Reya Al-khudairi spends thousands of dollars on fashion bags and sunglasses that will soon be just left in a closet. “The season comes and goes and the bags stay,” she said. “They go out of style, I can’t do anything with them.”
During her University years, Al-khudairi worked at Club Monaco and Tommy Hilfiger for a combined five years.
“I was always ahead of fashion,” she said. “I always wore the latest outfits, the latest designs, and I always wanted quality so definitely when I shop for things, it’s always quality,” she said.
“But I noticed that it’s getting expensive and I always have to change it. I noticed that there’s a problem and if I’m experiencing that then a lot of girls are.”
Al-khudairihas to clean out her closet every three months just to make enough room for the next line of fashion to be eventually thrown out again. That’s just one of several annoyances that fashionistas like her have to put up with.
The solution is simple, online subscription shopping fits perfectly for young Torontonians who are looking for convenience and product variety.
A study conducted by managing consulting firm McKinsey & Company say that e-commerce subscribers are most likely to be 25 to 44 years old, have incomes from $50,000 to $100,000, and live in northeastern urban areas.
The perfect description of a fashion savvy Torontonian.
Al-khudairisaw that there was an untapped subscription market for Toronto fashion.
“It’s all about minimalism. We’re moving to an era where people just don’t want to have a lot of things and we’re not using them so I feel with the subscription model, it’s good to just sort of rent the item and return it if you want to,” she said.
“Get things that you need instead of just piling up in your closet.”
Al-khudairiand her brother co-founded Kuka Melon, a company that allows you to rent designer handbags and sunglasses at an affordable monthly price.
“By renting it out, it allows you to stay up to date with trends,” she said. “Nowadays people pay attention to what you wear, so why not keep them guessing.”
Lars Perner, a marketing professor at the University of Southern California, describes a concept in behavioral economics called the endowment effect, which influences consumers to hold on to their subscription services.
“You ask people how much money they would pay for the market and you find that people who possess [items] through the endowment effect want much more money to give it up than people who are willing to get it in the first place,” said Perner.
Kuka Melon follows the curation-based model to a tee: you can either cycle between designer items on a monthly rate, or choose to rent out a single item for months without paying the full price of the item. If you like it that much, you can own a rented item by purchasing it for 80 per cent of its retail value.
“I think the internet has made it much more feasible because people may be more comfortable signing up if there’s a choice involved and you can communicate much more easily,” said Perner. “There’s no question the internet has helped further provide more special subscription options for a mutual product.”
It may sound great, but making success in a subscription-based business is more difficult than it looks. Only 55 per cent of online shoppers who consider a subscription service actually subscribe.
Al-khudairiunderstands that problem better than anyone. “People definitely have hesitations,” she said.
With brick and mortar stores come impulse buys. Al-khudairinoted that more often than not she would shell out top dollars on an expensive handbag, only to realize later it didn’t fit her style. Al-khudairifeared that there could be return issues, but renting it lets you return it easily and at a lower cost. It’s not a commitment.
“I bought a brand name bag that was a square and I couldn’t really put my hand in it to retrieve stuff, and I’ve spent thousands of dollars on it which is really useless, but if it’s a rental I can return it and get a new one,” she said.
Al-khudairi makes sure to respond to customers who are unsure about the quality of the product or the extent of the service. “The bags are good quality. If you’ve received something that isn’t up to quality of what you exactly want, then you’re definitely more than welcome to send it back and we can send you something else,” she said.
It’s very important to have a strong personalized experience as 28 per cent of curation subscribers say this is the biggest reason to continue their subscriptions.
Choulalabox, an online stylish kids-clothing store based in Montreal gives its consumers the ability to choose a customizable clothing set for kids
Its founder, Rola Amer incorporates her trademarked concept known as ‘BLAST.’ It stands for all five categories (bottoms, layering pieces, accessories, socks and shoes, and tops) that make up a wardrobe.
As a mom of two with a marketing career, Amer had no time to shop for her kids. “Weekends were horrible to shop with them because they were little,” she said. Getting to the mall was already trouble, but packing snacks and diaper bags for two kids under six was even harder for Amer.
“I just grabbed essentially what they needed without putting thought into it,” she said. “Literally, the closet was full with clothes that haven’t been worn. There were still tags hanging onto them.”
“I said, ‘you know what? This is nonsense.’ This is not sensible how we’re consuming fashion. So, I thought I’d love to have a shop where I can browse online, from the comfort of my home and build a wardrobe box for my kids of a handful of pieces that could be mixed and matched each season until they grow to the next size.”
Amer says shopping online is more consumer friendly. “Also, because you don’t find the type of inventory you like in brick and mortar.”
Her initial concept was really a capsule collection for kids, with ten pieces of clothing that mixed and matched into 30 outfits. But with customer feedback, she found out that parents want an element of personalization and customization. It then moved into a starter box where you can add in your own pieces to create more outfits.
Fifty-five per cent of all subscriptions are curation-based, meaning there’s a great selection of different items with varying levels of consumer decision making.
Her business is looking to further expand the online subscription model by adding a build-your-own BLAST box. She’s also looking to add a children’s illustrated book to her collection. The book focuses on giving your own children independence and teaching them the possible styles and combinations of outfits.
“Now the brand is evolving into, not just a complete one stop shop to get your kids needs in a box, but also as a learning tool for your kids to teach them how to dress themselves, how to express themselves in fashion,” said Amer.
The secret marketing ingredient of online shopping has finally been recognized, and it’s giving consumers a high selection of different items, with varying levels of choice.