How do you stand out in a crowded market with a sizeable number of players competing mostly on low prices and free shipping? By differentiating yourself. Several ecommerce websites are melding social media with personalization to create a more inviting and collaborative shopping experience. Celebrity endorsers are the drivers of this effort to make shopping on the web more enticing. In this role, the celebrities are often called "curators," referring to the selecting and organizing of specific products and themes.
Appealing to Women
Celebrity curation is heavily targeted towards women. Vertical markets that employ celebrity endorsements include apparel, cooking, cosmetics, and home design. While it is possible that celebrities could curate products that appeal to men, such as consumer electronics and hardware, it appears that women are more susceptible to the imprimatur of celebrities. Women generate 58 percent of ecommerce sales and tend to use the web for social purposes much more than men, according to Internet tracking firm comScore.
How It Works
All celebrity-curated sites operate on a membership basis. BeachMint, which uses celebrities such as Jessica Simpson and the Olsen twins to market private label goods, operates three properties: StyleMint, JewelMint, and BeautyMint. Josh Berman, a co-founder of MySpace.com, and Diego Berdakin, a former executive of Slingshot Labs, launched JewelMint in October 2010. The other two sites opened in 2011. New visitors register and complete a style profile or, in the case of BeautyMint, a survey about their skin. Based on results, stylists recommend personalized items for customers each month via email.
Every product on StyleMint and JewelMint costs $29.99. The business model is similar to book, music, and wine of the month clubs. If customers want to skip a month, they must go to the website and cancel the order. The products are private label and exclusive to the BeachMint sites. They are shipped at no cost but most returns incur a restocking fee. BeachMint shares revenues with the curators.
BeachMint has secured venture capital funding. Sharon Wienbar, managing director at Scale Venture Partners, which invested in BeachMint, stated in her blog, "By manufacturing their own products, companies like BeachMint have products that are unique and not available in other retail or online outlets. This reduces price competition and introduces managed scarcity, increasing margins." Curated ecommerce "delivers the feel of high-end personal shopping service that only the wealthiest shoppers can access offline," adds Wienbar who sits on BeachMint's board of directors. "Consumers today look for edited, filtered selections. People can now get the feel and personal care of a boutique with the price and convenience of the web."
ShoeDazzle, which has Kim Kardashian as a celebrity stylist, operates on a similar membership model. Newcomers take a style quiz and receive a personalized selection of shoes, handbags, and jewelry, all priced at $39.95. Each month an item is selected for each customer, with the option of skipping a month. ShoeDazzle offers free shipping for both purchases and returns.
OpenSky was launched in mid 2010 as an ecommerce platform for influential bloggers who recommended products. OpenSky would source the goods from manufactures and share the revenue with the bloggers. That model did not attract enough visitors and was scrapped. In April 2011, the site relaunched with the curated model. OpenSky now has 700,000 members enjoying "a personalized discovery experience," says co-founder John Caplan. Twitter was the inspiration for the relaunch. Like Twitter, Caplan says OpenSky is now about "community and connections."
Both order volume and revenues are growing 50 percent month over month and reached $1 million in sales in October. Caplan attributes this to high-quality products and a simple user experience. Unlike the BeachMint model, OpenSky offers a wide selection of brands from many manufacturers and there is no monthly purchase requirement. Customers choose the celebrities they wish to follow across food, style, and home categories. Shoppers can build their own personal stores.
"The talent [curators] are experts in their field who are passionate about what they do. They share content and recommendations as to how to get the most out of the products," explains Caplan. Curators are responsible for choosing the products they merchandize and the content they attach to the products. For instance, with a food product, you may get a recipe from a top chef. OpenSky splits the gross profit from the items sold with the site's curators.
About 85 percent of OpenSky's shoppers are women, mostly in their 30s, and more than 60 percent of them make repeat purchases within eight weeks. Caplan anticipates that soon, shoppers will make purchases 14 times a year, which is more than the rate for Amazon.
OpenSky is free to join, has a 90-day money back guarantee, and boasts a low one percent return rate. It also has a toll free number if a customer wants to talk to someone. OpenSky offers weekly specials as well as a regular collection. When a weekly special ends, the product moves to the regular collection.
Like BeachMint, OpenSky has received substantial venture capital funding. In October it secured $30 million in a third round after receiving $19 million in two prior series.
Celebrity curation has enriched the ecommerce shopping experience by leveraging social media and appealing to consumers' high regard for trendsetters and well-known personalities.