Threads Styling, the leading global luxury chat-based shopping platform, recently secured $12m in funding to further expand its ecommerce presence. The success stems largely from the company’s ability to understand the luxury retail landscape, as well as the next generation of shoppers.
In this article, we take a look at what other factors are driving the company’s growth–and what retailers can learn as we enter a new era of conversational commerce.
Threads Styling cashes in on the social shopping revolution
Sophie Hill, CEO of Threads Styling, knows what the next generation of shoppers wants; curated fashion inspiration and convenient, personalized service. In fact, she’s built a $60 million business catering to these wishes.
Back in 2010, Hill pioneered shopping via chat when she launched Threads as a personal shopping service. She later relaunched the brand as a social and chat-commerce marketplace in 2014.
Since then, Threads has become the go-to luxury shopping platform for Gen Z and young millennials. The company leans on in-house stylists and a network of personal shoppers to curate the ‘ultimate edit of brands’ and connect customers with exclusive items.
Now, the chat-based shopping platform has closed a $12 million funding round to scale its personalized shopping experience. The move comes after the company reportedly doubled its revenue since the start of the pandemic.
The $1.2 trillion opportunity
The success of Threads comes as no surprise in today’s environment. During the pandemic, we saw how high-touch business models were forced to adapt to a no-touch world. From car buying to wedding dress shopping, people became more comfortable buying big-ticket items online.
In fact, Threads was able to attract new customers during the crises, many of whom were previously hesitant to make the jump into digital. “We have seen customers purchasing goods at our higher-value price points, which actually comes down to the fact that the stores are closed,” says Hill.
And the company’s chat-based business model was also well-positioned for success. With the pandemic came the steady rise in time spent on social media and messaging apps. Social platforms have become even more essential in our daily lives–and people want brands to meet them there.
Even as physical retail returns to normal, the social commerce industry isn’t slowing down. According to Accenture, the $492 billion global social commerce industry is expected to grow three times as fast as traditional ecommerce, reaching $1.2 trillion by 2025. This growth is predicted to be driven primarily by Gen Z and Millennial social media users, accounting for 62% of global social commerce spending by 2025.
As we move full-steam ahead into the conversational commerce revolution, let’s round up some of the key lessons we can learn from Threads.
5 Lessons we can learn from Threads Styling
1. Repeat customers are critical
One key to Threads’ success is the brand’s focus on repeat customers. These days, the cost to acquire new customers via paid advertising is at an all-time high. Retailers, especially luxury retailers, should focus on how to drive growth within their existing customer base.
“In luxury, repeat customers drive business, but they often aren’t given as much focus. In e-commerce, when you have a big strategy around paid acquisition, you really are quite split between your focus on the repeat and the new,” Sophie Hill says in an investor interview.
“We wanted to build a business that was solely focused on the repeat loyal customer base who were spending regularly with us. We spent so much time with them, asking them: okay, what do we need to do for you that would help make this the best possible experience?” says Hill.
2. Convenience and personalization define the retail experience
For Threads, creating a luxury shopping experience is all about convenience and personalization. It’s about meeting customers how, when, and where they want to be met.
Threads’ stylists curate content to make brand discovery fun on social media. Then, its personal shoppers give customers first-class service–the same type of service they might experience in a luxury goods store.
The bar for convenience and personalization is high, and brands that are able to meet it have much to gain. These superior customer experiences drive brand loyalty, which can be difficult to win in today’s retail environment.
3. Social media fuels brand discovery
The next generation of consumers discovers brands on social media. Brands, influencers, and individual sellers now use social media to drive engagement and brand discovery.
“Social media is their shop window and their inspiration, and they were all early adopters of Instagram and they were the first movers, so it made sense. We’ve built our business on chat commerce because customers are telling us that’s where they want to talk to us and transact,” says Hill.
Social media is a digital catalog for the next generation of shoppers. A lot of brands like to use social media as a paid acquisition channel, directing customers from social channels to their websites. While paid strategies certainly have a place, brands should focus on what they can do to integrate more experiences within these channels organically.
4. The next generation wants to communicate on chat
Customer communication preferences are always evolving, but never more so than in the past decade. People no longer have the patience to wait on hold. They’d much rather use channels that let them multitask, or communicate asynchronously.
From the start, Threads knew that they’d need to be on messaging apps like WhatsApp and WeChat.
“We asked right at the start how they want to communicate with us, and they said they wanted to communicate with us on chat: everything that we have built has really been about delivering to them in a way that they want to be served.”
5. To grow, innovative brands might need to expand into more traditional channels
Now that Threads has mastered the art of chat-based commerce, the brand is looking for growth in more traditional places. The most recent round of funding will (in part) help the company build out a more traditional ecommerce website.
While chat-based personal shopping services will remain the core of the business, the new ecommerce website will give customers another way to browse and shop, as well as open up new partnership opportunities and revenue streams.
We’re seeing many innovative commerce brands take a similar approach. For example, many successful direct-to-consumer brands are now opening physical retail stores. Armed with first-party data and customer insights, they’re using their knowledge to create profitable business models on other channels.