Forbes: How This Company Revolutionized The Online Subscription Service With Stars Like Jessie James Decker
This year, JustFab is celebrating their 10-year anniversary and by the looks of it, everything…read more
by Kate Nishimura | Mar 31st, 2020
Retail may be stalled across the globe, but prior to this cataclysmic shift, the sector was undergoing a metamorphosis.
Much has been made of the meteoric rise of e-commerce, but it’s the innovators of the online space who are truly revolutionizing the way consumers shop. Direct-to-consumer startups are engaging the digitally dependent on a near-constant basis, while resale and rentals have become a way of life for fashion lovers who crave a constant influx of newness with a more sustainable footprint.
Subscription-based models have also proliferated over the past decade. These companies have found a way to become more than just purveyors of product, but platforms for ongoing engagement.
Online fashion firm TechStyle has amassed a stable of such brands, many of which have become household names—or at least constants on consumers’ Instagram feeds. JustFab, ShoeDazzle, Kate Hudson’s Fabletics and singer-turned-fashion-mogul Rihanna’s Savage x Fenty line all rely on membership models that keep shoppers coming back every month.
Daria Burke, the newly minted chief marketing officer for apparel and footwear e-brand JustFab, told Sourcing Journal that the service’s 2.5 million global members, dubbed “VIPs,” view themselves as part of an exclusive club defined by a passion for footwear and unique styling.
The brand operates on a flexible membership model, she said, wherein VIPs pay $39.95 per month for access to savings and perks on a constantly rotating range of shoes, clothing and accessories. The fee can be used to purchase items each month, or members can choose to stockpile their dollars for special shopping events or a seasonal spending spree.
“Because our members agree to share their preferences with us, like their sizing, favorite colors and preferred styles, we can design directly for their tastes,” said Burke, who claims the brand is able to predict its membership’s product demands with 95 percent accuracy. The reliance on historical data eliminates “the sort of inefficiencies that plague other brands, like wasted inventory or customer reacquisition,” she said.
Because JustFab personalizes product assortment and targets consumers who are already bought in, Burke said, the company’s overhead costs amount to just half of the expenses incurred by traditional retailers.
The company releases new collections at least once a month, if not weekly, Burke said, adding that JustFab buys deeply into styles that its designers believe will win with consumers up to a year in advance, but also reserves some wiggle room to “chase trends as they are emerging.”
The strategy allows for last-minute, just-in-time additions to the brand’s seasonal roster. “If we’re seeing that the PVC trend will continue into the next season,” Burke said by way of example, citing the clear-strapped sandal styles that have recently graced the feet of influencers, “we’re nimble enough to design and manufacture that style within a couple months.”
The company tests these experimental silhouettes in small quantities with its most active and engaged VIPs. Based on their short-term performance, JustFab can make the decision to fully embrace the styles and buy in more deeply, or move onto the next would-be trend.
“As a fashion company powered by technology, product development is both an art and a science for us,” she said. A full-time team of data scientists works side-by-side with designers to leverage historical data against predicted trends, she said.
“Our data scientists inform our designers and merchants in real time what is selling, what’s not converting, and what our members seem to be looking for, so that our team can optimize our product and site merchandising strategy almost immediately,” Burke added. Changes in media and marketplace conditions can also influence consumer appetites.
In addition to crafting an incredibly wide array of new products, the company is continuously prototyping and refining applications and AI algorithms to power the consumer’s experience on the site and deliver goods more quickly.
Despite the manifold behind-the-scenes benefits of harnessing modern technology and data analytics, Burke said the company still has to work hard to reach consumers in a crowded retail landscape.
“From a marketing perspective, we take advantage of both emerging and established platforms from TikTok to Facebook, as well as more traditional channels like linear TV and streaming,” she said, adding that JustFab is perpetually seeking the “next hot platform” with which to reach new audiences.
The company’s marketing team also works to cultivate relationships with a multitude of influencers and celebrities, which Burke said has raised brand awareness significantly over the past two years, “driving a surge in new members.”
No brand is immune to the current downtrends in the market, though, and the coronavirus’ impact on retail has been impossible to ignore.
“While we’ve faced headwinds before, this current crisis is unprecedented,” Burke said. “As with any retailer, it is putting pressure on manufacturing; however, our diversified supply chain is helping to minimize the impact.”
JustFab sources materials and concentrates production throughout a number of geographic regions, she said. The company has operations in California, South America, Africa and Asia. “This allows us to minimize disruption when there are challenges such as trade conflicts,” she added.
Burke demurred on offering sales projections, saying it’s still too early in the season to assess the virus’ impact, but said memberships and sales have thus far remained “steady.”
Consumer appetites have changed, she admitted, with shoppers now being forced to stay in, work from home, and generally avoid socializing in crowded places.
“We’re seeing our members lean into cozy layers like knit sweaters and slip-on sneakers that work with their current stay-at-home lifestyle,” she explained. The company’s membership model has actually been a boon to business, with some VIPs opting to save up their credits for a future where brunch dates and happy hours don’t seem so out of reach.
Should those happy times come sooner than anticipated, Burke predicts shoppers will leap on warm-weather trends with gusto. JustFab shoppers have demonstrated an affinity for mule styles paired with denim and dresses, as well as “comfortable, casual styles” like flatform sandals.
Once the weather begins to turn, Burke said shoppers can expect to see the popular square-toe trend, which has graced this season’s iteration of the naked sandal, extend to boots and booties for fall.
In the meantime, though, the company is focused on maintaining its close-knit community through the uncertainty, Burke said.
“We want to be there for our members no matter what,” she said. “So whether they choose to skip months, accumulate credits for brighter days ahead, or stock up on comfortable clothes, that’s fine with us.”