Lyst is an example of a matchmaking business model connecting fashion retailers with customers. Fashion products typically consist of clothing and accessory items of different brands. In addition to the catalogue of items, Lyst also provides curated content in terms of fashion blogs, trends and other social media. It uses big data to its advantage by hiring data scientists who work on the analytics aspect of the website and figure out the required metrics like profile of the online users, peak time of order placement, colours being sold hot at the moment etc. This data in turn is passed over to the designers, retailers etc.
Lyst was founded in 2010 by Chris Morton. To date, the total funding amounts to £20.5M by venture capitalists. Though we do not have official financial data, the information from multiple interviews suggest that there has been 400% growth rate year on year 2010 to 2013 and the sales amount to 40 million pounds. The website solves the complex problem of adding 25,000 items per day, and 1.4 million price changes and 15 million item updates a week. The key differentiation between Lyst and other e-commerce sites is that Lyst started investing in big data early on to its advantage and also the aspect of curated content which helps Lyst understand the customer tastes and gives an opportunity to influence them.
CUSTOMERS – WHO THEY ARE:
Lyst serves two sets of customers: fashion retailers and fashion customers.
ENGAGEMENT – VALUE CREATION PROPOSITION:
For retailers, Lyst provides access to a broad base of customers online, along with insights of big data in terms of customer tastes, preferences and the profile of customers.
For retail customers, Lyst provides access to all fashion data as a one stop shop. Each retailer curates the collection of fashion items it makes available through Lyst, which gives retail customers the feeling of browsing a curated fashion collection.
DELIVERY – THE VALUE CHAIN:
Lyst provides a website consisting of a large fashion catalogue and facilitates the customer’s search for clothing and accessories using metrics like colour, designer, inventory age, price range etc. The customer identifies an item of choice and orders through the website. The order is transmitted to the retailer/designer who delivers the product to the customer. Lyst does not hold any inventory.
MONETIZATION – VALUE CAPTURE:
Lyst generates revenue from customers as well as the retailers/designers. The fee for retailers and for customers is a percentage of each transaction.
Written by Sesha Chittarvu and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016
Published 21 April 2016