JustFab's Got a Personalization Business Model Built on Customer Data

JustFab has grown from its beginnings as an ecommerce-only shoe store to a globally recognized fashion brand in just the seven short years of its existence. Launched in March 2010, JustFab earned its $1 billion Unicorn status in 2014, and pulled in $650 million in revenue last year alone. Customers, indeed, clearly love this retailer. The question is: Why?

Why JustFab, and what does the company do so well to keep its customers shopping for more and more?

Answer: Supreme Personalization

Personalization is not simply a strategy at JustFab, but a business model. And this is evident from the moment a visitor first arrives on the JustFab website. Prompted to “Get Started”, first-time users are taken through a short Q&A session, strategically designed to get a sense of the user’s personal style preferences.

What’s immediately striking about this quiz is the simplicity of it – from a user’s perspective, that is. Just 8, multi-choice questions are asked: Which shoe style is most “You”? Which celebrity’s style inspires your own? It’s girls’ night out! Which will you wear?

It’s fun. It’s engaging. It’s warm and welcoming. And there’s a real sense that JustFab is trying to “get to know” the customer first and foremost, rather than simply trying to flog as much as it can as quickly as it can – a remarkable feat for an ecommerce store completely absent of human sales assistants.

The Sailthru Secret

It’s certainly a magical welcome from the shopper’s viewpoint – but the real magic happens on the backend of the JustFab website, and relies on a strategic partnership with personalization technology firm Sailthru. The information gathered from initial quiz is used to curate a selection of accessories and clothing which is then placed in the customer’s personal online boutique. As shoppers then browse, buy and reject these items, the Sailthru personalization and recommendation engines further refine the selections presented to each unique shopper in accordance with their individual tastes.

The result is supreme personalization for every customer, which helps JustFab achieve its ultimate goal – greater customer retention. Indeed, Monica Deretich, VP of Marketing and CRM at JustFab, believes personalization and retention goals go hand-in-hand. As she explains in the short video below, it’s much more cost-effective to retain a customer than it is to acquire a new one, and so keeping the 4 million JustFab members happy is the number one mission for the retailer – and supreme personalization is the key.

103% Revenue Lift with Email Personalization

Personalization can of course be delivered via any number of channels – but the one that has proven most effective (and indeed most lucrative) for JusFab is email. Customer segmentation is the tactic the retailer has found to be most successful in this regard, and, once again, is achieved through a process of data gathering.

Browsing and purchasing behavior is carefully collected and analyzed at a molecular level, enabling JustFab to create multiple, highly-targeted customer segments – VIP customers, lapsed shoppers, plus-size customers, merchandise categories, individualized shopping patterns, price sensitivity, and many more besides. For each of these segments, JustFab crafts emails that are personalized in every detail – from messages, content and product offers, to hailing changes in shopping cycles, and personalizing the best wishes sent out on birthdays and anniversaries.

Testing plays a key role in refining JustFab’s email strategy, as CMO Tracy Inglis notes in a recent interview with Venture Beat. JustFab created a message test across a group of shoppers during their birthday month. The group was split into three – the first group got no birthday message at all, the second received a simple happy birthday wish, and the third a birthday wish plus a $10 promotion.

“Obviously we saw a nice lift,” Inglis says. “It was a 70% lift over the control for saying happy birthday with a ten-dollar promo. But what really surprised me was simply by saying ‘happy birthday’ we had a 34% lift over the control in revenue. Simply by saying happy birthday! No promotion – just having that relevant message to a customer.”

A similar test was subsequently carried out, this time on a segment which contained VIP customers who had recently lapsed in buying. Again, the group was split into three, all were sent a promo, but with a slightly different personalized message in each, as Inglis explains:

“We saw a 71% lift just by saying, ‘Because you’re a best customer’. And we saw a 103% lift by saying ‘Because we miss you.’ It’s crazy. Exact same promo, just different messaging, and we have a 103% lift in revenue.”

The Technology Requirement

Supreme personalization is the winning strategy for JustFab – a practice in retention marketing that earns supreme loyalty from a customer base 4 million strong. But, this incredibly effective strategy requires an incredibly powerful technology platform on which to build these successes. As Inglis warns:

“You really just can’t do personalization at this scale without having the technology to support it. When you’re looking at one marketer and four million customers, I can’t know all of that about my customers offhand. And I certainly can’t recode each email with different email creative across four million different customers, right?”

Right. And so JustFab’s investment in personalization technology has been a strategic one – and it’s paid off. From driving repeat purchases to incredible customer retention rates, focussing on technology to improve personalization skyrocketed this company from zero to Unicorn status in just four years – and so it’s no surprise that personalization will continue to form the base of JustFab’s business model going forward. The last word goes to Monica Deretich:

“We’re extremely focused on customer retention at JustFab. There’s obviously a cost associated with acquiring a customer, and it is much more cost-effective to retain a customer than it is to acquire a new one. There’s natural attrition for every retailer, but we want to make sure that we keep our members happy and that everything we put in front of them is relevant, with the goal of retaining them. We personalize with the goal of retaining our members for as long as we can, and generating and growing their customer lifetime value.”