{"id":2847,"date":"2015-11-23T00:32:15","date_gmt":"2015-11-23T05:32:15","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/the-data-analysts-have-taken-over-the-fashion-website-lyst-com\/"},"modified":"2015-11-23T00:32:15","modified_gmt":"2015-11-23T05:32:15","slug":"the-data-analysts-have-taken-over-the-fashion-website-lyst-com","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/the-data-analysts-have-taken-over-the-fashion-website-lyst-com\/","title":{"rendered":"The data anaLYSTs have taken over the fashion website \u2013 Lyst.com"},"content":{"rendered":"

Overview<\/strong><\/p>\n

Lyst is a social curation and commerce site founded in 2010 by Chris Morton (CEO and a former VC), Devon Hunt (currently a partner at Founder Centric) and Sebastjan Trepca (CTO and a software engineer). Lyst\u2019s app and website allow people to browse and purchase products from over 9000 designers and 2000 stores and create wishlists of items. The company drives sales through a highly data-driven approach, generating personalized recommendations for users based on their preferences, shopping history, and customer profile. The company also uses data insights to create \u2018lysts\u2019 to help users discover and shop current trends. As of November 2015, Lyst has 40 million customers, over 2 million unique visitors per month, sales of $150 million and an inventory of 3 million pieces.<\/p>\n

Operating Model <\/strong><\/p>\n

Lyst\u2019s founders were inspired by Spotify and sought to aggregate and personalize fashion products similar to how the music streaming service does with songs. The company sees itself first and foremost as a technology firm and in 2014, 50% of Lyst\u2019s employees were data scientists. Its operating model is designed to use data analytics to design a superior customer experience and thereby increase sales.<\/p>\n

\u201cWe have 3 million products on our site, 40 million annual shoppers, we generate hundreds of millions of dollars in sales but we don\u2019t ever touch any products,\u201d said Joanna Christie, head of brand and communications at Lyst. \u201cWe are a data company \u2013 we crunch 4.5 million data points every hour. That gives us a huge amount of insight.\u201d<\/p>\n

Value Creation<\/strong><\/p>\n

Lyst creates value for consumers by aggregating products from 1000s of different brands and stores and generating personalized recommendations for each user. In doing so, it provides consumers with an easier, less noisy buying experience. Typically, online shoppers visit multiple e-commerce websites from big department stores to small boutiques and scan pages of products in the hopes of finding something they like, maybe copy-pasting links into a Word document for reference and to compare features and prices. Instead, Lyst users receive curated recommendations based on their style profile and can browse 1000s of products from different e-commerce retailers on a single site. And, importantly, using Lyst\u2019s universal shopping basket, they can buy items directly from the retailer without leaving the Lyst website.<\/p>\n

Lyst creates value for retailers by sharing with them the platform\u2019s wealth of data insights. Lyst\u2019s leading team of data scientists break down the consumer data and share it with sellers in an organized fashion \u2013 a key reason why leading retailers are keen to partner with the site. Retailers can use information about their own brand to predict demand and better understand their customers\u2019 buying patterns, but they can get similar information from their own e-commerce sites. Lyst tracks and shares consumer data across brands, which offers retailers something new. For example, Lyst knows that red clothes have the highest return rate of all colors as do purchases made on a Monday versus any other day of the week. The company has a blog post <\/a>comparing New York and London buying patterns here and just launched a tongue-in-cheek ad campaign<\/a> that highlights its data-driven business model. Lyst also recently released an infographic showing popular purchases by New York City neighborhood:<\/p>\n

\"No<\/a>
No surprise, Williamsburg prefers flannel<\/figcaption><\/figure>\n

 <\/p>\n

Value Capture<\/strong><\/p>\n

Lyst makes money from affiliate links, i.e. a commission from retailers for sales made via Lyst.com. Around 2012, the company analyzed its data and found that when it directed shoppers to a brand\u2019s website to make a purchase, users often abandoned their shopping cart out of boredom or frustration. According to Founder and CEO Morton, the quality of a partner\u2019s checkout experience could result in as much as a 10% difference in conversion rates. As a result, Lyst built a \u2018universal shopping cart\u2019 so customers could purchase items from multiple brands in a single order without leaving the site. This required complex back end engineering to sync checkout processes and inventory levels. Morton says that the streamlined checkout has increased conversion by over 200% for some brands.<\/p>\n

Interestingly, Lyst has chosen to give away its data analytics and integrate its platform with retailers\u2019 for free, likely part of the company\u2019s strategy to scale its two-sided platform and grow internationally.<\/p>\n

Looking ahead <\/strong><\/p>\n

Lyst is an impressive, emerging e-commerce player with 300% year-on-year sales growth in the past three years. It is currently ahead of social curation and commerce peers like Polyvore, Keep, and Spring because of its technological and analytical prowess and resulting superior user experience. Its universal shopping cart is a major competitive advantage. However, two major challenges could derail Lyst\u2019s promising trajectory:<\/p>\n

Instagram and Pinterest enter shoppable curation:<\/u> Both social media giants recently launched shoppable pins and posts, and now compete directly with social commerce sites like Lyst. While Lyst\u2019s shopper experience is likely superior, both tech giants have the advantage of their enormous user bases to mine data insights and drive revenue \u2013 even with a lower conversion rate, they can win on volume. Lyst\u2019s ability to attract new users and retain existing ones is likely to be challenged as a result.<\/p>\n

Universal shopping cart \u2013 winner takes all:<\/u> Lyst has created a best-in-class universal shopping cart for its site. In the future, it is likely that one white-label shopping cart will emerge as the standard across all e-commerce sites. Social platforms with huge user bases, e.g. Facebook or Pinterest, a financial software firm, e.g. PayPal or Apple Pay, or a large e-commerce platform, e.g. Amazon, could all enter this space and threaten Lyst, even as Morton explores a white-label product.<\/p>\n

I think Lyst\u2019s focused, UX-driven approach stands a fighting\u00a0chance. As you ponder the future of e-commerce, check out this awesome visualization of Lyst data here.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Lyst is a data- and analytics-driven business that offers users an easier, streamlined way to discover and shop 1000s of products and provides retailers with a wealth of customer insights – and a better conversion rate.<\/p>\n","protected":false},"author":161,"featured_media":2848,"comment_status":"open","ping_status":"closed","template":"","categories":[947,776,198,663,649,1039,1040],"class_list":["post-2847","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-consumer-data","category-data-analytics","category-disruption","category-e-commerce","category-social","category-social-commerce","category-social-curation"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/data-driven-value-creation-value-capture-and-operating-models\/","yoast_head":"\nThe data anaLYSTs have taken over the fashion website \u2013 Lyst.com - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/the-data-analysts-have-taken-over-the-fashion-website-lyst-com\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The data anaLYSTs have taken over the fashion website \u2013 Lyst.com - 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