By Aimee Chanthadavong

US-based indie fashion online retailer ModCloth has shaken up the online apparel industry with its leftfield retail approach.

ModCloth was co-founded in 2008 by two high school sweethearts Susan Gregg Koger and Eric Koger who began initial operations from their college dorm room. The online business has since climbed the ranks by excelling in marketing, merchandising and social commerce, turning over US$20 million per annum in sales in less than four years.

Speaking to RetailBiz Susan Koger said ModCloth’s growing success has been to understand their customers and knowing exactly what she wants rather than taking a one-size-fits-all approach.

“Our customer engagement has been a huge part of our business and success. Being online only we haven’t been able to have a physical presence where customers can come out and see us and experience the brand, so it’s important to have all those interactions whether it’s through social media or our site or customer care and ensure that they’re personal and really represent the brand well,” she said.

ModCloth’s social media following includes 80,000 Twitter followers and 500,000 Facebook fans. The company has used this to their advantage through the launch of “Be the Buyer’, an initiative that lets shoppers play a role in inventory decisions. It invites customers to vote online on their favourite samples and stocks items based on these selections – a strategy that drives customer engagement while minimising risk. At the same time, it gives its boutique suppliers the opportunity to show-off their designs.

“I think the one of the most major way ModCloth is breaking the retail rule is getting the customers involved earlier in the process and letting her dictate to us what we should be buying. So rather than having our internal team of merchandisers and buyers set the trends we’re really looking to our customer to tell us what’s working and what she wants to wear,” Koger said.

Core to the business is not only concentrating on customer engagement but also replenishing the products ModCloth customers are after.

“A big part for why we have great product is because we get our customers involved in helping us choose the products in which we carry. So the way we buy traditionally is we buy a small lot, test it to see what works and then we replenish it. Across the product catalogue we’re really listening to her. Rather than say a bricks and mortar retailer where you have to clear out your rack space before the next season’s good,” Koger said.

“For us if she’s still loving that dress and she’s leaving great reviews and it fits well then we’ll continue to carry it. Some of the best selling items have been on the site for many seasons. So we do move onto new stock but we’re willing to be flexible and carry the true products she loves.”

Further to keeping customers intrigued, ModCloth has also gone a step further from ‘Be the Buyer’ by asking customers to come up with their own designs. As part of the ‘Make the Cut’ contest, ModCloth saw over 900 design submissions from its customers over two weeks.

Going forward, Koger said the company will continue to improve its online presence.
“We feel there’s still so much chance in improving the e-commerce experience that’s where we really need to focus and that much amount of time.”

Susan Koger was a keynote speaker at the Online Retailer Roadshow in March 2011.