Finding the right game plan to capitalize on today's Facebook, YouTube and iPhone-driven market has been a struggle for many apparel retailers.
But fashion- and technology-forward junior clothing retailer The Wet Seal Inc., has been "all over it" - as its trendy teen customers might say - since 2007. That's when the Foothill Ranch, CA-based company began building its online Fashion Community, a social media platform developed by Fry Inc. that allows users to build, tag, share, rate and purchase outfits through a personalized virtual boutique. Since launching that application in May 2008, Wet Seal has been on a tear, cranking out a slew of social media and mobile commerce tools.
The company's strategy is simple - but effective.
"The intersection of cross-channel, user-generated content, and mobility makes our approach very compelling," explains Jon Kubo, Wet Seal's CIO, who also heads up e-commerce and direct marketing efforts for the company, which includes contemporary women's fashion chain Arden B. "As a fast-fashion, merchandise-driven company, our strategies are always going to be about how to differentiate ourselves and make our merchandise stand out." Creating a community of brand advocates that churn out user-generated content and can access online, in-store and mobile shopping channels has done just that for Wet Seal.
In the two years since Fashion Community launched, users have combed through Wet Seal's hip merchandise, creating and posting nearly 400,000 outfits on its web site at an average now of roughly 20,000 new outfits each month. Wet Seal places this user-generated content directly into the online and mobile purchasing processes. Search for a pair of skinny jeans, for example, and the top-ranked user-generated outfits containing those jeans pop up. One skinny-jean-and-cowl-neck-tunic combo posted in February was viewed 665 times with 62 positive rankings.
This social media merchandising approach is creating buzz, but it needs to do more than that to satisfy CEO Ed Thomas. "The true measure of these tools' usefulness is whether sales increase. And they have," says Thomas. "Our conversion rates [from browsing to buying] are over 40 percent higher for customers who have viewed a user-generated outfit, and the average dollar sale is over 20 percent higher."
A web 2.0 evolution
Once it was clear that the Fashion Community idea was viable, Kubo and his team decided to expand upon it, developing applications to give the concept cross-channel utility. In December 2008, Wet Seal launched in-store kiosks, which allow shoppers to scan an item's price tag and then view the full range of item-specific outfits created online. Shoppers can not only see the various ways to wear the clothes, but can also find all the coordinating pieces immediately in the store. (The company's back-end systems interface to make sure the outfit suggestions are synchronized with in-store inventory so shoppers are directed to clothes that will be available in each store.) The approach is particularly strong for the 422-store chain because of its core audience of 13-19-year-olds who are largely cash shoppers and can't always make online or mobile purchases.
The ROI from the kiosks has been huge, says Kubo. "I was in a store just last week and a woman was buying a top for $20. I brought her over to the kiosk, we scanned the price ticket and brought up five outfits that contained that top. She went from a $20 purchase to a $105 purchase in just a few minutes," he says.
Though the kiosks help Wet Seal maximize the cross-channel appeal of its online social media, the company deployed them on a limited basis because its upcoming mobile commerce applications had the potential to quickly make the kiosks a "dinosaur," Kubo notes. Wet Seal's iRunway application, which launched in September 2009, mimics the functionality of the kiosks. From any Wet Seal store, shoppers can type a style number from an item's price tag into their iPhones and view thousands of outfit choices, as well as rankings and comments from the online community. Tens of thousands of users have downloaded iRunway since its launch, and the company has not yet done much to market the app.
Though only 25 percent of Wet Seal's demographic can currently afford a high-bandwidth phone such as the iPhone, the company sees a strong future in mobile commerce. Its mobile shopping site, which was developed by Austin, TX-based company Digby, was launched in October 2009. The site caters to the growing number of customers surfing the web from their mobile devices, offering a streamlined interface that makes it easy to search and shop. Mobile shoppers also have access to real-time inventory updates and location-based store look-ups.
"Mobile is the next step in the e-commerce process and it offers us a very powerful platform to communicate with our customer regardless of which channel she is using to shop," says Thomas.
Facing up to Facebook
The other half of Wet Seal's Web 2.0 approach has been to embrace social networking as a tool for marketing, brand building and delivering upstream traffic. Though Facebook is clearly not a commerce site, Wet Seal has approached it as a distant cousin of sorts. "I look at Facebook as a way to build brand awareness and hopefully drive incremental sales. Also, in our fast-fashion market, trends change all the time and Facebook is a way for us to make customers aware of those changes and trends immediately," explains Thomas. It is also a way for the company to gain web traffic - Kubo estimates that Facebook will surpass Google as the top source for upstream traffic to WetSeal.com before this summer.
