Although direct marketing has come a long way from the days of the Mary Kay catalog and neon-green Tupperware, Jessica Herrin, CEO of jewelry and accessories retailer Stella & Dot, has breathed new life into the business model.
Herrin created the company for fashionable women who want higher-quality bangles, earrings, and rings than what's found at bargain boutiques—but something more approachable than the gems locked in glass cases at traditional jewelers. "My favorite [this season] is the Phoenix Pendant. It's versatile and reminds you of art deco," she says. "It's very Gatsbyesque."
The company now counts 30,000 sellers, or "stylists," among its ranks and has paid out more than $100 million in commissions. Its retail sales have grown from $33 million in 2009 to $200 million in 2012. And each piece of Stella & Dot jewelry is created by an in-house design team, in a loft above Barney's in New York's SoHo neighborhood.
Herrin, who prefers to spend her time out of the office and with her stylists, says many of the women—there are some men, too—who sell Stella & Dot use it as seasonal work. It's been especially popular among teachers and nurses. During any given month at least half of the company's stylists actively sell Stella & Dot's products by hosting in-home trunk shows. "I think the exciting thing about our company is that despite our rapid growth, at any given trunk show, at least eight out of the 10 people there are shopping with us for the first time," she says.
It's not the 40-year-old Stanford graduate's first company, or even her first successful one. In 1996, Herrin dropped out of business school to start Della & James, a bridal registry website. It evolved into WeddingChannel.com, an all-encompassing online destination for brides. At that point she felt like it was beginning to take over her life and get in the way of starting a family. She left and later became a manager in the e-commerce department at Dell computers. Herrin launched her jewelry company in 2004, then relaunched as Stella & Dot in 2007.
She approached the direct marketing realm with some trepidation, believing that, too often, the products sold by armies of independent salespeople—for companies like Mary Kay, Avon, or Tupperware—were outdated and missing their mark with consumers. Herrin also looked at fashion brands being sold with traditional retail models that didn't have the personal, energetic sales touch that is often the key to success.
"I thought there were a lot of great brands for retail that didn't offer great service in the stores," she says. "And then at trunk shows, I would love interacting with people, but they weren't selling the products I wanted. I thought technology was missing from the equation."
So she did her research. As Herrin puts it, she walked a million miles in some very stylish shoes to learn by immersion at trunk shows. She even held some of her own to learn what it would take to make the model successful.
Next year, Herrin wants to see her San Francisco-based company take command of its supply chain and infrastructure. With those goals in mind, she brought on a former vice president of operations at Amazon and a former head of inventory planning at Old Navy. "Saying Amazon is in the book business is like saying Stella & Dot is in the jewelry business," she says. "We want to expand to include other product categories, but not in other forms of retail. We're going to stick with this social selling model that's been so successful for us.
"We've made a tremendous splash, but we're so relatively small compared to what we will be," she continues. It's just breakfast time at Stella & Dot." And there's no Tupperware at this breakfast table.
[Image: Flickr user Ellen Munro]