25k dresses: Weddington Way finds growth and profitability…
March 10, 2014 /pandodaily/ – On any given year, there are 2.5 million weddings in the United States. At an average cost of $25,200 per event, that’s $63 billion in commerce. But weddings remain one of the few multi-billion dollar industries yet to be disrupted by technology. Brides and grooms plan their weddings much like their parents did. Sure there are minor tweaks like Pinterest inspiration boards, email RSVPs, and the occasional photo sharing platform, but when it comes to money changing hands, little has changed.
It hasn’t been for lack of trying. Millions in venture capital and tens of thousands of woman- and man-hours have been poured into this problem, but with largely underwhelming results. The problem, according to Ilana Stern, a former Bloomingdales buyer and founder of bridesmaids dress marketplace Weddington Way, is that most market entrants have attempted to solve weddings as a commerce issue rather than a social problem. Sure brides and grooms need tools to discover and consume wedding-related content and merchandise, but simply offering a prettier and fancier digital mousetrap, even if it’s arguably “better,” has proven inadequate to disrupt the legacy offline industry.
Weddington Way’s secret weapon has been to incorporate social elements into its commerce experience and, in the process, extend its focus beyond brides. It will always be the bride’s day, but as anyone who has ever seen behind the scenes of a wedding can attest, it takes an army. Moreover, brides want to share the decision making burden and overall enjoyment (and madness) of this process with their closest friends and family. Weddington Way addresses this by letting its users browse the site together, sharing comments and messages about merchandise, and making decisions collaboratively.
“This is how millennials live their lives,” Stern says. “The way we communicate, connect, and consume media is different than our parents did – so why hasn’t wedding planning changed?”
This wasn’t always obvious. When Weddington Way started, Stern and her team were focused on protecting their brides’ privacy and control, and initially locked down much of the social toolset that is available today. Sharing was only one-directional, from bride to other group members, but not the inverse. The loud and clear customer feedback was that brides wanted as much input as possible and were bypassing the site’s design by sharing login credentials. Stern was quick to make the necessary change in user experience.
Engaging other wedding participants, specifically bridesmaids, has a secondary benefit for Weddington Way that serves to set the company apart from other weddings-focused startups. While brides are generally thought of as one-time customers, bridesmaids often participate in multiple weddings within a multi-year period (typically their late 20’s and early 30’s), including their own. As a result, Weddington Way’s cost of customer acquisition and lifetime customer value is much more attractive than its industry peers, Stern says. Also, because the company sells four dresses to the average wedding, the first transaction resulting from the acquisition of a single bride is rather large.
The company sold more than 25,000 dresses in 2013, grossing more than $5 million in revenue for the year, Stern says, calling it a “real business.” Under three months into the new year and it’s operating at a $10 million annualized run rate. The company is cash flow positive but remains more focused on growth than profitability. Another unique element of this business is the ability to forecast sales with great precision. Because Stern knows her brides’ wedding date, that the average purchase is made eight months before the wedding, and her purchase conversion rate, she can map out her existing pipeline.
Other product features have contributed to Weddington Way’s success. Stern points to the site having the largest assortment of wedding fashions online “shoppable in the way brides think,” meaning according to color shade, aesthetic, and theme. The site also sends new users fabric swatches to deliver a tactile solution missing in so many ecommerce experiences and offers every user access to a personalized stylist. But it’s the platform’s collaborative social experience that has done the most to set it apart from the dozens of wedding etailers that have come before.
Weddington Way’s big new initiative is the launch of its private label collection. The company is starting with a few select styles in six colors and a wide size range. In this way, it’s able to offer its customers more flexibility, quicker fulfillment, more affordable pricing, and more flexible returns than is available through existing national retail and specialty boutique brands it traditionally carries. It also lets the company reduce inventory risk and shorten product cycles.
Stern believes her team has made some smart design decisions that will make these dresses favorites even among competition from better known brands. This includes using a custom couture fabric – it’s soft and matte, rather than the stiff and shiny bridesmaid standard – and incorporating pockets into all designs. It’s the small things like somewhere to put your lipgloss and cell phone that can make or break the day, she says.
Feedback from early customers suggests this private label could be a win-win. But manufacturing brings with it its own risks and challenges. Just because Weddington Way has proven itself capable of acquiring online shoppers and delivers a social shopping experience doesn’t mean it will succeed at creating product from scratch and efficiently delivering it to consumers. Stern is wise to start slowly and build up its private label business over time. The last thing her company can afford is to get distracted or otherwise interfere with the good thing it has going.
As Weddington Way expands its brand awareness and grows its list of satisfied customers, Stern intends to broaden the scope to become a comprehensive wedding fashion platform – that could include things like footwear, jewelry, and accessories for bridesmaids and even expanding to serve brides and groom fashion needs directly. Existing weddings ecommerce players like The Knot and Loverly are more akin to lead-generation sites, driving traffic to third-parties rather than owning the entire vertical experience. The company’s true competition is not other startups and ecommerce players but offline retailers and glossy print publications that have for decades served the needs of brides and wedding planners.
Stern has grown the Weddington Way team to 20 people, all based in San Francisco near Stern’s business school alma mater Stanford . The company raised a $2.5 million Seed round in 2011 (structured as a convertible note) with backers including Battery Ventures, Felicis Ventures, Trinity Ventures, Bonobos founder Andy Dunn, and other angels. A Seed extension last summer (of undisclosed size) brought on more cash and strategic advisory muscle, including JetBlue Chairman Joel Peterson and Asurion founder Jim Ellis. Stern anticipates heading out for a Series A round later this year.
Weddington Way is still early in its lifecycle, and while the data looks good today it has a long way to go to prove that this could be a sizable, sustainable business. History proves that the wedding industry isn’t one that is easily disrupted. But tackling the problem from a social-first perspective makes Weddington Way unique within the category.
Judging by early results, it may be enough of a wrinkle to flip the script on “wed-tech” and prove there’s money to be made by bringing wedding commerce online.
By Michael Carney