After 18 years in business, e-tailer Bluefly Inc. has decided to shift gears again — but this time it really is different.
The online site is changing its operating model, moving to a marketplace business format from an asset-owned business setup. That change is a reflection of the influence of its private equity owner, Clearlake Capital Group. Along with the shift in thinking is a re-branding of the site and logo.
Heading up the charge is Carly Rosenberg, who was named president earlier this month. Rosenberg joined the company in 2014 as general manager and chief marketing officer. Her background is in e-commerce and digital marketing.
According to Rosenberg, the company’s three private-label brands — Wyatt for men and women; Hayden for women, and Harrison for men — will continue to be offered on the updated site. Of the private-label brands, the women’s are more developed, but the men’s business is expected to grow in time. Currently 80 percent of the private-label business is in women’s, while 20 percent is in men’s. Following the transition to the new model, the only inventory that Bluefly will own will be its private label collections.
The Bluefly business began shifting in August 2013 following Clearlake’s $13 million acquisition of an 89 percent stake in the struggling e-tailer for what was the equivalent of about a penny a share. Clearlake eventually acquired the remaining shares for 10 cents each. Founded in 1998, the company was a pioneer among fashion retailers, but it continually struggled with profitability.
Neel Grover, chairman of Bluefly and executive operating adviser at Clearlake, said shifting the e-tailer’s model was “actually the main reason we bought the business.” He’s the first to admit the model isn’t a new one — he used it when he was former chief executive officer of Buy.com, which was later sold to Rakuten of Japan.
According to Grover, “Bluefly is a good brand. It has good traffic and great relationships with its suppliers and customer base. We are bringing the [marketplace] model to Bluefly; the format is new to the fashion world.”
Under the new format, the brands on the site control their own price, with the e-commerce company getting a commission for each sale. Bluefly now only gets to set prices for its private-label lines. Grover said that under the new model, “brands get a higher profit from each sale than if Bluefly had bought the inventory on a wholesale basis.”
Helping Bluefly with the transition are Mozu and DynamicAction. The e-tailer is working with Mozu to utilize its e-commerce cloud platform. Jason Wallis, Mozu’s chief technology officer, said the platform’s software takes care of everything from content management to setting up promotions and building the landing pages. Mozu integrates the mobile and traditional desktop sites into one platform, so a promotion on the site shows up in both environments.
John Squire, cofounder and ceo of DynamicAction, said his firm is working on the data analytics side to help the site bring in more sales. “Data helps on the merchandising side to see which products are being seen and which are getting lost [because ] maybe the product is not categorized right.” His firm’s data allow Bluefly’s brands and vendors to better understand how consumers react to the merchandise on the site.