In today’s evolving retail environment, where consumers and retailers alike are leveraging technology to improve the shopping experience, it seems the line between startups and technology firms are blurred.
“I think while there’s a difference between a technology company and a startup, we’re a hybrid of both” said Hayley Barna, co-founder of Birchbox, to a room full of entrepreneurs at Forbes’ Under 30 Summit in Philadelphia last week. Her statement was in response to an audience member’s question on whether a technology company and retail startup are two different ideas or one in the same, a familiar topic of discussion.
Barna was joined on a panel by Rent the Runway Founder Jennifer Fleiss and Dannijo Co-Founder Jodie Snyder for a session titled She-Commerce: The Retail Revolution, which was moderated by ForbesWoman Executive Editor Moira Forbes. The three entrepreneurs discussed what it took to get their startups off the ground and the business savvy it takes to keep their companies growing. A lot of the questions asked focused around how each woman would define their brand. Is it an e-commerce-only brand? An omnichannel brand? And as content creation becomes more and more crucial to retail strategy, do they feel responsible to be content curators? While each brand is different, all agreed that retailers need to be be a little bit of everything to meet the needs of millennial consumers.
Fleiss, co-founder of Rent the Runway, a designer dress rental company, shared what it was like creating one of the first popular shareable businesses.
“When we started five years ago, shareables were not popular,” Fleiss said. “We were afraid social media could make things worse for our business model. Luckily, our customers had the exact opposite reaction and loved sharing their outfits.”
So much so that Rent the Runway now uses images from social media as a tool on its e-commerce site to show women what a dress would look like on their body type, helping to drive conversions. Rent the Runway is a $750 million fashion and tech company with over 5 million members, 1 million who actively rent.
Like Rent the Runway, Dannijo, a New York-based luxury jewelry company, leverages social media and our celebrity culture to drive sales.
“I think one of the things that really helped is we were one of the first companies to connect with beauty bloggers,” said Snyder. “We saw a lot of success when we partnered with our friend Leandra Medine [of the Man Repeller blog]. The #armparty hashtag really helped grow our customer reach.”
Dannijo currently has over 119,000 Instagram followers and #armparty yields nearly 770,000 results. In addition to partnering with popular bloggers, Dannijo has established relationships with celebrities such as Rashida Jones. The company’s jewelry has also been seen on the likes of Beyonce and Julianne Moore. Snyder credits Dannijo’s partnerships and investments in technology for the success of the brand.
“Everything we do is organic,” Snyder said. “We try to stay true to our brand message and look at every opportunity. And every opportunity isn’t always a good one, so it’s important to stay true to your brand’s vision and remember it’s OK to say no.”
Barna agreed and talked about Birchbox’s organic efforts that contributed to the brand’s viral success. She discussed Birchbox’s “unboxing videos,” where customers post videos to YouTube of their reactions to opening their Birchbox package. The phenomenon helped create a surge of visitors to Birchbox’s site. “It’s content that’s waiting to be shared,” Barna noted.
Critical to Birchbox’s success is its signature pink packaging, which helps create buzz when packages arrive at apartment buildings and work offices. “Neither of us [Barna and her co-founder Katia Beauchamp] are really pink people, but we knew we wanted the package to catch your eye, to be photographed,” said Barna. “There’s a built-in virality.” Both Fleiss and Snyder agreed that packaging is crucial to the selling process.
All three brands are testing the waters of brick-and-mortar retail. Dannijo has made its luxury jewelry available at high-end retailers such as Bergdorf Goodman, while Rent the Runway and Birchbox are opening their own store locations. When asked why the brands are expanding to a physical storefront in a digital era, Barna said, “you have to be where your customer is. Today, it’s what our customer expects.”