WWD MAGIC: Shopping 3.0- The Evolution of Ecommerce

One of the seminars that I was most excited to attend at Magic  was Shopping 3.0, The Evolution of Ecommerce, by Ben Fischman the CEO of Ruelala.com.  Much like my experience in February when I was able to sit in on the keynote by Kevin Ryan of Gilt Groupe, I expected this to be a really informative talk.  It did not disappoint.


Fischman’s started off talking about Rue lala’s desire to put the sexy back in shopping- the fun, the passion, the excitement.  He talked about the fact that shopping is still all about the product.  Have a great product but your marketing is mediocre, you can succeed.  But if you have a not-so-great product and fantastic makerting, you’ll never survive.

The discussion soon turned to answering the question How do we interact with products that we need, want, and buy? There are four themes driving e-commerce today: Speed, Engagement, Virality, and Access. The speed of change is mind boggling and the importance of building an infrastructure for exploration is paramount. Private Sales is an excellent example of these key themes coming together. It’s an aggressive approach and requires companies to quickly push, evolve, and become better. A great private sales platform embraces entertainment as much as it does convenience because entertainment means engagement.

The Evolution:

Shopping 1.0

  • All about utility
  • Functional, not fun
  • Rarely, if ever, exciting

Shopping 2.0

  • Beginning of something interesting
  • Virtual Catalog
  • Consumer adoption
  • Dollars move online
  • advertising online
  • But Still NOT engaging

Shopping 3.0- Where we are now

  • Virality and word of mouth are the most effective acquisition tools
  • Emotional, exciting, and social shopping
  • Entertainment meets engagement
  • Shopping meets brand building
  • Shopping is becoming like dining out- friend’s recommendations strike an emotional cord
  • The trick- Brands need to make it easy to communicate to their friends.  They need to know the sound bite.
  • CANNOT be built on banner ads and google search
  • Entertainment builds addiction: email, tweeting, stock quotes…

With Shopping 3.0, it’s imperative to create a platform that becomes habitual. They only way to do this is to launch constantly changes initiatives.

How to create demand:

  • Tell stories
  • Engage highly relevant consumers
  • Awareness, Consideration, Trial
  • There HAS to be newness; every single day!
  • A notion of service
  • Need to exceed consumers expectations
  • Have conversation.  Don’t screw up a second time, what can you do to make it better: “make-up sex

Example: Rue lala’ s best customers are those that were wronged once, but thanks to Rue’s immediate attention, resolution, and “I’m sorry perks”, they have become loyal brand followers. Reward great loyalty.

How does Rue lala reward great loyalty?  One example is Rue 30, the best customers pay $9.99 for the first shipment and get all remaining shipments for the next 30 days for free.  After 30 days, it starts over- pay for your first, next ones are free. Brilliant.
According to Fischman, there are too kinds of loyalty they show their customers; Implicit and Explicit.
Implicit Loyalty is what you do for your customers without even telling them; like buy something retail becuase you messed up and need  to get them a certain product. Explicit Loyalty is special services and perks that you make sure they know about; like a special VIP customer services phone #.

Preparing for Shopping 4.0 
Be where the people are:

  • Mobile sales for Rue jump up 25% on the weekends and increased 600% year-over-year.  50% of Rue mobile sales are down via iPad.
  • Facebook- the sales and business transactions that happen within this coming year will be astonishing, Fischman predicts.  the power of Facebook is the complete transparency of a friend’s referral.
  • Speed- get where you need to be quickly.  You need to have people in your organization who’s only focus is what is happening next.  This is key.

“Must See” Innovation:

Ask yourself “What can we let our members do rather than us doing?”
Have a Flagship Store that lives online:

  • Launch new products
  • Have a hero destination
  • Create a marketing vehicle for your brand partners

Organization is key:

  • Online and offline should mirror one anohter: high energy and engaging. Can anyone say Apple Store?

Create community:

  • Let your buyers do the driving
  • Adopt Evangelists!
  • Create a member council

Overall, this was a very informative keynote with a lot of useful information.  And considering the Rue lala has spent less than 3 million on marketing to date, it’s worth taking into account what Fischman has to say.

Nicole Giordano
Nicole Giordano

Nicole is the founder of StartUp FASHION, an online resource and community supporting for independent designers around the world with building their businesses. A deep love for the craft of fashion paired with an adamant belief that success is defined by the individual, led her to found StartUp FASHION, where she helps independent designers and makers screw the traditional fashion business rules, create their own paths, and build businesses they truly love. More than anything else, she’s in the business of encouragement and works every day to remind makers and designers that they have something special to offer the world and that they can, in fact, do this thing!

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