Revolve Rides The Power Of Influencers All The Way To An IPO

For many shoppers, Revolve is not quite a household name as of yet. The brand largely focuses on (and sells to) younger shoppers — particularly millennials and Gen Z. But among that rather critical shopper demographic, Revolve has found a powerful sweet spot, especially for its private-label offerings. The site in total offers 500 brands for consumers to choose from, of which only 19 are its own label (a little over 4 percent). Despite that fact, however, eight of the retailer's top 10 best-selling brands are Revolve private label, which according to its latest SEC filing provide 27 percent of the firm’s revenue.

But of course the more interesting information in that SEC filing is the news that Revolve is about to take its large audience — 7.3 million unique visitors come to shop its wares each month — and make a move on the public markets. Revolve is pushing forward with an IPO and is looking for a $100 million valuation coming out of it.

It’s been described as a “fancy price tag,” particularly for an eCommerce up-and-comer most people have never heard of. But, in talking with the staff, and looking over the prospectus it just submitted to the FCC, it is clear that in at least two regards Revolve is quite different than the sea of eCommerce competitors it finds itself swimming in. Its $100 million IPO goal is ambitious, but not insane.

The first regard in which Revolve looks to stand out from the pack is in how it uses data, to inform both what it offers and how much of any offering it provides. According to Revolve, the company tracks more than 60 attributes for each product on the site and, depending on results, uses the guidance on consumer preferences to make its selections for what goes up. But it doesn't go all-in for anything, instead focusing on small-batch offerings to see what consumers respond to before ordering more.

Revolve does roll out a lot of goods: according to some reports. the site added over 1,000 new styles each week in 2017, from emerging, established and owned brands. Emerging brands make up the majority of sales, at 52 percent, even though private-label brands make up a larger share of overall revenue. And, notable, private label is growing faster than anything else — revenue in that segment was $79.9 million last year but picked up to $120.6 million for the 12 months ending June 30, a 50 percent increase.

Despite all that volume of product, the data that goes into upfront selection paired with the smaller initial order sizes means that Revolve sells 70 percent of its merchandise at full retail price.

The part of its business — and the use of its proprietary technology — the firm is most known for is in how it leverages its army of more than 2,500 social media influencers who drive the firm's marketing efforts.

“We believe that much of the growth in our customer base to date has originated from social media and influencer-driven marketing strategy,” the SEC filing reads. “If we are not able to develop and maintain positive relationships with our network of over 2,500 of influencers, our ability to promote and maintain awareness of our sites and brands and leverage social media platforms to drive visits to our sites may be adversely affected.”

All brands as of 2018 try to recruit and unleash popular social media influencers on their brand’s behalf, but Revolve's avid courtship with influencers is both much deeper and longer-running than the industry norm. The firm has been sending free clothes to fashion bloggers since 2009, and its efforts to win and woo social media scions large and small also include events and parties populated with social-media personalities. And influencers travel globally on Revolve's dime, some they can look fabulous while doing fantastic things in the world’s most beautiful locations, while photo-documenting and sharing with their millions upon millions of fashion-enthused followers. Expensive? Yes. Worth it to Revolve? Absolutely, because as far as Revolve is concerned, the best way to a consumer's heart is through an established connection with a trusted source, no contest.

“Influencers have an outsized impact on the purchasing behaviors of next-generation consumers,” the filing states — before noting that three of its top influencers have individually more followers than Vogue has print readers per month.

The brand mentioned influencers over 79 times over the course of its IPO filing, and Revolve is absolutely certain that, public or private, its future is in influencers — and in working with them to not only stay fully connected to its customer base, but to continue to grow and redefine what that base is.

“Our business depends on our ability to maintain a strong community of brands, engaged customers and influencers … We intend to leverage the global reach of the REVOLVE brand and our influencer network to accelerate growth outside of the United States,” the firm declared. “We intend to increase our investment in Europe, Canada, Australia and, over the longer term, broader Asia Pacific, to bring the full power of our platform to consumers globally. In addition, we intend to expand the global footprint of our influencer network to better connect with customers outside our core U.S. market.”




The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.