Rocksbox, the San Francisco-based “Netflix-for-jewelry” subscription service, is making major use of its data — and investors are taking note.
The four-year-old startup has garnered $8.7 million in funding in its Series A round, which totals more than $10 million in investments to date. Matrix Partners (who led the $1.5 million seed round), KEC Ventures and SignalFire participated.
According to company founder Meaghan Rose, this year’s aim is to broaden its customer base, with a focus on growing its fulfillment capabilities (which are all currently done in-house from the company’s main office), doubling down on data science and investing in its technology.
Rockbox is moving its headquarters to a 6,000-square-foot space in Union Square’s Tiffany building, in addition to keeping its current 6,000-square-feet space. It also will be making hires on its leadership team, which have yet to be announced.
The brand’s growth so far, Rose said, has been primarily word-of-mouth, with 70 percent of new members coming from Instagram directly. The company, for example, created the option for customers to comment on its Instagram posts with “#wishlist” to have items added to the customer’s wishlist, which means they will be mailed to the customer in a monthly “set.”
“It’s a pretty magical experience,” Rose said of the ability to add to one’s wishlist on Instagram. “It just shows up at your house.”
For a fixed monthly cost of $19, Rocksbox sends members three pieces of jewelry that are customized to the person’s preferences with an average value of $200. The customer can wear, return or purchase those items (at a discount). Rose said that 70 percent of its members leave feedback on each of the pieces they receive, and that 25 percent of members make a purchase from their Rocksbox set every month.
This business model is au courant with the sharing economy and “try-before-you-buy” mind-sets, and allows a company like Rocksbox to increasingly tailor products to its customers. That, combined with Instagram engagement that Rose estimates to be seven times that of peer fashion brands, also lets Rocksbox observe and capitalize on gaps in the assortment.
Thus far, the brand has introduced four separate in-house lines; Rose said that these are already doing 35 percent of the business, and this is something she hopes to grow with this latest investment.
“It’s not clear to our customer which pieces are a Rocksbox brand and which are an external brand,” Rose said. “We get as much ‘wishlist’ activity [on them], and those requests really speak to the insight that we’re able to get around those trends.”
In addition to the already great margins in jewelry, she said, in-house brands allow Rocksbox to have more control over the product quality — the color of the stones and medals, and the sizing. That ability to tap into the customer’s wants, while allowing her to test the product first, Rose said, increases the likelihood that she will ultimately make a purchase.
“We are reinventing the way women discover, buy and consume fashion accessories, by changing the idea of the traditional experience of ‘to buy or not to buy,’” Rose said. “It gets ride of the intimidation factor.”