Wet Seal began seriously focusing on Facebook in the summer of 2009. Today, it counts more than 180,000 Facebook fans, a number that is growing by 4,000 to 5,000 fans per day. Through its Facebook page, Wet Seal fans can receive updates about new and on-sale merchandise; access Facebook-only coupons; post comments and interact with other Wet Seal fans; and view behind-the-scenes photos and videos. The Facebook site also includes the Virtual Runway application, launched in December 2009, which showcases some of the most popular user-generated outfits from Wet Seal's web site.
"There is definitely a social component associated with apparel brands now," says Kubo of the need to have a Facebook presence. "We use the same content and philosophies on Facebook as on the web site, but it is about socializing versus buying something."
Capitalizing on the growing fuzziness between socializing and buying is the idea behind another new Wet Seal tool called Shop With Me, which Kubo describes as "WebEx on steroids." The application, created by San Diego-based startup Sesh, allows customers to shop with other individuals in real time, and interfaces with social media platforms including Facebook, ICQ, Bebo and AIM. What differentiates Shop With Me from other similar applications is that it offers full chat, browsing and marking capabilities.
"Shoppers can see our entire web site during the chat, whereas other solutions allow users only to trade single items with each other. It also offers great interaction capabilities -users can circle merchandise, make notes and suggestions - just like in a real shopping experience," says Kubo. During a Shop With Me session, a customer can, for instance, click on a green dress to show a friend, circle it, and add a note such as, "Do you like this color?" If not, the friend can browse through all of Wet Seal's merchandise to suggest an alternative. Wet Seal also plans to use the tool as a customer service and personal shopping application; instead of chatting with a friend, a user can initiate a Shop With Me session with a customer service rep or personal shopper to receive help.
Increasing data - and dollars
The customer appeal of Wet Seal's social and mobile applications is obvious, and the benefits for the company are enormous, starting with data collection. Recording all user sessions from the Shop With Me tool helps the company garner a trove of information including what products users circled, what pages they linked to, whether they made a purchase, and whatever product feedback they shared with friends during the chat session.
The user-generated outfits themselves are a great source of insight, adds Thomas. "I can't think of a better tool to get immediate feedback from a customer on how she is dressing," he explains. "Before, we had to wait to see what customers purchased to know what was going to sell well. Now we know instantly. It is a great tool for us to develop our own business internally."
By analyzing the online outfits and ranking data, the company can also discern trends -which can impact its merchandise and assortment planning. For example, Kubo sensed that customers were not dressing up as much to go out because they were all creating outfits using skinny jeans and fashion tops. "We can see consumer sentiment about our products much earlier than we've ever been able to do, and it translates very well into what we do on the business end," he explains.
These tools have also translated very well into the bottom line, boosting e-commerce sales by some 20 percent, according to Kubo, who says that Wet Seal has long since recouped the money it spent to develop its various mobile and social media applications.
The company does not plan to rest on its laurels, however. Fast-fashion is a fast business, after all. "We know we're ahead of the game now, but our competitors will catch up to us at some point. Hopefully we'll be on to the next thing by then," says Thomas.
Amy Roach Partridge is a New York-based free-lance writer specializing in business and technology.
In December 2008, Wet Seal launched in-store kiosks, which allow shoppers to scan an item's price tag and then view the full range of item-specific outfits created online. Shoppers can not only see the various ways to wear the clothes, but can also find all the coordinating pieces immediately in the store - the approach is particularly strong for the 422-store chain because of its core audience of 13- to 19-year-olds who are largely cash shoppers and can't always make online or mobile purchases.
e-commerce systems at a glance
* Email: Edialog (subsidiary of GSI Commerce Inc.)
* In-store kiosks: proprietary
* iRunway app: proprietary
* Mobile shopping site: Digby
* Shop with Me: Sesh
* Web Analytics: FireClick, Digital River Inc.
* Web Site Platform: Open Commerce Platform, Fry Inc. (subsidiary of Micros Systems Inc.)
* Financials: Oracle E-Business Suite
* Markdown optimization: Oracle
* Merchandising: RMS, Oracle
* Planning: Epicor
* POS: ORPOR, Oracle
* Size optimization: SAS