Fashion Jewelry Digitally-Native Baublebar Nixes Its Own Stores For Retail And Licensing Partnerships
The clicks-to-bricks strategy has become a rite of passage for hot digitally-native brands. After reaching a threshold of growth via direct-to-consumer channels, many brands, like Warby Parker, Bonobos, Allbirds, Glossier and Fabletics, have opened branded stores to keep the momentum going and to reach a new customer base.
That would be the expected playbook for a DTC darling like fashion jewelry brand BaubleBar, but it’s a path that BaubleBar is reluctant to follow.
While it has dipped its toe into three physical retail with pop-ups, including a six-month trial in 2015 at Long Island’s Roosevelt Field mall, BaubleBar founders Daniella Yacobovsky and Amy Jain say, “We have dreams of doing it one day, but nothing in the near term.”
Very simply, it has no need to make the investment required to operate its own stores. It is doing quite nicely combining DTC e-commerce and distribution partnerships with power retail players, like Bloomingdale’s, Neiman Marcus, Nordstrom
Yacobovsky and Jain are exceptionally shrewd managers of their money and their business. They met while working at UBS then moved on to Harvard Business School where they made the business concept of BaubleBar a class project. With MBAs in hand, they turned down offers to return to investment banking and set up BaubleBar instead in 2011. It became an overnight success.
Early on, the pair turned to venture capital to help grow the business, but after five rounds that raised nearly $50 million through 2017, they haven’t been back since. They didn’t need to after the company became profitable in 2018.
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BaubleBar’s success hinges on targeting a sweet spot in the roughly $325 billion global jewelry market: affordable fashion-statement jewelry priced between cheap costume and high-end fine jewelry.
“We saw that the price points were either sky high or bargain basement, $1,000 or $10,” says Yacobovsky. “You either bought a forever item or a costume piece that looked cheap. There was a gap there.”
BaubleBar believes jewelry should be fun
“We design our jewelry and accessories with the BaubleBar ‘wink,” Jain says. “Our accessories are meant to be a playground to build your unique look every day.”
With affordable prices and a trend-forward fashion perspective, BaubleBar enjoys strong repeat purchases from customers who consider jewelry a means of self-expression.
“Our customers enjoy telling her story through jewelry. Whether it is big statement earrings or necklaces, little character and collectible ‘baubles,’ or accessible fine-jewelry pieces as a foundation in a jewelry wardrobe, we help people celebrate their passions and pastimes,” Yacobovsky shares.
BaubleBar also offers customizable jewelry and accessories, like blankets and cellphone cases, to showcase initials and names. And customers can stack a collection of customized bracelets to communicate a message.
Licenses offer customers new means of self-expression
Intent on bringing more fun to its customers, BaubleBar is expanding its licensing program into sports. It tested the licensing waters first with Disney last year, which was a home run. And as it looked at other pastimes and passions that its customers want to express, BaubleBar hit on sports as its next foray in licensing.
“We are constantly thinking about things people want to wear and found we have a passionate base of sports fans,” Yacobovsky shares. “We started having conversations internally and externally with female fans and found women love dressing up when they go to games or watch games at sports bars or with a group of friends.”
While sports team logo jerseys, t-shirts and sweatshirts are the gameday uniform for sports fans, adding a pair of team earrings and a necklace elevates the look.
“We hear all the time that people stop our customers and ask where they got their earrings,” she laughs. “We felt this was relevant for our customers and fits nicely with our ethos of bringing to life their passions and pastimes.”
BaubleBar started first with the National Basketball Association license and has since expanded into football with the National Football Association.
“We did our research and found nearly half of all football fans are women. It adds joyfulness, playfulness and whimsy to our product line,” she adds.
Finding space at retailers’ jewelry counter
BaubleBar’s joyful, playful and whimsical vibe is what has opened the door at such luxury legacy retailers as Bloomingdale’s, Neiman Marcus, Nordstrom, Selfridge’s and Le Bon Marche. BaubleBar helps round out their jewelry offerings, expands their assortments’ price points and gives a wink to customers who tire of the seriousness of expensive luxury jewelry.
BaubleBar uses its deep data about customer preferences to help craft the assortments for each of its retail partners.
“We are a very SKU-intensive business,” Jain explains. “We use our data from e-commerce to make our product development process smarter and take the subjectivity out. And we have a clear understanding of who our retail partners’ customers are so we can make recommendations to each that is a proven seller.”
At the mass-market level, BaubleBar teamed with Target in an exclusive Sugarfix by BaubleBar brand that is carried in all 1,800+ Target stores. To keep the assortment fresh, it creates 75 to 100 new styles every six to eight weeks for the line.
While many digital-native brands have shied away from wholesale through established retailers, BaubleBar decided they could learn a few tricks from the biggest and the best.
“There are a lot of benefits for a company like ours that started DTC to have a partner like these large-scale retailers. They take an interest in helping us be better and building the business together,” Jain says, noting that being carried by such well-respected retailers provides additional validation for potential BaubleBar customers who’ve only encountered it online or in social media.
Though BaubleBar doesn’t reveal its sales, the founders shared that a little over half of its business currently comes through its DTC e-commerce platform. They also are proud to report in fiscal 2021, the company achieved 45% year-over-year growth. In particular, its statement earrings and necklaces were big sellers during the pandemic for customers to dress-up for all those virtual Zoom meetings.
And the company expects to achieve another 50% growth in 2022, as sales of its licensed collections pick up steam. Its licensed division is projected to represent at least 10% of revenue in fiscal 2022.
Regarding BaubleBar’s future plans in clicks-to-brick expansion, the company is bidding its time.
“While we have been expanding into new categories, like fine jewelry, home and tech accessories and now licensing, we are very cautious about being really buttoned up,” Jain says.
“Our popup shop tests were successful and gave us confidence around the economics of opening standalone BaubleBar retail stores, but we’ve prioritized other growth initiatives. Over the years we’ve learned a lot from our large scale partnerships about the importance of just executing. Until we have headspace to be able to take it on and develop processes to execute perfection at retail, we are going to wait,” she concludes.