‘Game-like experiences have just exploded’: Tophatter’s Andrew Blachman on the future of entertainment-based commerce

It’s been a big year for online shopping -- not just for Amazon. The live auction site Tophatter, in fact, had a record year. The nine-year-old company saw sales grow 20% year-over-year (and said that were it not for supply chain bottlenecks, that growth would have been even higher). According to the company's president Andrew Blachman, Tophatter's focus on entertainment and discovery is what helped its popularity surge. Blachman joined the Modern Retail Podcast this week and spoke about all things digital commerce. More people are buying online, and customers are increasingly looking for new ways to discover items. Said Blachman, more people are open to entertainment-based commerce. This change has impacted how he's been building out the marketplace. Tophatter considers itself somewhat of a fun pastime for customers rather than a utility to buy necessary goods. Users scroll through its app or website (though most people use the app), which features thousands of low-cost auctions for random items. The average item costs around $10, but they go as low $1. It has hundreds of thousands of registered sellers, but only about 5,000 are usually active at a given time. The focus for the last year has been on perfecting the platform. While Tophatter has been around for over a decade, the company has gone in a few different directions that didn't work out. A few years ago, for example, the company tried to operate more like a traditional e-commerce platform by having sellers upload items for static prices, rather than risk selling them in an auction format where they could get undercut. "That was a huge mistake," said Blachman. Why? "While we gained a lot of inventory, or a lot of access to inventory from sellers that were afraid of risk and wanting to just price things at a fixed price, we lost their engagement," he said. Now, the company doesn't offer such a program. Instead, sellers are part of the auctions themselves, and Tophatter keeps them engaged by offering incentives -- like better product placement -- based on past performance. According to Blachman, the plan now is to continue growing while ensuring that it can handle all the back-end logistics. He also believes that user interest in the U.S. will only increase, as game-like commerce experiences continue to explode overseas. Right now, he's focused on getting more Americans on board. "It's a complex but a really fun business challenge," he said.