DailyLook

It’s rare to find an ecommerce company that’s developing truly innovative technology. Most instead focus on merchandising, brand development, and customer acquisition. This is likely prudent given the challenge of standing out in a sea of online retail competitors and the vastly different disciplines of merchandising and engineering. Los Angeles-based women’s fast fashion etailer DailyLook, however, has one foot firmly planted in each camp, and as a result, the company’s patent portfolio is growing almost as fast as its monthly revenue.

Earlier this year, DailyLook unveiled several new features aimed at making its catalog of more than 3,000 fashion looks – or outfits – fully shoppable. With each look containing three to five items, this means that consumers can view details of multiple products and add them to their shopping cart without ever having to navigate to a new, item-specific page. This is core to the company’s strategy of selling looks, not items.

Today, DailyLook is unveiling its next technology-powered feature: StyleSets. These digital tearsheets allow the consumer to mix and match the company’s more than 1,750 SKUs into their own personal looks and then share these collage-like fashion layouts with the rest of the DailyLook community and across social channels. Users can start with existing templates or create their own. They can also superimpose these looks over a silhouette or photo of themselves or one of DailyLook’s stock models, and can upload images of items they already own or those which they covet from across the Web.

Tear sheets and virtual mannequins are far from unique in the ecommerce sector, as are “be the stylist” programs. But DailyLook has made a few tweaks to enhance the experience. Most importantly, each user-created StyleSet is instantly shoppable, much like the company’s own professionally styled looks (excluding those items uploaded from elsewhere online). In this way, the company has unleashed thousands of stealthy stylists and sales reps onto social media, with each of their creations linking back to its own product catalog. It’s also wisely tapping into the “outfit of the day” trend that is already pervasive across Instagram.

The company has also incorporated an element of gamification by featuring a leaderboard of the top StyleSets and their creators. These user-stylists will be rewarded with Look Points, DailyLook’s in-house digital currency that users otherwise earn through taking social actions or buying from the site. The company has also recruited several celebrities and online influencers to create and share their own StyleSets with their existing audiences.

It’s a smart strategy for spreading the word about the DailyLook brand and the new StyleSets product, but is one that walks the fine line of over-marketing. Online consumers are sensitive to being “sold to,” and can be similarly reluctant to “sell to” their friends and online connections. The fact that StyleSets are shoppable is a convenience, but one which may turn off some users.

Despite the rapidly evolving technical product, DailyLook is very much a fashion company with a focus on helping every day women discover their personal style. The company balances these two competing identities by operating distinct offices one focused on fashion and the other on technology. Founder and CEO Brian Ree oversee the company’s “fashion office” in Los Angeles’ downtown fashion district, in partnership with recently-added co-founder and Chief Merchandising Officer Shefali Khanna, formerly of Free People, Lucky Brand, and Old Navy. Fifteen miles across town, in the shadow of UCLA’s campus, the company’s third co-founder, CTO Eric Marston, oversees a small engineering team focused on improving the way consumers interact with fashion online.

It’s an unusual model in the ecommerce sector, but one that appears to be working for DailyLook.

Ree has overseen a period of rapid growth during which DailyLook has launched internationally and begun transitioning DailyLook toward selling more branded product rather than simply wholesaling third-party brands. Today, about 15 percent of the company’s catalog is proprietary, but these items include the majority of best-sellers and are typically priced toward the top of its price range, and thus account for a disproportionate amount of total sales, according to Ree. Going forwards, approximately 50 percent of new items added to the catalog will be those designed in-house, as DailyLook marches toward its goal of offering 7,500 SKUs – a level which Ree describes as “merchandise-scale.”

“Zara launches around 300 to 500 new SKUs each week, meaning they add 15,000 to 20,000 SKUs per year,” Ree says. “We don’t need to get to this level, but we want to get to a point where we have a comprehensive catalog of staple and unique pieces. Where we really want to stand out and what we want to be known for is styling.”

DailyLook has grown to more than 400,000 active customers and is generating low eight figures in revenue, according to well-placed sources, although Ree declined to comment on either figure. The company has raised just $2.5 million via an April 2013 Series A round, with backers including Upfront Ventures, RRE Ventures, SV Angel, Novel TMT Ventures, Matt Coffin, Thomas Mclnerney, and celebrity style-icon, Rachel Zoe.

The two-year-old company was operating near break-even prior to this capital injection, according to its CEO. But despite this fact, $2.5 million is pocket change in the ecommerce sector. Ree should be credited for putting smart growth ahead of the more unsustainable, revenue-buying strategies implemented by others in the category. But despite this prudence, DailyLook doesn’t have the proverbial fuel to pour on its fire once it dials in a growth model that works. If the company wants to become the next online behemoth, more funding will surely be needed.

As we have seen from others in the ecommerce category, building a large scale, sustainable business is incredibly difficult and costly. Online consumers’ attention and loyalty can be fleeting, making it crucial to deliver a unique and value-added experience.

Unlike most of its fast-fashion competitors which rely on memberships and flash sales to drive engagement, DailyLook has focused on building out a massive, Zara-like catalog of products. The company also aims to stand out by helping the average woman style herself more effectively. DailyLook seems to have captured the attention of a loyal and growing audience, and it’s betting that technology will be key to keeping its audience engaged and converting into customers.

[Image via DailyLook]