Forget e-commerce or brick-and-mortar shopping, social shopping is where it’s at for Stella & Dot.
This story first appeared in the July 15, 2011 issue of WWD. Subscribe Today.
The accessories company, whose business plan is based on the “social selling” model of direct sales, projects retail sales will reach $200 million by year’s end. This is an almost 100 percent increase from 2010, where sales surpassed $100 million, and a 300 percent increase from 2009’s $33 million in sales. Growth has been exponential since the company’s launch in 2004, and in 2010, the business also received an investment from venture capital firm Sequoia Capital.
The seven-year-old firm implemented a sales strategy that focuses on utilizing various digital platforms to drive traffic to physical trunk shows, hosted by any of the brand’s 20,000 part- or full-time “wardrobe stylists.” Think Avon, but chicer — and targeted for the modern, highly fashion conscious woman in the digital age.
According to co-founder and chief executive officer Jessie Herrin — also the brainchild of that little Web site that revolutionized the bridal registry process, the WeddingChannel — the key is creating highly designed accessories and delivering them to consumers at an attractive value. Prices range from $24 for a pair of stud earrings to $228 for a statement necklace, and half of the collection is under $50.
“Every living room in the world is our store,” Herrin told WWD in the brand’s New York City showroom. “We create modular pieces that she can mix and match. The average consumer wears three pieces at once. Our pieces aren’t locked up in a glass case, it’s about playing with options that are easy to wardrobe.”
The brand’s personal trunk shows bring in 70 percent of the company’s revenue, and last year alone, stylists earned more than $50 million in commissions and bonuses.
Rather than putting a large percentage of the company’s budget into retail locations, Herrin said paying generous commissions to Stella & Dot’s highly trained stylists is one of the reasons the firm has seen so much success. Social media is also an essential part of the equation, and without it, the brand wouldn’t have been able to grow at such a rate.
“Our stylists aren’t only doing trunk shows — they each have their own branded sites through us and a Facebook page. The Internet makes people accessible. We love using social media, because ultimately it’s a way of crowdsourcing style solutions and delivering style and content to our shoppers,” Herrin said, adding that stelladot.com houses an “online university” with courses that teach the ins and outs of social media and merchandising.
Now, for first time since it launched, Stella & Dot will expand its product offerings beyond jewelry, unveiling five handbags for the fall season. A clutch; a convertible, three-way style; a cross-body bag; a wristlet, and a key pouch will comprise the first collection. Prices start at $44 for the key pouch and go up to $258 for the convertible bag.
The above are priced at a “sweet spot,” according to chief creative officer Blythe Harris. “Handbags are a natural extension for Stella & Dot. Our mission is to create style solutions for our customer with our jewelry and accessories. Like jewelry, handbags have the ability to be transformative in the way they can instantly update or completely change a woman’s look,” she said.
Additionally, the company has plans to move into Europe later this year. The first stop is the U.K. — with a London-based headquarters that will bow in October.