Adam Goldenberg, co-CEO of TechStyle Fashion Group, spoke about the company on CNBC. He stated that they like to give their customers the choice to buy at regular retail or through their V.I.P. membership model. He stated that the membership model is very flexible, so the customers can choose to buy that month, or skip that month entirely. On average, customers usually choose to buy 3 or 4 times per year.
Adam Goldenberg also spoke about how it’s difficult to start from nothing. They have made a lot of improvements to the membership model since they first launched, but anytime you start something new and go from nothing to a large company, there are going to be challenges that you have to overcome. Whether this is adapting to fit the customer’s’ needs, or changing the system entirely. When you go from 0 subscribers to 4,000,000, there are going to be issues on cnbc.com. It’s almost unavoidable, but what TechStyle did was change and modify their models to fit what the customers wanted. The V.I.P. membership program is “opt-in” right now, and is very transparent with reminding customers to visit every month. The goal is to ensure that the customers understand the program.
Recently, similar online retailers have been exiting the market. Adam Goldenberg was asked to talk about what made his company different and why they would succeed in the market. He stated that they are different. They are building brands. All the other brands have been around for decades. Fashion landscape is changing, so they too have to change. According to rgtadvisors.com TechStyle uses technology and direct relationships to build their brands. They deliver great brands at great value and the customers love it.
Because of the way the industry was going, it was difficult for TechStyle Fashion Group to raise funds effectively. Goldenberg noted that the difficulty stemmed from having to catch the fashion trends at the right times.
Managing inventory is one of their biggest challenges, but through their research, they discovered that they could predict their inventory demand with 90% accuracy. This means that they will have no obsolete inventory, and that efficiency can be passed on as savings to the customers.