The Internet age has bred some really high spenders — and Moda Operandi just raised another $60 million to service them.
The round was led by Fidelity with participation from existing shareholders including New Enterprise Associates and Advance Publications Inc., the parent company of Condé Nast. This follows a more than $20 million Series D round that closed in December of 2013, bringing the total amount raised to more than $130 million.
The luxury e-commerce site turns four years old this month, and it’s gearing up for serious growth mode, starting with a total overhaul of its technology, from the front and back end. The site will be relaunched this spring, and proprietary software that will help the e-tailer’s personal stylists and VIP loyalty program is in the works, said Lauren Santo Domingo, cofounder of Moda Operandi.
Her goal is to create the most high-end retail experience out there, even as the competition in online designer shopping gets ever more intense with the likes of Mytheresa.com, now owned by Neiman Marcus Group, and Net-a-porter.com also aiming to raise their games. In addition to the obvious — product — this means providing optimal customer service and a platform that puts the focus back on the designers.
The site has an average order value of around $1,700 for its trunk show and in-season boutique business, but that number rises to $4,000 to $7,000 an order specifically for trunk shows, according to Santo Domingo. For the site’s “retained customer,” or one who has been shopping with it for more than three years, the average order value ranges between $5,000 and $7,000.
These numbers remain consistent no matter where the customer is shopping — whether on a computer at work or via Moda’s app, which launched in February 2014 and received nearly one million downloads in the first season.
Improving the mobile experience is key, because “the person coming back is the most valuable, the most engaged and has the largest amount of transactions,” Santo Domingo said.
She acknowledged that the business now exists offline in a real way — and this is a sector of the business that will continue to expand.
Moda put roots down in London in September — a gated space in Belgravia that doubles as a showroom and event space — and met sales goals for the fourth quarter within seven days. The next place the e-tailer will set up shop is Hong Kong, likely early next year, and the team is looking at the Middle East (a trip is planned in April to learn about the retail scene there). The opening of a second and significantly larger space in New York is in the works, and Miami is an option as well.
Customer acquisition is another area where the company will focus, according to Santo Domingo. Moda is partnering with Accordant Media to attract a customer who might be interested in its high-priced, runway-to-immediate-purchase e-commerce model. In broad strokes, she explained, Accordant’s technology will target and track the potential customer during her online journey, versus following the publisher, the typical acquisition route.
“We cannot rely on the usual chains that people do to get their customer, because ours are quite specific. They can’t be marketed to in ways that exist currently,” Santo Domingo said, acknowledging that acquiring this woman “comes at a price.”