DailyLook reveals its secret to customer loyalty and high conversions: Sell looks, not items

By Michael Carney , written on June 18, 2013

From The News Desk

If a business model can be applied to women’s fast fashion ecommerce, chances are it has been. Flash sales, subscriptions, mystery boxes, and others have all been in vogue at one point or another over the last several years. But, in the end, none of these models really deliver a great shopping experience.

For the self-confident and experimental fashionistas, mixing and matching items from across the Web is likely a non-issue. But many consumers appreciate guidance and inspiration on how to style themselves. This is counter to the way most ecommerce sites operate, offering photos of a model wearing three to five items, including a top, bottoms, footwear, and accessories, but making only one of them available for purchase. Also, with the desire to create a false sense of urgency and scarcity, most etailers offer a product one day, but not the next, regularly leaving consumers frustrated and out of luck.

Los Angeles-based DailyLook has developed a complete look-based model that is a welcome reprieve for many women, thus creating growing a community that strengthens its lock in. The two-year-old company has grown rapidly since abandoning the flash sales model last Spring, focusing instead on solving what co-founder and CEO Brian Ree calls core problems with ecommerce. The company continues to sell complete “looks,” with four new ones introduced daily, but it has also made its archived product and image catalog shoppable and emphasized shopping according to style. The model is rare in the apparel sector, but is similar to the stylist curation offered by ShoeDazzle, JustFab, and others in the footwear category.

“Women have an emotional need to look stylish, but many just don’t know how,” says Ree, relaying feedback from DailyLook’s early customers. “We’re solving a problem that exists both online and offline. Where can you go to get ‘styled’ at a reasonable cost? Not Forever 21. Not H&M. And nowhere else, to my knowledge, online.”

Today, the company has a catalog of 2,700 items in stock and aims to reach 5,000 by year’s end. But these items are mixed and matched into thousands of complete looks, searchable by genre, brand, and category. Items can be purchased individually or as complete looks. There are risks associated with shopping according to looks, including looking like a walking mannequin or committing the fashion faux pas of wearing a single brand from head to toe. But Ree believes the look and style-based search experience is the best way to offer a massive product catalog without being overwhelming and inefficient. The data seems to back up his claims.

DailyLook has 400,000 loyal email subscribers, 12 percent of which visit the company’s site more than 100 times per month, according to its CEO – it’s hard to imagine that many H&M stores see their best shoppers even 100 times per year. Another by-product of the look-based model is increased conversions, according to Ree, who says that the average purchase consists of 2.2 items, well above industry average. Finally, according to sources close to the company, DailyLook generates more than $1 million in revenue each month and has what were described as “very healthy gross margins.” This is rather impressive for a two-year-old company that was bootstrapped for most of its early life and just recently raised significant funding via a $2.5 million Series A round in April of this year from GRP Partners, Rachel Zoe, and others.

Now, the company is less than a week away from launching internationally. DailyLook’s market expansion could come any day now, as it’s running a promotion tying the launch to milestone of signing up its 50,000th international member. The company currently has 41,983, according to a counter on its website, with four days and change until its June 23 deadline.

The majority of DailyLook’s traffic is direct, according to Ree, meaning people typing in its Web address into their browser, followed by its daily email newsletter. But once consumers are on the site, there’s a community element that keeps them highly engaged. One big driver of engagement is pulling hashtagged content from Instagram including photos of customers unboxing and wearing the company’s looks and then displays these images alongside the respective items within its product catalog. Along the same lines, the company has plans to launch a “Be the Stylist” program in the near future which Ree expects to drive rabid engagement.

There’s no one model that is right for every consumer, but DailyLook seems to have settled on one that could appeal to the masses. Ree is a highly capable entrepreneur who many VCs I’ve spoken to believe understands the ecommerce business and his customers’ psychology better than many industry veterans. His next challenge is porting this success to other markets, which due to the number of variables involved, is no sure thing.

[Illustration by Hallie Bateman]