Pando

IPO looming, Karmaloop Skips Trendy Ecommerce Shortcuts for Smart, Fun Marketing

By Michael Carney , written on June 29, 2012

From The News Desk

Ecommerce veteran Karmaloop is learning some new tricks. The 12-year-old streetwear company is on pace to do $200 million in revenue this year ahead of a possible 2013 IPO, and it got there by not jumping on ecommerce fads like daily deals, celebrity founders, or monthly “stuff in a box” plans. Instead, it’s stuck to what it knows: great merchandising, speaking the language of its customers, and damn good marketing. This week, Karmaloop has put together one of the smartest viral marketing campaigns I’ve seen in a while.

The company unveiled the site PoundSignTees (or “#Tees”) to turn its twitter followers’ most creative and outlandish tweets into t-shirts which can then be purchased on the site. As the site describes it, “Submit your own Tweet or nominate a homie’s Tweet. You can submit one Tweet per day. Get your votes by blasting it through social media and blogs; shameless self-promotion can’t hurt.”

Since the advent of ecommerce, countless companies have faded away over the years, but Karmaloop has managed to use savvy like this to stay relevant and grow into a quiet giant ahead of a potential IPO. The company is predicting approximately 50 percent revenue growth this year, up from $130 million in 2011 -- that’s after reportedly growing 80 percent last year.

The genius part of the latest campaign? Before a user can nominate or vote on a tweet, they must log into #Tees using their Twitter ID and then must follow @karmaloop on Twitter. Nominees can’t vote for their own tweets, but “are free to pump up their favorite tweets online using social media platforms and blogs to urge friends to cast their votes.”

With 4.5 million monthly uniques visiting the site, this should give a nice lift to their follower numbers. The only potential issue is that Twitter penetration may not be the highest in the streetwear crowd -- so possibly Twitter wins here as well with new signups. Karmaloop tells me that they worked closely with Twitter to make this campaign possible.

Each nominated Tweet is up for a vote for seven days. Every two weeks, the #tee designs receiving the most votes will get their Tweet immortalized onto a #tee to be sold on Karmaloop.com “where it will be seen by millions of the Internet’s most style-savvy shoppers.” In late night infomercial glory, they then drop the awesomely cliche, “but that's not all.” The sender of the winning tweet receives a $1,000 Karmaloop gift certificate and “a bunch of their tees.”

The winning designs will be sold as part of Karmaloop’s #tee collection, which features work by urban icons like Clinton Sparks, Hopsin, Freeway, and Chris Webby.

"A lot of my fans have been asking for #GetFamiliar tees,” said Grammy-nominated songwriter, producer, DJ and recording artist Clinton Sparks (no relation to Jordan Sparks or Sparks energy alcoholic beverages). “This was the perfect opportunity to make it happen while giving them a chance to make their own #Tee."

The digital content to physical good concept is not a new one. The most recent and popular iteration of this trend has been the Instagram to artwork services like Instacanv.as and Printstagr.am. The difference is that Karmaloop has found a way to gamify the process and drive awareness for its brand.

The Karmaloop platform also includes KarmaloopTV, PLNDR, BoylstonTradingCo, BrickHarbor, Karmaloop Europe, Kazbah Underground Brands, ladies only site MissKL, 11 private label clothing brands, and a partnership with Chinese luxury brand distributor Xiu.com. KarmaloopTV launched in 2008 and received 69 million video views in 2011. Earlier this year, it launched one of the 100 premium content channels on YouTube. Plans for a traditional TV channel in partnership with Comcast were put on hold earlier this year after delays on the network side pushed the launch to 2013.

Karmaloop is headquartered in Boston, with offices and a TV studio in New York City, an office in LA, and a Karmaloop Europe headquarters in Denmark. The company is backed by $35 million in venture capital from Insight Venture Partners.