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Online fashion seller ModCloth finds social commerce strategy a good fit
Wednesday, August 04, 2010

On a recent Wednesday, a collection of young writers gathers on couches in the corner of an office in the Strip District. It's a meeting that brings them together every morning at 10:30.

A daschund dozes off on one writer's lap as 31-year-old blogger Richard Brown, a lover of all things "Star Trek" and Western wear, leads the discussion.

Wearing a black and teal bolo, he holds up clothes, jewelry and other knickknacks as if he's playing show and tell. His colleagues throw out catchy names for the items to post on the company's website.

"Grape Expectations" for a "stylishly novel" purple dress, "Strike a Rose" for a floral top and "Truffle Shuffle" for a pair of mushroom salt and pepper shakers.

It's another brainstorming session for one of the fastest growing fashion start-ups in the region -- ModCloth.

This online retailer, begun in 2002 by high school sweethearts Eric and Susan Gregg Koger, has become something of a Cinderella story.

It started the summer before Eric and Susan, living in Florida at the time, entered college at Carnegie Mellon University. Susan, now 25, who loved "thrifting," often bought more clothes than she could wear, so Eric, now 26, suggested selling the excess online. After graduating from CMU in 2006, the young couple decided to expand their small, dorm-room business into a full-time enterprise, offering women all over the world vintage-inspired clothing from independent designers.

Blossoming into a successful business -- with an office in the Strip District and distribution center on the South Side near Station Square -- ModCloth became profitable in 2009 and now employs more than 150 people.

Last year, Mr. Koger told Bloomberg Businessweek that ModCloth earned around $1 million a month in sales and more than 1.25 million people visit the website monthly.

The Kogers, now married and living in Friendship, announced plans to again expand their operations after raising $19.8 million in funding from Accel Partners. The company moved its new headquarters to San Francisco in May and opened a supply chain operation in Los Angeles.

The Pittsburgh offices will continue to serve as the hub for customer support and distribution.

ModCloth has five buyers traveling all over America to search for inventory that suits the company's style. Eighteen percent of its revenue comes from international customers and about 70 percent of the inventory comes from California, which is one of the main reasons why ModCloth moved its headquarters there.

Its top four designers are Coral & Jade Apparel, BB Dakota, Tulle and Ryu.

When it started, ModCloth sold exclusively vintage products. Since 2006, the company has added vintage-inspired clothing. The company posts between 10 and 55 vintage-inspired products and one or two vintage items on the website daily.

"The vintage items sell quickly because they're one of a kind, more special. We don't have as many vintage items anymore," said ModCloth's merchandising manager Ashley Guge. "But at the heart, we're still vintage."

Modcloth employees take great care in how they present their products on the website.

Its products arrive at the Strip District office on Smallman Street from the distribution center. Workers steam the clothes, prep them and put them on mannequins to be photographed.

The photographers shoot through the computer and the images are transferred to image specialists who edit the pictures. Since customers don't see the actual product before they buy it, one difficult part of this process is making sure that the picture looks like the product. After this process is finished, the product goes onto the website.

There are no desks or cubicles in ModCloth's Strip District office -- just oddly shaped tables with flat-screen computer monitors and an assortment of dogs that come to the office as often as the employees do. A Pomeranian, a Jack Russell terrier, a Yorkie and several pugs roam the office or sit obediently next to their owners' sides. Susan Koger's pug, Winston, is the company's mascot.

At the brainstorming session, the writers discuss and manage the company's newsletters, stylebook and blog.

Each of the writers' projects varies throughout the week. They blog three to five posts a day about fashion, food, music, books and more.

Aside from interacting with customers on Facebook and Twitter, ModCloth has a popular feature on its website called "Be the Buyer," in which customers can choose which clothes they like. The products that get the most votes become part of ModCloth's inventory. Shoppers can vote on items they want to see in stock, help name and describe products and suggest styling tips.

"We're trying to democratize fashion so a lot of the features like 'Be the Buyer' allow our customers to choose items that wouldn't have gone into production otherwise," said Alicia Barnes, 25, ModCloth's public relations manager. "We want to continue with features like that and make the site more of a community and more of a social shopping experience for customers."

Last November, Modcloth added ModStylists to its staff to act as personal shopping assistants and to answer shopping and style questions. The ModStylists guide customers and give advice from how to accessorize to what to wear to an event.

"Our department offers style advice to our customers and they can chat, e-mail or call us ... live chats are our most popular medium," said Nicole Czapinski, 26, a ModStylist, wearing a bird-shaped, plastic pin in her hair.

Sharon Vaknin, a blogger for CNET News, wrote that it's rare for a company to have such an interactive relationship with its customers.

"Without the customer-company separation, ModCloth is more like a best friend who gives you fashion advice, shares her favorite recipes, and joins your book club," she wrote in March. "Wait, we're still talking about a clothing store, right?"

Mrs. Koger said the interaction has been effective.

"We have genuine conversations with our customers and listen to their opinions through social networking, our blog and ideas like 'Be the Buyer,' " she said.

"ModCloth is my life's work and what I'm passionate about, so I hope that we're able to continue to grow and do new, innovative things."

Sonya Chun: schun@post-gazette.com or 412-263-1944.

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First published on August 4, 2010 at 12:00 am