When Ben Fischman started out on his first entrepreneurial venture, Lids Corp., in 1993 as a college junior at Boston University, he was not trying to invent something that had never been done before. The idea was simple: he and his friends all wore baseball caps, but there was a lack of retailers who sold caps that combined both style and fit. Lids started the specialty retailing of baseball caps, and by the time Fischman sold the company in 2001, Lids had grown from one kiosk to 350 retail locations in malls across the U.S
“The difference between our team and other people is that we did it. The shame is when you have the idea and you don’t try to do it. Not trying is the real shame of great ideas of great entrepreneurs.”
Fischman translated this fearless attitude and passion for reinvention into his latest venture, RueLaLa, an invitation-only online shopping destination that gives members access to private “boutique” sales on premium merchandise that close within 48 hours. Today, RueLaLa is valued at $400 million and boasts 2.6 million members who sign on at 11 a.m. every day and buy 75% of the items in these boutiques within the first hour.
As with Lids, RueLaLa was not a new idea. By Fischman’s own admission, RueLaLa is an off-price retailer in the same vein as Marshall’s, Ross, or TJMaxx, but he says that the member experience is what separates RueLaLa from the rest. Each of their products is stylized and marketed in a “happy, fun, whimsical” way that seeks to make an emotional connection with shoppers and keep them coming back for more. Fischman has sought to inject the E-commerce world, which was all about convenience, with some excitement and urgency.
“Shopping for fashion is an experience. It’s sex and it’s sizzle, it gets your blood rushing and you’re excited about it. And none of that was happening online.”
Fischman also discussed how RueLaLa continues to thrive where other E-commerce businesses have struggled. Citing RueLaLa’s astronomical retention and purchasing rates, Fischman pointed out how the 48-hour limit creates an incentive for customers to buy immediately, just as they would buy an item they loved in a store that they felt would not be there when they returned. According to Fischman, 80% of shopping carts on any other E-commerce site are abandoned. Also, where other companies spend millions on marketing to drive users to their site, RueLaLa is based on member referrals.
“The question we always ask is: Would you recommend [us] to a friend? The power of a friend referring a product, service, or experience is the most powerful validation you can provide to another person to go into business.”
Since the average RueLaLa member visits the site five times a week, it appears that Fischman has made his vision for E-commerce a very lucrative reality.