TechStyle: Where Creative Disruption is Always in Fashion
Staff
TechStyle Office | Credit: techstyle.com
Technology, fashion and ecommerce are exploding. In 2016, retail ecommerce revenues totaled $72 billion, and they are projected to increase to $116 billion by 2021. Legacy and startup fashion brands have tried multiple ways to capture today’s digital-savvy consumers, from adopting advanced CRM technology to learning to market via social media. One model that has been widely tried is membership programs, which have met with varying degrees of success. There is one company, a pioneer of subscription programs, that has been stunningly successful, and it has emerged as a juggernaut in online retail sales. Yet few people have heard about it, and almost no one is aware of its role as a marketing and technology trailblazer. The company is TechStyle Fashion Group, led by co-CEOs Adam Goldenberg and Don Ressler.
From Starting a Trend to Bucking the System
In 2010, JustFab launched the retail industry’s first fashion membership program for footwear. Subscribers to its VIP monthly subscription received more than 30 percent off retail pricing, along with exclusive access to promotions and special products, loyalty rewards points and free shipping. The model worked: In just two years, the site attracted six million members. In the first quarter of 2012, JustFab sold more than 2.5 million pairs of shoes.
During the next four years, JustFab acquired FabKids and ShoeDazzle, successfully expanded into the U.K., Germany,and six other countries, and launched Fabletics with celebrity Kate Hudson. In 2016, the company rebranded itself as TechStyle, a better reflection of the company’s position as a platform that is reimagining fashion retail and marketing by integrating them with data science, personalization, and membership commerce.
Kate Hudson, co-founder of Fabletics | Credit: techstyle.com
From Data into Designer Destinations
Credit: Adam Goldenberg LinkedIn
TechStyle’s co-founder and co-CEO is Adam Goldenberg, whose 20-year career in startups began at the age of 13, when he started an online bulletin board that morphed into the gaming website Gamer’s Alliance. At 17, Goldenberg sold Gamer’s Alliance to Intermix, the parent company of the early social media site MySpace. Intermix offered the 19-year-old Goldenberg a position as chief operating officer, making him the youngest public company COO in history. After Goldenberg left Intermix, he founded the early ecommerce site Intelligent Beauty, which spawned several additional companies, among them DermStore and JustFab.
Goldenberg had grown up using technology, and he was determined to use it aggressively for the benefit of his ecommerce efforts. TechStyle’s chief technology officer, Tim Collins, had worked with the company’s co-founders, Adam Goldenberg and Don Ressler, in a previous job. “I was familiar with their talents in building digitally native brands,” he told NewsCenter.io in an exclusive interview. “I was struck by how they were focused on building a culture of testing and optimization in the fashion business…. Everything we are developing is about elevating customer satisfaction in making the products and the user experience more efficient and relevant. If we can do this, the cost of customer acquisition goes down and the lifetime value increases.”
The company was a technology innovator from the beginning. TechStyle launched a series of proprietary ecommerce technology products, including its FashionOS unified technology platform, which the company built from the ground up at a cost of about $70 million. TechStyle Chief Marketing Officer Shawn Gold explains, “There are six main FashionOS bespoke components: our CRM membership system, the ecommerce system, an omni-channel retail system, a personal styling system, the supply chain and fulfillment system, and the enterprise data management system.”
In addition to investing heavily in technology, TechStyle innovated in marketing and product selection. In 2015, the company launched an enterprise personal styling system that pairs sophisticated algorithms with personal stylists, aiming to offer a better, smarter shopping experience. According to senior analysts at Kantar Retail, TechStyle’s yogawear brand, Fabletics, is a leader in predictive analytics, one of five key AI trends affecting fashion. “Our big technology investments moving forward will be in machine learning and personalization,” added CTO Collins.
Dominating the Digital Catwalk
TechStyle’s edgy 120,000-square-foot El Segundo corporate headquarters has the energy you would expect of a thriving startup. According to CMO Gold, the company holds Tuesday team meetings that are open to all employees, where key performance metrics are shared and anyone can ask questions. “One of the biggest differences [between tech and fashion] is that higher purpose,” explains Gold, who previously worked as chief marketing officer of MySpace. “Every tech company has that higher purpose of how they’re looking to disrupt an industry or have game-changing technology or experience.”
TechStyle Team | Credit: TechStyle
TechStyle is on track to earn $700 million in revenue this year; the company has 2,000 employees and 4.5 million members. An additional product line will launch in mid-2018. “The company’s last major [VC] raise was in 2014, which put the total [funds raised] at $295 million and a valuation of over one billion dollars,” Gold said. “Since then, sales have more than doubled.”
Conversations about a potential IPO have been bubbling around for the last two years, but Gold isn’t giving anything away. “It’s very uncouth to talk about an IPO,” he told NewsCenter. “That’s an option, but anything can happen. The fact is, we are a venture-backed technology and fashion startup with double-digit annual growth over seven years. At some point, investors will want to celebrate in a very significant way.”
