Social Shopping Fuels ModCloth Growth

Unusually high community engagement, user-driven initiatives, mobile growth and a love of all things vintage — that’s the formula behind the growth of ModCloth.com, which hit $100 million in sales just a decade after it launched out of co-founder Susan Gregg Koger’s dorm room back in 2002.

The online retailer, which markets vintage-inspired clothing, accessories and decor from more than 700 independent designers, has been on a crusade to “democratize fashion and home decor around the world” by letting shoppers help decide what goods it should sell via crowdsourcing.

Sarah Rose, senior VP product and growth, spoke with Chain Store Age contributing writer Barbara Thau about how ModCloth’s social-shopping model has tapped into changing consumer buying trends and outlined the company’s major growth opportunities, from mobile commerce to international expansion.

How has ModCloth’s crowdsourcing/social shopping model contributed to its 40% annual growth rate?

ModCloth is more than just a fashion retailer — we are a community. Our mission is to inspire personal style and help our customers feel like the best version of themselves. Community participation is fundamental to everything we do, and we enable our customers to participate in all aspects of our brand, including our Be the Buyer program, Make the Cut designer program and our shoppable image platform Style Gallery.

The engagement programs and features we have created to better understand what our community wants and what inspires them has contributed to our growth.

How do those programs work?

Through Be the Buyer, we work with designers to provide samples of products we are considering, and then allow our community to vote and comment on these designs to ultimately help us determine what the final product will look like. Historically, Be the Buyer items sell up to twice as much as others, and designs have received more than 20 million votes.

Style Gallery, our user-generated image gallery, allows our community to express their style and be inspired by each other. Users can upload pictures of themselves to show off their personal style, browse images, “love” other community members’ images and shop similar items.

Since Style Gallery’s launch in November 2012, more than 14,000 outfit photos have been shared, and those photos have been “loved” more than 800,000 times.

Whether through social media, our blog, customer care, or one of our on-site social platforms and programs, we always give our customers a voice.

Who is ModCloth’s target audience?

Our core audience had been standard-sized women aged 18 to 34 in the U.S. But our goal is to be inclusive of women of all ages, shapes, sizes and style types.

What sets ModCloth apart from its competitors?

As a leader in social shopping, ModCloth is changing the role that consumers typically play in the fashion industry. We employ a pull model where the customer is impacting the fashion choices that are available to her and her peers, rather than the traditional push model where retailers set the trends.

This creates a virtual cycle for our business: She engages with our brand and community, both on-site and on off-site social networks. She influences the merchandise we carry and shares the merchandise she loves. We use this data to enable a more relevant and personalized experience, and every time she returns, she feels a sense of ownership and belonging, thereby starting the cycle over again.

What’s the correlation between the pull model and conversion rates?

Social proof drives conversion, and we see this across the experiences ModCloth offers. From the “loves” on an item, to the rating of a product, to an outfit photo on Style Gallery, we’ve found that social engagement increases conversion rates.

One specific example of how this works is through customer reviews. Reviews with measurements and photos are both great resources for our girl to browse through and see how an item might fit her based on what others with similar measurements have said. This is why we launched Fit for Me, a feature that allows a customer to input her measurements and then sort through real customer reviews to find products most likely to fit her. Reading reviews and seeing photos of our items on community members similar to her helps our girl with her purchase decision, which leads to higher conversion rates.

How is ModCloth’s ‘mobile first’ edict driving business?

As of November 2013, mobile visits represented more than 50% of our total visits [because we’ve built] out an experience that both optimizes for each device, such as phones and tablets, as well as enables our customer to move seamlessly across platforms.

As a result, we are seeing strong results on mobile. For example, our average revenue per user (ARPU) on our iPhone app is twice that of desktop. And the ARPU of our iPad app is three times that of desktop.

What tops your agenda this year?

We plan to continue creating a rich mobile experience.

Keeping our eye on the future is also always top of mind for us. For example, wearable technology platforms like Google Glass are exciting to watch, as they offer so many opportunities in the retail space. Voice recognition and location services also represent interesting opportunities for expansion in the social-shopping space, and exploring how these and other mobile trends might fit into our mobile strategy will be on our agenda for 2014.

What are the biggest growth opportunities in 2014?

We believe that plus-sized clothing will continue to be a huge growth opportunity for us. Our plus business has more than tripled since 2011, and average order values with plus items are 25% higher than average. In 2014, we’re really excited to expand our assortment into full-range sizing, and our growth into private label will help us do this.

International expansion also represents significant growth opportunities for ModCloth. We currently ship to more than 130 countries around the world, and are seeing an increasing percentage of our sales coming from Australia, Canada and the United Kingdom in particular.

What new content initiatives are planned?

We’ve been working on more content with our community, including highlighting our top Style Gallery contributors, and we look forward to collaborating directly with our girl on content through contests, videos and more. And of course, we will continue to do collaborations with our amazing network of bloggers.

What’s the biggest challenge ModCloth faces in the areas of the business you oversee?

ModCloth is in the fortunate position of being a beloved brand with several significant growth opportunities. We are continuing to quickly scale the team, our systems and our processes to deliver on these opportunities, but scaling this quickly represents challenges for an organization. That said, it’s a great problem to have!