Everything Marketers Can Learn From Revolve’s $1.8B Valuation
Revolve, the “next-generation fashion retailer for millennial consumers,” has done it again. After years of leading the pack in the fashion and eCommerce industry, it comes as no surprise that the company raised $212 million in its initial public offering this past Friday. By midday, shares climbed to $34, putting the company’s valuation at more than $1.8 billion.
You’re not alone in thinking, what is the secret sauce that has allowed Revolve to grow into a fashion-powerhouse and frontrunner in an ultra competitive industry? The answer lies in the brand’s winning strategy which combines advanced performance marketing with an emphasis on influencer and community driven marketing.
Community building is what has allowed brands such as Revolve, Glossier, and the like to become much more than just online retailers. They are lifestyle brands that millions of people want to be a part of. Revolve relies heavily on the more than 2,500 influencers for brand amplification and customer acquisition. Influencers are the new tastemakers in the fashion space, not necessarily high end magazines and editorials. By building and leveraging relationships with these social media stars, Revolve unlocks the ability to speak directly to their dedicated audiences.
The fashion retailer has seen a high return on investment as influencer marketing drives nearly 70 percent of all sales. In 2018, Revolve saw over 9.4 million unique website visitors, and an average order value of $279, 79 percent of which were at full price.
The industry as a whole is transitioning to embrace digital channels as the new norm. And Revolve has changed the game as one of the earliest “influencer first” brands. Conventional brands hesitant to adapt, take note. We can expect to see many more IPOs from the brands that adopt these strategies.
Storytelling through influencers
Revolve knows its audience, as their 3.1 million Instagram followers can attest. With the help of everyone from high profile influencers to those with only a couple thousand followers, Revolve has branded itself as the “it girl.” Millennial women want to be her, and influencers want to be her best friend.
As the barriers to entry for direct-to-consumer brands are declining, more brands are competing to capture the very limited attention of the masses. Today’s consumers, particularly those under the age of 35, gravitate toward the brands that resonate closely with their interests and appear to value them as individuals. That is why disruptive brands such as Revolve have turned to social media and influencers to build emotional connections with their customers on the channels they know and love.
Influencers provide a scalable and profitable way to amplify the brand’s message and deliver the brand’s audience authentic yet aspirational content. In an Interview with Glossy, brand officer Raissa Gerona stated, “We focus on millennial female consumers, and none of them are looking at magazines anymore. So, we looked to who that customer was listening to.”
78 percent of luxury buyers are active on social media and consumers are 1.3x likelier to purchase a product recommended by an influencer rather than a traditional celebrity. Gerona finds that influencers speak to their customers “in a way that amplifies that message tenfold, because they’re doing the same thing we’re doing everyday — promoting the brand, the lifestyle, the clothes — but on a personal level.”
Selective, long term partnerships
Still, it’s not enough to work with any and all influencers. As consumers favor highly accessible brands, choosing the right influencers to work with is crucial when the goal is exclusivity. Revolve works with thousands of influencers each year and has strategies in place to ensure each partnership is on-brand. From their initial interaction, through each subsequent campaign, Revolve uses engagement data to determine the depth and length of each influencer relationship. For example, an influencer may be invited to only one brand event, while a top performer becomes the face of their own exclusive clothing line.
“We want to build deeper relationships with [influencers] – which can include creating a product together – to continue to create and grow each other’s brand”, says Gerona. Influencers are offered free clothing, travel, monetary compensation, or a combination of the three in exchange for promotion. The brand has the ability to work with thousands of influencers for little to no cost because for influencers, as Gerona states, the association with Revolve only elevates their personal brands.
But Revolve doesn’t limit their relationships with influencers to collaborations on Instagram, customers are exposed to influencer generated content across their website and their army of influencers are always present at branded events across the globe.
Winning event strategy to boost follower growth
Many eCommerce brands struggle to add depth to the seemingly transactional relationships with their customers. Revolve engages their audience IRL through music festivals and events like the brand’s very own “Revolve Festival,” a huge concert and pool party headlined by top artists.
Instead of paying influencers to post at these events, the brand provides an amazing experience complete with unlimited rosé and In-N-Out, A-list celebrities, and instagrammable backdrops so that influencers want to create content organically. Unfortunately, for us, tickets to Revolve Festival are not for sale – the brand fosters a sense of exclusivity and community by holding contests that allow only a select few highly engaged customers to snag tickets and party it up, Revolve style. To Gerona, this approach is “so much more valuable than selling a ticket to someone who doesn’t really understand what we’re about.”
By the end of the festival season, consumers are exposed to so much content featuring Revolve clothing that they begin to associate the brand with events they are able to attend, such as Stagecoach and Coachella. This past April, Revolve provided clothes for more than 750 influencers during Revolve Festival, and in return gained 130,000 Instagram followers and $2.5 million in sponsorship dollars.
Momentum Worldwide Proprietary Research conducted a study in 2012, and again in 2019, and found that the consumer and brand relationship is evolving to focus more toward human-centered experiences and less on transactional exchanges. Although your typical customer is not necessarily lucky enough to snag an invite to Revolve events, the brand still makes an effort to make their customers feel like they are a part of the exclusive girl group. The UGC hashtag, #revolveme, encourages Revolve customers to create and share their own content in Revolve clothing in the hopes to be featured on the brand’s Instagram. As of now, the hashtag has nearly 400,000 uses on Instagram alone.
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