Eric KogerCEO & Co-Founder, ModCloth

The $100 Million Equation: The Art and Science of E-Commerce

Commercism Conference

March 21, 2014

Who Is ModCloth

Raised $48 Million in Funding

503 employeesHeadquartered in SF

San Francisco – 154 Los Angeles – 53Pittsburgh – 296

In 2013...

• Collection of over 7,500 designs from over 1,200 designers

!• Growing private

label business

Remarkable Assortment of Fashion & Decor

Retro & Vintage-Inspired

One-of-a-

Kind Vintage

Unique Marriage of

Art and Science

965 4,550

2,914 3,031

26,621 14,767

25,061

Available for Sale

2-12 Weeks

Traditional Retail “Push” Model

Disruptive “Pull” Model

Customer signals inform buying re-order decisions

Vast majority of Inventory sold at full price

✓

1 YearBuyers Inventory Discounting

Buyers

2-12weeks

2-12weeks

How It Began: Be the Buyer

Morgan Skip It!

Holy salmon stripes, Batman! What is that ruffly crap oozing out of the blood red waist line, there? Honestly, from the waistline down is sort of cute, but that top is a hot mess.

Bethany Skip It!

If it weren’t for the ruffles above the waistband, this would be a really adorable dress.

ModLover Skip It!

The ruffles over the belt completely ruin this dress! Get rid of the ruffles and it would be amazing.

11.3% Pick It!

88.7% Skip It!

Before

Bethany Skip It!

If it weren’t for the ruffles above the waistband, this would be a really adorable dress.

Customers provide direct feedback… “Get rid of the ruffles and it would be amazing.” … we incorporate into our merchandise.

11.3% Pick It!

88.7% Skip It!

Before

63.4% Pick It!

36.6% Skip It!

After

• Be the Buyer products historically sell 2X as much

!• Lifetime spend

of Be the Buyer customers is 3X more

Lean DNA Paves the Way for Great Ideas

Community outfit-sharing platform with shoppable images and style inspiration.

Windy City Dress in Navy

Style Gallery Inspiration (11)

!• Over 20,000 total

photo submissions

!• Conversion is over 50%

higher than site average !• Over 1.1 million loves on

our Style Gallery

Efflorescent Effect Dress

Heart of the World Bag

Too Much Fun Dress in Black Dots

Installation Art Exhibit Tank in Aqua Zigzag

Time for a bite Necklace

Efflorescent Effect Dress

Heart of the World Bag

Too Much Fun Dress in Black Dots

Installation Art Exhibit Tank in Aqua Zigzag

Takeaways

SHE ENGAGES

SHE INFLUENCESDATA ENABLES

PERSONALIZATION

SHE FEELS OWNERSHIP

SHE VISITS

Takeaways• Niche Start = Competitive Advantage &

Fundraising Disadvantage

!• Niche Focus x Iterative Expansion = Scale !• Marriage of Art & Science = Lean Principles x

Creative Leadership x Analytical Course Correction