Two years in, here's how BaubleBar is increasing women's metabolism for jewelry

By Erin Griffith , written on March 4, 2013

From The News Desk

Last weekend, the New York Times Magazine published a devastating excerpt from the book "Salt Sugar Fat: How the Food Giants Hooked Us." In it, reporter Michael Moss described ways processed food industry execs have maneuvered to get American consumers addicted their salty, sugary, fatty snack foods, all very carefully engineered to produce the most addictive "bliss point" among its "users."

This is not the comparison that Daniella Yacobovsky and and Amy Jain, founders of jewelry ecommerce startup BaubleBar, would like me to make, but in reading the Times piece, I couldn't help but think of my conversation with them.

We had discussed the ways two-year-old BaubleBar has essentially increased women's metabolism for consuming jewelry. Where a normal woman might buy a few pieces of jewelry a year, BaubleBar, with its aggressive merchandizing schedule, persistent editorial content, and realtime data analysis, has convinced them to shop -- or at least engage with the brand -- as regularly as every day.

They've turned casual customers into hardcore users, and it has been working. Last year, the company's order volume grew 23.5 percent each month. During that time the company raised a $4.5 million Series A round of funding from Accel Partners and Greycroft Partners.

BaubleBar's high turnover model has been most successful, ironically, in the offline retail world. H&M and Zara revolutionized apparel retail with their brand of fast fashion. All "fast fashion" means is that new inventory enters the store every week, an unheard of idea for the traditional retailers, which previously changed inventory as few as four times a year. Zara can take a new item from conception to store in two weeks. H&M also puts all of its inventory on the floor, no matter how overwhelming it might be for the customer. (Call it the anti-2 girls, 2 shirts.) At fast fashion stores, what you see -- an overflowing floor of merchandize -- is what you get.

This way, shoppers see something new with each visit, and they're incentivized to come often because once something sells out, it's gone. Further, there's less risk of making a big misstep -- just in case, say, leopard print dresses are not as hot as expected this year -- because the styles are ordered in small batches. The constant cycle of new inventory and low prices makes the goods almost disposable. Shoppers come back more frequently, and they shop more frequently.

There's one problem with this low-inventory, low-risk model. It's tough to do online. At many major retailers, their online store is outselling all other stores. And yet, Zara only began offering online shopping last year. Ecommerce is still not available for H&M in the US.

But Yacobovsky and Jain saw that jewelry was a perfect place to apply the fast fashion model. The website, which just passed its two-year-anniversary, sources its designs directly from designers, and does so quickly. Last year 4,678 new styles went live. That means around 100 new SKUs were pushed per week. BaubleBar promotes them with daily emails based around editorial themes.

Half of the new items are planned in advance and the other half are based on requests and listening from social media channels, the co-founders say. "We have a bunch of mathletes in house and they've figured out scrappy ways to synthetize the social data so we can react on a realtime basis instead of waiting for the sales results," Yacobovsky says. At any given time, BaubleBar has 1,000 items live on the site.

Compare that with some of the site's competitors. Traditional retailers like Anthropologie, J.Crew, and Bloomingdales use a four-times-per-year inventory cycle (Anthropologie will introduce a few intermittent updates). Subscription commerce sites like JewelMint introduce new merch every month. Jewelry startups Chloe & Isabel and Stella & Dot have found success with the direct selling model (think Avon lady for a younger crowd), but also introduce new inventory seasonally.

"Women shop our site based on how they shop Zara, says Jain. This high turnover and repeat shopping has resulted in 50 percent of BaubleBar's customers returning to make another purchase. And 28 percent of customers have purchased more than four items. They've built a loyal customer-base.

You might say that some, like the BaubleBar customer with 438 pieces of jewelry from the site, are addicted.

[Illustration by Hallie Bateman]