I recently had the opportunity to interview Lauren Cappell with Gwynnie Bee, the plus-size subscription clothing company that’s seen explosive growth over the last few years. Cappell’s official title is Senior Director, Strategy & Emerging Partnerships but her current focus is on member value and retention.

 

Can you tell me more about your role and your day to day?

I’m the Head of Member LTV (Life Time Value) and Retention. We currently have a four-person team focused on retention and LTV. Our job is to maximize retention and lifetime value. In our current model, as it is for most subscription businesses, retention is a key driver in lifetime value. And lifetime value is effectively a measure of profitability. What value do you get from the member over the course of her life with Gwynnie Bee?

There are lots of different ways to define it and calculate it. We have our particular way, but it’s basically the projected revenue that a member is going to generate during her lifetime as a member, minus the costs of serving that member.

Retention is a major driver for our LTV and we look at the two components together. Our aim is to look holistically across the company and across the member’s experience and to provide them with a consistent, value-filled experience.

 

And who does your team work with?  

We work with virtually all teams across Gwynnie Bee. We have a merchandising team and they decide what clothing we buy, how often we launch it and when to launch particular styles. They also manage our photo shoots, visual merchandising, and other aspects of the service. They’re responsible for the inventory (i.e. the clothing), which is the most important part of the experience.

We have a transactional team that offers members the opportunity to buy styles they’ve loved, in addition to our ecommerce shop site. This team is focused on understanding how and why people choose to buy our clothing. We developed a pricing algorithm which sets prices for our clothing and helps us manage our supply and demand, and we study carefully how that impacts members’ decisions to buy, participation rates, promotions etc.

Then we have a marketing acquisition team that’s very focused on acquiring new members. And we have a customer service team that looks at how we respond to members who actively reach out to us because they have questions or concerns. We also have a product team, an analytics and data science team, an engineering team, as well as an operations team. Each team looks at our members through their own lens. And what we try to do on our team is bring it all together and ensure that we understand how these different pieces get presented to a member, as Gwynnie Bee. We try to ensure that that is coordinated holistically and that we provide members with the right value.

We do that by focusing on the various drivers of retention. What aspects of our service make people stick around? How do these drivers relate to LTV? We’ll work with our data science and analytics team to develop and constantly revise the retention propensity models, which informs our views on what aspects of a member’s experience might predict whether they’re likely to retain or churn. For example, do they get clothing they wear? And love? When they return clothing, most people give us a rating. We know whether they liked it or wore it.  One of the biggest predictors of whether people going to stick with our service is whether they are getting clothing that fits them, that’s seasonally relevant, and that they love.

We call that “wearability”. While our merchandising team is responsible for wearability, we work with them and many other teams (product, engineering, data science, customer service, etc.) to improve wearability scores since this is critical for member retention.

 

It sounds like you’re very focused on member-experience. Can you tell me more about that?

We try to take what we know on the business side in terms of what drives retention and therefore delivers value to Gwynnie Bee, and translate that into how we deliver value to members. We communicate that across the different business units within the company and ensure that they understand what matters most to our members.

 

The plus-size community seems to have grown in the last few years. How does Gwynnie Bee fit into that story?

The plus-size community has become a much stronger, more vocal and more visible community recently. We try provide that community with an experience that up until now they didn’t really have, though we’re certainly not the only ones doing it. I think in the last year or two, the idea of giving the plus-size community more options in the fashion space has really exploded – and it’s really exciting to be a part of this change.

It’s one of the subjects that we talk about a lot within the retention team – how do we foster a sense of community at Gwynnie Bee? There are obviously many different ways that you could do it. We’re very focused on why women stay with the company. It’s because they’re getting clothing they wear and love. Clothing that makes them feel good and confident, and allows them to experiment with clothing and expand their wardrobe.

How would enhancing the Gwynnie Bee community help meet that overall goal? One idea we’ve discussed is enhancing to our user reviews. We currently have reviews and people do rely on reviews to understand, is this a garment that would fit me well? Does this top suit my body shape or my size? Does this color flatter me? For example, perhaps we could make those reviews even more helpful to our members if we could get more reviews with photos. Perhaps we need to make it easier for members to share photos so that members can learn from each others’ experiences, and that might help deepen our sense of community.

 

Can you tell me more about the technology that drives your business?

We are a team built on an incredible technology and back-end platform. It is without a doubt critical to our success. The power behind our data science and analytics team is phenomenal, and allows all of us, particularly on the business side, to make much smarter data-driven decisions. In addition to that, one of the things that I’m personally very focused on is ensuring that most people in the business side are data-driven in their own right and comfortable with our data. I really want to make sure that we’re all empowered to act on the powerful data that we have. Fortunately, we have a great data team that works on providing data that is digestible, understandable, and accessible by everyone.

