Trunk Club – Retention and Referra

Trunk Club is an online shopping service targeting affluent male professionals. The firm taps into the idea that many men care about how they dress, and are willing to spend a fair amount to do so, but loath the process of shopping in person. Customers sign up for Trunk Club, free of initial charge or ongoing membership fee, by filling out an online questionnaire detailing height, weight, shoe size, and fashion preferences. At that point, the customer is assigned a live, personal stylist, whom they can contact by phone, email, or live chat. The stylist will utilize their preferences to build a cohesive and personal selection of clothing, which is delivered periodically, once a month or every other month, to the customer’s home in a stylish trunk. The customer only keeps the clothing he likes and can return the rest free of charge. Thus far, customers usually keep around $500 of the $1,500 of merchandise included in a typical offering.

Trunk Club can hope to retain customers through the quality and unique properties of their service. There is no question that a large segment of affluent males will find the prospect of obligation free, online, and personalized shopping appealing. Customer acquisition should be relatively smooth given a clear value proposition. Presumably, customers will remain with Trunk Club so long as they remain satisfied with the personal stylist, selection, and price of clothing. However, there seems real risk of defecting once a wardrobe is filled. Despite the desire to constantly have new clothing, there is a physical, and sometimes financial, limit to what many customers can have in their closets. The model leaves no room for discounting on monthly fees or service charges, and so must rely on discounts to the merchandise itself if it must utilize price points to influence retention.

The referral process will be channeled largely through traditional word of mouth and online social platforms like Twitter, Facebook, Pinterest, and their online blog. Trunk Club also targets women, presumably significant others and spouses, who can set up their shopping-loathing male companions for the service. This generates the prospects of generating referrals through a secondary segment. Referral will probably be much less of a problem for Trunk Club than retention; the costs of replacing a customer may be relatively hefty given the significant investment of stylist time and expertise spent learning individual tastes and preferences.

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