “at a similar or even an accelerated clip” than as competitors.
Bootstrapping only gets you so far in terms of scale and speed, Sesti said. “With all the consolidation that’s going on in this industry, you’re either going to move or you’re going to get left behind.”
The two companies have complementary strengths, according to Reshef and Sesti. Historically, Blue Wheel’s offerings focused on front-end marketing, advertising and campaign analytics. The “missing link” for Blue Wheel was everything that happens after conversion – the fulfillment side of the business – including warehouse, third-party logistics, customer service, syndication and tax planning.
“We realized that we were experts at the front end, they were experts at the back end, and we didn’t see a preeminent player offering a service that we are now calling ‘from click to ship,’” Reshef said.
“When we set our growth goals last year, we understood that, to grow, we had to provide clients with a full-service solution,” Sesti said.
In addition to joining their services and client lists, the companies will combine their proprietary tech. For instance, Retail Bloom’s internal reporting system for Amazon will be folded into Blue Wheel’s Companion product, an Amazon-specific advertising and reporting tool that pulls real-time data from clients’ omnichannel, advertising and marketing channels into a “clear and concise” dashboard.
Both companies cut their teeth as Amazon specialist ad agencies, and Amazon remains “a meaningful part of our business,” Reshef said. But Amazon “certainly doesn’t represent the vast majority of what we do” as an omnichannel retail agency.
At the moment, for example, Blue Wheel is concentrating on “any way that social can turn into commerce,” Reshef said.
TikTok looms large in that conversation. Users spend triple the time on TikTok as on other social platforms, and use TikTok as a search engine to find product. “How we get from that level of interest and engagement to a purchase is something that we’re obsessing over now,” he said.
TikTok is itself investing in a network of fulfillment warehouses in the US, which would make it more of an Amazon-esque ad platform with closed-loop purchase attribution.
More generally, Blue Wheel is “looking to the future and how these platforms are investing in ways to create a more frictionless commerce experience that doesn’t require you to go to an outside environment to check out,” Reshef said. “That’s going to be something that really grows over the next 12 to 24 months.”
