Lyst: A whole new way to buy fashion
Chris Morton is co-founder of Lyst, an online fashion store that provides a personalised shopping experience to the user. Launched in 2011, Lyst has partnered with over 11,000 designers, attracted shoppers from 154 countries and reached 25M users in the last year. They have recently appointed Christian Woolfenden (formerly of Paddy Power) as CMO and launched their first data inspired ad campaign. We visited the Lyst office in August to find out how they are creating a whole new way to shop.
How did you spot the opportunity?
At the time I was investing in Internet start-ups with a venture capital firm and there were certain trends appearing that we were coming across. There were businesses, Spotify was one of them that were trying to build a better way to navigate around music and they built first of all an inventory of millions of songs and then a product that helped people discover songs using playlists and using search.
That was definitely an inspiration for us, thinking how can we apply some of the rules here to this world of fashion, which is a growing industry. And at the same time, I was living in a house full of friends from University and three of the girls were obsessed with online fashion, and I’d watch them from across the room and they’d have multiple tabs open and looking for certain things in different stores, going to the same pages over and over again to see if the thing they wanted had come back in stock. It seemed like a very laborious process and so really it was a combination of those two ideas.
One of the questions you must ask yourself if you’re starting a business in commerce, in e-commerce specifically, is why is Amazon not going to eat your lunch? The view that we took is that what Amazon does exceptionally well is commodity commerce, where as our brand is designed for luxury stores and consumers with high disposable income.
What is Lyst challenging within the fashion industry?
In terms of a product for the customer we’re giving them a whole new way to buy fashion; a way that does not exist today and has never existed for them before. In terms of the brand, it was important to identify which parts we wanted to challenge because there are a lot of rules and homogeneity around how fashion brands communicate with customers and I think there was an opportunity for us to step outside of that.
If the perception of the industry is to be rather cool and exclusive, we’re trying to be more approachable, a bit friendlier and a bit more helpful to deliver the next stage in customer service. But at the same we want to adhere to parts because ultimately we work with these brands and stores and we’re all part of the same world.
How do you keep customers engaged with Lyst?
We try to go to the extra step to be very nice to customers, surprising them with certain things that aren’t expected. For example, every Monday we will go and buy a customer something from their list and say, here’s something for you, thank you for using the product, and it hopefully makes their Monday.
Like many tech start-ups you opted to pivot early on. Can you tell us a bit about that?
The initial belief we had was that the best way to discover and buy fashion online was going to be using social commerce or social curation. This idea that you’d come on and you’d follow friends and those friends would be surfacing interesting items and that was going to drive this new discovery process. We learnt pretty early on that this was not working well at all.
When we started testing and seeing the results, we saw that people did not want to follow their friends to get recommendations. Fashion is a much more of an individual thing because everyone has a different style. Secondly our friendship groups are faceted by interest. Some of my friends will give me great recommendations on retailers, some of them on restaurants etc. whereas something as unique and individual as fashion was harder. At the same time, when we allowed our customers to follow brands, magazines or influences in a space, we saw a much higher conversion rate to purchase. That really helped guide us into this direction, saying when you sign up, tell us a bit about the brands that you love and have these emotive connections with, and then we’ll curate some of the shopping experience to you.
How far into your journey where you at that point?
We realised it was not working after around six months, and then we tried various tweaks with a screwdriver to see whether it was an execution of this concept that was leading to it not working. We probably did a bit more tweaking for about six months and then at that point we took a sledgehammer to the idea, and said this concept is flawed. We went back to the drawing board and those other ideas were more successful.
Given the constraints a new challenger faces what sacrifices have you had to make?
One tough choice we had to make early on was to focus on product over brand, and the view was that if we have a strong product and a terrible brand, we will get somewhere along the journey. If we have a very poor product and a great brand, we will not get anywhere along our journey.
Obviously the desirable thing is to have both but it became a sequential thing for us, and because we were building something that hadn’t been built before and we were unsure about what that final product would look like. We couldn’t spend any time on the brand until the product was a bit more mature.
How do you ensure you keep innovating in this space?
The culture of innovation is very important to us, in a world that’s rapidly changing, there will be opportunities to build a better business and kill our business and we want to be the ones that kill our business. How do we not be so precious about that if we see around the corner that something has fundamentally changed that will allow somebody to build a better experience to the customer and there are examples of businesses, which have done this very effectively.
Conversely, there are businesses which have not adapted to the changing rules and they’re not with us today, so I think there is enough precedent to serve as a warning sign but this needs to be baked into our culture from today, when we’re the challenger, so that if we ever stop being the challenger, we are protecting ourselves from new challengers.