ShoeDazzle's New CEO on Killing The Subscription Model, The Company's New Apparel Line, and Ms. Kardashian

By Erin Griffith , written on March 29, 2012

From The News Desk

In the last year year, ShoeDazzle, the Kardashian-endorsed shoe-of-the-month-club company, has grown from three million users to ten million.

The company's subscription model has become the poster child for hot commerce startups, cribbed by the likes of Birchbox for makeup, The Honest Company for baby gear, and even Dollar Shave Club for razors.

Now, despite gangbusters growth, ShoeDazzle is throwing that model out the window. Subscribers to the $39.95 monthly shoe deal can continue to use the plan, but as of today, those of us with small closets and tamer spending habits can shop the site without committing to a year's worth of stilettos.

What's more, ShoeDazzle is expanding beyond shoes. Responding to feedback from its customers, the site will offer full outfits, including lingerie and dresses, all in the same $40 price range.

I spoke to ShoeDazzle head Bill Strauss about the changes in one of his first interviews, since quietly taking over as CEO last fall.

PandoDaily: You joined ShoeDazzle after spending a big chunk of your career at ProFlowers. What motivated you to leave?  

Bill Strauss: I was there for 13 years. I was the first employee and we grew it to 800. We raised capital, took it public, and sold it to Liberty Media. I never thought I'd leave. It was a great business, but this opportunity I thought was fabulous.

It has everything I love: It solves customer problems. It's a very, very big market and a disruptive business model. I thought this could be even bigger and better than what we did at ProFlowers. I'm shocked that I'm here, but it's been a great six months.

So, you have big news today. ShoeDazzle is now selling apparel. We know that women love, like really LOVE, to buy shoes. Do you think they'll be as rabidly excited about, say, cardigans? 

Shoes are definitely fun to buy. But our clients have said to us over and over, "It's fun to buy an outfit and be outfitted." They tell us about how great the shoes make them feel and the compliments they get, and if people want the whole outfit, then that's great. Now the entire shoe experience we offer will be even better. The fun and excitement of the shoes will still be there.

Where do you actually get the shoes? Will you be sourcing the apparel from the same place?

We direct source in China. Basically we control the whole supply chain. It'll be a similar model for apparel. Everything on our site is ShoeDazzle brand.

And you're doing away with the subscription requirement. I thought that was part of the beauty of your business model, the whole predictable recurring revenue thing.

There will still be a monthly showroom that our stylists provide to clients with no fee attached. The subscription model has been a tremendous success, and consumers love getting their showrooms each month.

But not all consumers want to shop that way. A lot of them want to buy once every three or six months. This opens up another whole universe of customers and will allow us to be bigger. We want to own a greater "share of closet."

It's still not a typical ecommerce company, because it's very personalized. We still offer products that are unique to you.

How important is (spokesperson) Kim Kardashian to the company?  

I think that Kim was a very important part of the success early on. She lent the company credibility, and we got access to her fan base that gave us a trial run. I would argue we wouldn't be here today without her.

But once they get past the trial period, it's going to be based on the experience we provide clients. That trumps everything else. If they're not satisfied with their experience, they're not going to continue to buy, even if Kim goes door to door selling.

(Ed. note: I'd probably buy if Kim knocked on my door. Just sayin.')

Besides the personalized showrooms, how do you enhance the online shopping experience for users? 

Our Client Service Team is a big part of it. They offer fashion and style training to give personal style advice to our clients over the phone and on Facebook.

When you walk through our client service center, there are flowers and candies and gifts all over. They come from our clients. They're so appreciative of their advice, and they feel so good about themselves, when they go out that they take the time to send gifts. It's an interesting relationship. I've been in the client service space my whole career, but I've never seen these kinds of relationships being built, and that's a pretty big key to our success.

ShoeDazzle has $60 million in venture backing from Polaris Venture Partners, Lightspeed Venture Partners, and Andreessen Horowitz.