Most Recent Articles In Digital
Latest Digital Articles
- Twitter to Bring ‘Stickers’ to Photo Shares
- New Twitter App Aimed at Understanding and Monetizing
- Instagram Hits 500 Million Users
More Articles By
Membership-based e-commerce sites are on the rise.
Andy Moss, founder of aggregated shopping site ShopStyle, will introduce FabKids today, a new e-commerce concept with a modified subscription hook — and he’s brought on actress Christina Applegate as creative partner of the site at fabkids.com.
This story first appeared in the August 2, 2012 issue of WWD. Subscribe Today.
The main idea: users sign up for a monthly membership of $49.95 — applied as a three-piece, head-to-toe outfit credit — to select an outfit for their daughters. Members fill out a style profile and receive selections based on it (so they don’t have to sort through all of the site’s product), and have the option to pick an outfit or skip the month if they please. Members are charged upon their first purchase, and all outfits include free shipping and returns.
This is the first venture from Personal Retailing Inc., Moss’ company that specializes in personalized e-tail experiences. After continuing to run ShopStyle and staying on as an executive at Sugar Inc., the parent company of the successful PopSugar, FabSugar, FitSugar and more that acquired ShopStyle in 2007, Moss left his post at the Sugar network last year to start working on Personal Retailing.
“I started to think a lot about what personalized e-commerce could look like,” Moss said of the “huge opportunity” he believes this category presents across the fashion and apparel categories. He clarified that ShopStyle is an aggregated shopping experience and FabKids is a completely personalized one. The latter designs, produces and merchandises all product — exclusively sold on FabKids.com — while ShopStyle aggregates items from many designers and drives traffic to respective retailers.
The idea is similar to what BeachMint did almost two years ago when founders Josh Berman and Diego Berdakin introduced social, membership-based e-commerce experiences with celebrity partners — and the company now boasts six properties. In October 2010, the duo tapped Kate Bosworth to codesign jewelry for JewelMint, followed by Mary-Kate and Ashley Olsen doing the same with T-shirts for StyleMint in July 2011. BeautyMint launched in October of last year with Jessica Simpson, ShoeMint launched in November 2011 with Rachel Bilson, HomeMint launched in May with Justin Timberlake and IntiMint last month with Brooke Burke. HomeMint is the only one that does not require a subscription to purchase.
Sucharita Mulpuru, vice president and principal analyst at Forrester Research who specializes in online and multichannel retail, strongly believes that this e-commerce model has significant potential.
“It takes elements of Costco, flash sales, Amazon, Zara and other fast-fashion retailers — some of the most successful shopping models — and puts it all together. I am much more bullish about this than I’ve been about Groupon or any of the other flash-sale sites,” Mulpuru said, calling it a “landgrab” right now for newer online companies such as BeachMint and Personal Retailing.
The modified subscription model is based upon pre-calculated demand and locking in the customer — but success depends on the size of a company’s mailing list. It’s the opposite of what flash-sale sites do, because instead of being constrained by inventory and what’s on sale, sites like FabKids can create the demand with their own exclusive product, Mulpuru explained.
Three-year-old ShoeDazzle (of which Kim Kardashian is a cofounder) started off on a subscription basis strictly selling shoes that were $39.95 a month for members. It moved away from the model several months ago because the company thought it could get broader adoption if it didn’t lock people in and opened sales up to a larger audience, according to Mulpuru. Now, consumers fill out a three-minute “style quiz” to obtain access to a personalized showroom with new shoe, jewelry, handbag, apparel and lingerie options on a monthly basis. The majority of the merchandise on the site still retails for $39 — with some dresses and lingerie priced at $50.
“Now they are just fast-fashion. It’s Zara with Kim Kardashian as the face. You get a far less compelling revenue model,” Mulpuru claimed. “At the beginning, it’s about repeat users and locking in a loyal customer base.”