 

Where do you think retail is headed?

More than anything else, technology is changing members’ expectations of the service we can deliver.

A few years ago, there was a lot less powerful technology powering the fashion industry. We’re now moving into a world where lots of companies are experimenting with how to deliver a more personalized, meaningful experience to each customer. And I think that requires both knowing a lot about your own inventory and knowing a lot about your customers and prospective customers. We’re one of many business models looking to combine our understanding of our members and our merchandise to exceed our members’ expectations. And those expectations are high.

We use our data to understand our members and to understand how to match our members with the kind of inventory they want. Certainly, a lot of the experimenters within the fashion tech space are trying to do similar things, such as Stitch Fix and Le Tote. Many companies are trying to do the best possible job of understanding what members want, from what they tell you and from what they actually do with your service. You have to combine both of those elements and understand how they work together.

I may say, for example, I want a black T-shirt. But does that mean a V-neck? Or scoop neck? Or crew neck? If it’s a V-neck, how many inches down from my neck do I actually want it to fall? When I say I want a t-shirt, what’s the shirt like? What’s the length of the garment? What’s the material? There’s so many options… and that’s barely the tip of the iceberg. This requires building out a full taxonomy to describe your own inventory, and then to try to connect those data points. I think that’s likely what we will see – a lot more sophistication in that regard.

 

How does the rental economy come into play?

I don’t know you personally, but I’m guessing if you’re anything like the average woman, you have a closet full of clothing. On average people wear about 10% of what’s in their closet. It’s a tremendous waste of money to buy all this stuff. And that’s really what we are trying to capitalize on through Gwynnie Bee. We’re not saying that you shouldn’t buy anything. There are things that you love and want to wear forever – and, of course, you need your basics. And you should go out and buy those. And own those. And wear them over and over and over again.

But for that other stuff, if you’re not sure, try it out. See if it works. And that’s what we want to offer members. How often does this happen to you: you buy a blouse, and you’re like, I love this, I’m going to wear it all the time. And you get home and you’re like, I don’t really know how tuck this in, or am I just supposed to adjust it? I feel like I need a new pair of pants to match it and I don’t have that, and 6 months goes by, and I don’t have that. I don’t have the skirt I want to tuck it into with the right belt. And then you don’t wear it. And all of a sudden the blouse that you loved so much in the store and you spent $50 or $300 on, is just wasting away in your closet.

Our service is a way to figure out what works: what works as a one-off, what works as a staple in your closet, and what works as a seasonal staple that you don’t want to own forever. There’s all sorts of different ways to engage with clothing, and we’re focused on offering a different model for engagement. How do you get the most value out of your wardrobe? How do you get what you want, but also give yourself room to experiment without making any more wasted investments in clothing that doesn’t work for you?

 

You transitioned from corporate law into the startup world. Can you tell me more about that shift? 

I started in March of 2015, almost two and a half years ago. When I started, I was leaving Thomson Reuters to join a startup but the startup already had 150 or 200 people. It had already at that point become bigger than a lot of startups. Now that depends on your definition of startup…

We were in a pretty small office in Long Island City in Queens when I started, which couldn’t be further from the world in Times Square where I was with Thomson Reuters. We’ve since moved to another office in Long Island City which is probably triple (or more) the size of the original space, and then we subsequently took over more space on another floor for our photo studio. It was definitely a big adjustment to go from Reuters to Gwynnie Bee, but I had already transitioned from law to the business side before doing my MBA, so this change was more about moving from a corporate giant to a small company, and into a very different role.

I think we’re at roughly 400 employees now with offices in New York, Palo Alto, Bangalore, and Delhi, in addition to the warehouse operations in Ohio. We’re growing at an incredible rate right now, and it’s been amazing to see new people come on board. But it’s definitely a different experience than it was when I joined.

It’s like everybody says, you live through the growth of a company and your experience changes. I really loved being a part of a smaller company. Now it’s harder to keep up and to get to know everyone who joins Gwynnie Bee, and that’s been an adjustment for all of us. But that’s part of the natural evolution as companies get bigger.


Throughout our conversation, I was taken aback by Cappell’s passion and thoughtfulness. Her approach to member retention requires a thorough understanding of her customers in conjunction with a team that operates like a machine with a heart. While we tend to focus on the future of retail in terms of analytics and optimization, Gwynnie Bee takes a different route. By capitalizing on a wealth of data, Cappell’s team nurtures customers through a rental process that makes sense emotionally and financially. While we may view that black V-neck as just another tee shirt, Gwynnie Bee emphasizes the interplay between our sense of self and our sense of style.