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Influencer fashion pioneer Revolve just surged 89% on IPO day

By December 7, 2019August 22nd, 2022No Comments

Influencer fashion pioneer Revolve just surged 89% on IPO day

FOMO = The competitive advantage… Founded in ’03, Revolve pioneered influencer marketing as social media became a thing. Now the fashion company that finds buyers with hashtags had the 2nd best IPO of 2019 — Its shares nearly doubled on its first day of trading on Friday. Revolve knows our generation’s not watching TV or reading magazines, so it meets you on Instagram (where the eyeballs are).

  • It sells clothes under 21 of its own brands and hundreds of others, marketing them through its 3,500 influencers’ social media accounts.
  • And it gives them no-filter-needed venues to pose for — Revolve throws100s of Coachella-fied #RevolveAroundTheWorldTrips events annually to get the floral-print tankinis in your feed.

Not just beautiful people with millions of followers… Revolve tracks fashion styles based on what’s getting clicked, shared, and bought by its 3M+ Insta followers — Then its algorithm detects patterns from the data to determine if sequins are in or wrap dresses are out.

  • The Goal: “Constant newness” — Revolves adds 1,000 new styles/week based on what its learning (fast) from its trends-tracking algorithm.
  • The Purpose: “Less inventory risk” — Since Revolve better predicts what the insta-scrollers will want, it has fewer misses and keeps unwanted inventory low.
  • The Result: 79% of Revolve’s clothes were sold at full price, helping nail a $31M profit look last year.

Revolve’s greatest strength is its greatest weakness… It expects Insta to remain the home of fashion discovery – But a single tweak to how the social network works could cut off its main sales channel. We’ve seen this before — Online publishers or even Zynga’s mobile games have been hurt badly because of a Facebook algorithm change. Now social media regulation could mess with Revolve’s marketing mojo, too.