“We are dropping that commitment to come every month because we want to give women the option to shop how and when they want to shop,” Bill Strauss, who took over as chief executive officer of ShoeDazzle late last year, told WWD.com this past spring in explaining the change.
An issue for all the subscription sites is that people will only be willing to subscribe to so many of them, so the platforms have to create a strong offer that members will want to stick with, according to Mulpuru. There is a window of opportunity for start-ups right now as major retailers that have a large number of stores and huge online databases have yet to really do something of this nature.
Ultimately, the major retailers are in a position to take advantage of this space, but in order for it to work, unique product needs to be offered — it can’t just be the same top sold at their physical stores, Mulpuru said. “They have to make it worth the customer’s while if they’re committing to this and looking at the e-mails because it’s something they can’t get anywhere else. If they don’t like it or an item they want sells out, they can flip credit to the following month or that type of thing.”
But how do BeachMint and Personal Retailing’s services differ?
BeachMint’s entities and FabKids are both social in nature, both are centered on providing a highly personalized experience, both cater to a demographic that’s extremely active across social media platforms, both offer a flat rate for product on a monthly basis (with some exceptions for special product such as a special handbag capsule collection released by JewelMint in June that retailed from $60 to $90 instead of the regular $30 fee) and both have celebrity faces.
But Moss contends his approach is mostly about providing a “need” business versus a “want” business and convenience — in a way that fits into parents lives affordably. He also believes the complete three-piece outfit approach “goes significantly deeper” than merely recommending one item.
“The reality is [that] kids grow, and they are constantly in need of new clothes. Parents are busy, and a shopping trip takes time — time that many parents don’t have,” Moss said. For him, the category was an obvious choice as the children’s apparel market has annual sales of $32 billion in the U.S. and more than $100 billion globally.
Back-to-school shopping is in full swing, and the early August launch timing seeks to take advantage of this. The site’s inaugural 100-outfit collection for girls’ sizes 2 to 8 will be centered around the back-to-school season (sizes 10 and 12 will roll out in October).
Applegate told WWD that “the getting-ready-in-the-mornings process” for school will become that much easier. “I’m always short on time. I love that FabKids makes it one-click easy to get a cute, wearable outfit — and at an affordable price,” she said. “All of the clothes look great together, so it’s really easy to mix and match.”
Extensions of the business are already in the works — the company is working on introducing boys’ and infant apparel in the near future.
Another wrinkle is the fashion component.
The site was designed to make life easier for the working mother or father — but also for the parent who is on the pulse of the latest fashion trends. A large network of mommy bloggers exists in the digital space, but Moss’ latest effort with FabKids taps into the stylish mom audience that closely follows fashion no matter where she lives — citing “cool moms in the media, from celebrities to Michelle Obama” as inspiration.
“I’m trying to perfect the balancing act of career and motherhood. There are a lot of great resources nowadays for moms who appreciate a little inspiration and staying up-to-date on the latest trends,” Applegate said. “It [FabKids] helps take the guesswork out of what is on-trend for kids, and what styles work together in a way that’s completely kid-appropriate, wearable and comfortable.”
Catering to this demographic is also what digital platform Elizabeth Street saw as a major opportunity with the multichannel approach it rolled out in late 2011 and earlier this year. An app and a Web site at elizabethstreet.com contain editorial content starring various stylish moms and includes a robust directory of shops, restaurants, museums and outdoor parks by city. The destination, also the first of Emanuele Della Valle’s media properties to launch under his Mediabend Capital portfolio, was designed to give uberchic moms from around the world a place to congregate and network online. Except there’s no e-commerce element.
So while Elizabeth Street’s audience is similar to the one Moss wants to reach with FabKids, the latter is less heavy on editorial content and more focused on delivering an e-tail experience for this market that is designed to streamline the shopping process.
“This can flex into a lot of different areas,” Mulpuru said. “Apparel is just one thing that you can produce quickly and it’s proven itself. It’s a smart model because you have prebooked demand, something we haven’t done in manufacturing in decades.”