Like Google’s Boutiques.com, StyleOwner gives bloggers, fashionistas and Rachel Zoe-wannabes the ability to create their own virtual storefront (for free) and stock it with items from over 2,000 brands carried by retail partners such as Nordstrom and Saks Fifth Avenue. As incentive to the seller to leverage their social network, anything purchased in their virtual marketplace earns them a 10 percent commission.
Only 10 percent of the $275 billion of apparel and accessories sold in 2010 were purchased online, according to Sucharita Mulpuru at Forrester Research. However, StyleOwner’s founder and CEO Joel Weingarten tells Fast Company that e-commerce is growing by about 20+ percent annually. “We are helping accelerate that growth,” says Weingarten, by creating a personalized, social and collaborative shopping experience.
Personal curation may just be one of the most over-used term in fashion industry parlance, but one of StyleOwner’s investors, Kirsten Green of Forerunner Ventures, still sees it as a huge selling point in the evolution of retail. Specifically, Green says, “StyleOwner leverages this trend by empowering a whole new constituency to act as a sales force for both retailers and brands. A salesperson’s effectiveness is vastly enhanced as credibility is established and access to consumers is increased, these two powerful components are at the heart of peer-to-peer selling and the crux of the StyleOwner model.”
To establish its fashion cred right from the start, StyleOwner has partnered with such fashion heavyweights as Style.com and more than 30 well-known fashion bloggers including Leandra Medine of Man Repeller, Karen Blanchard of Where Did U Get That, and Keiko Groves who blogs at Keiko Lynn. Weingarten says these early storefronts will draw on the bloggers’ legions of loyal fans who already click to buy the bloggers’ featured looks via affiliate programs.
This is where StyleOwner’s secret sauce, ie: its backend architecture comes in. Weingarten maintains that affiliate programs always take the customer away from the site. “Affiliate programs are cumbersome and unrealistic, [they are] an anathema for a media platform,” that strives to keep the user on its site he says. At StyleOwner, the customer stays within the same shop and checks out once, even if they are buying multiple brands from a variety of retailers.
But Weingarten emphasizes that StyleOwner isn’t just relying on established tastemakers to sell apparel and accessories. By letting average fashionistas become advocates, “They can live their dream of fashion and become full-fledged entrepreneurs,” he says.
Weingarten says that in addition to creating a built-in revenue model for StyleOwner (unlike some other startup social networks), it creates a way for users to “monetize their sphere of influence.”
Andy Dunn, CEO and founder of Bonobos, an e-commerce retailer of men’s apparel (and original menswear brand) says that’s why he invested in StyleOwner. “It puts power in the hands of tastemakers and individuals and gives brands an authentic audience in the process. Bloggers and individuals add a lot to brands already but rarely get compensated for it in transparent and authentic ways.”
Jed Wexler, managing director of Eight-Eighteen Strategies agency and founder of the Fashion Marketing Group, notes that fashion platforms such as Polyvore and Fashism put revenue second, after fun, games and inspiration. “Social commerce or anything successfully social is supposed to revolve around authentic sharing and engagement –things we truly like and want to share with our social graph. If we know our friends are getting paid for their recommendations, our trust may go way down over time.”
Weingarten is quick to point out that StyleOwner isn’t overstepping any FTC boundaries by paying its users a commission. Store owners use the company’s software “just like eBay or PayPal” and “We did our research on the Child Online Protection Act,” he adds.
Furthermore, Weingarten hired a team of fashion insiders including the former president of J. Crew, the former publisher of Lucky Magazine and others to help stylepreneurs keep their marketing efforts in line. The company is offering Meetups, webinars, and forums because, he says, “We feel it’s our responsibility to educate store owners to keep authenticity and make recommendations that their customers will believe.”
Wexler observes, “This does look like social commerce on steroids with some really nice, frictionless e-commerce tech.” He believes, if it avoids turning into “another digital version of the same old multi-level marketing a lot of us have grown to dislike,” StyleOwner could end up ushering in a new era of social commerce.
Weingarten asserts StyleOwner is hastening the democratization of fashion; “We are creating a new group of tastemakers, a new editorial sphere.”