Daily deal sites like Groupon and LivingSocial did more than socialize online discount shopping — they began a seachange that has taken e-commerce in a new direction.
Combine the deals concept with the selectivity sophistication of such sites as Amazon and Netflix, mix in the power of celebrity brands, and you get online "shopping clubs" — the latest craze in the evolving world of personalized shopping.
This new breed of e-commerce sites "present users with a limited selection of jewelry, shoes and accessories by coupling software algorithms that determine personal style with strategies culled from home shopping TV channels and CD-of-the-month clubs," writes Claire Cain Miller in the New York Times.
In a similar vein to the recently announced StyleMint from the fashion-forward Olsen twins, these sites bear brand names like the similarly minty JewelMint, plus Send the Trend and ShoeDazzle. They all want to be fashionistas' best friends, serving as virtual personal shoppers, "learning" what they like and offering up a tailored selection of items that fit their taste — within the limits of the site's inventory, of course.
Take JewelMint, for example, which offers personalized jewelry recommendations and designs from actress Kate Bosworth (above left) and red carpet stylist Cher Coulter (above right).
How the service works: Fill in a free "Style Profile" and you'll get recommendations for jewelry pieces that fit your style. Choose the pieces you want for a flat $29.99, which includes free shipping. The catch: You'll still pay $29.99 per month, whether you buy something that month or not. The fee can be applied to purchases over the next year, however.
All of these e-commerce brands have a similar business model: they work on the basis of profiling their customers. The questionnaires completed by customers offer the sites valuable information about individual preferences. Combined with a customer's site activity, this information guides the site in making specific recommendations (that's where the software algorithm comes in).
While systems that serve up personalized recommendations have been around for awhile, the shopping clubs have added a new twist with the monthly subscription. As a result customers are purchasing on a regular basis, which helps the sites to better manage inventory and cash flow. It also helps the websites learn the items shoppers like so they can predict future purchases. Selling direct helps to keep prices reasonable, since the website companies can create their own designs, source out the manufacturing, and ship directly to the consumer.
The shopping club-style websites tend to rely on celebrities and designers to legitimize the merchandise and compete with traditional retailers, who increasingly have cut deals with celebrities and designers themselves. Cue the celebs/designining Olsen sisters and StyleMint, novice jewelry designer Bosworth and pro designer Coulter for JewelMint, Kim Kardashian for ShoeDazzle, and Send the Trend's resident designer, Project Runway winner Christian Siriano.
Divya Gugnani, co-founder of Send the Trend, tells the New York Times, "People look at certain celebrities as style icons and they trust their ability to say this is hot, this is cool, this is fun."