For department stores, the strategy around subscription boxes and personal styling services goes a little something like this: If everyone else has one, we want one, too.
After Nordstrom acquired Trunk Club in 2014 for $350 million, copycat partnerships followed. (That’s despite the department store taking a $170 million loss for that purchase just two years later.)
At the end of 2017, JCPenney teamed up with Bombfell, a similar subscription menswear box, to build style boxes for customers, initially focusing on the big-and-tall menswear category. (In menswear, big-and-tall is the equivalent of women’s plus-size.) Also last year, Neiman Marcus made an early-stage deal with DappStyled, a curated box service for men, to be its exclusive merchandise partner. Launched in June, DappStyled sells stylist-curated boxes for men sourced from a mix of Neiman Marcus and Last Call inventory at three price tiers ($99, $149 and $199) based on the brands and items in each box. While there’s no subscription required to see or shop DappStyled’s boxes, inventory will be changed out every two to three weeks, with customer data collection informing new product decisions.
“With retail being as challenging as it is now, everyone wants to stay relevant,” said Max King, co-founder and director of operations at DappStyled. “For Neiman, this is a new revenue stream, a new customer line, without the added cost of a new project.”
While DappStyled has taken the subscription out of the styling box, it’s doing so in the hopes that more customers will flood in without that barrier of entry, and that more Neiman Marcus and Last Call product will be churned out. It’s still scratching the itch of what a subscription styling service offers: A differentiated revenue stream, and a compilation of customer data, two pillars of modern retail strategy. But traditional retailers are also turning into an unlikely savior for subscription and styling service models, which have proven difficult to scale on their own.
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“To scale these models on their own takes discipline and resources – something that traditional retailers have and startups can quickly run out of.” said Cheryl Chang, principle investor at BlueRun Ventures.
The exception has been Stitch Fix: The subscription-based styling service went public last year with a $1 billion IPO and has extended from women’s clothing to menswear and basics, like undergarments. Its model is built on customer data, luring brands in with the promise of full-price sell-through (no promotions) and using algorithms to design in-house clothing lines.
King said DappStyled doesn’t want to imitate Stitch Fix, the giant in the space. It’s going after a more budget-conscious customer, doesn’t ask for a subscription fee, and doesn’t sit on inventory it doesn’t sell. Instead, it sends it back to Neiman Marcus. But King isn’t counting out other partners: He said that growth for the company is reliant on expanding to other merchandisers in order to extend to other categories.
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“For companies based on customer data, you’re nothing without scale,” said King. “That’s where partnerships come in.”
#OH: What other brands are saying about the subscription and styling models
Jill Friedson, vp of marketing, Allure Beauty Box
“This endeavor, we believe firmly, is future-proofing a brand like Allure. It’s on the market, and it aligns with the editorial mission. It requires a lot of coordination. We call this the space of alternative revenue. We’re not thinking about our primary media business or advertising-driven models. We think actively about the beauty box as something that lets us reach a new consumer who may not be reading the magazine.”
Krishna Nikhil, chief merchandising officer, Ssense
“The personal styling model is the result of the organic emergence of personal shopping appointments in our retail location. Customers would call or send an email requesting styles from the website to be tried on in the store and would often look to our staff for styling advice. The majority of sales were a result of this behaviour and it became clear that this is increasingly how people want to shop. At [Ssense’s physical retail store], we’ve dedicated two entire levels and eight fitting rooms to host personal styling appointments.”
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How Stitch Fix pitches to high-end brands like Calvin Klein and DVF
Luckily for Stitch Fix, it’s reaching out to premium fashion brands at a time when they’re feeling especially vulnerable: department store foot traffic is falling, the online marketplace is sprawled and Amazon is hardly a friendly retail partner to brands.
