ShoeDazzle Hoping to Woo Back Customers With New Subscription Offer

A year ago, ShoeDazzle stopped offering its subscription service, hoping to encourage a much broader audience of women to buy shoes on its site.

shoedazzleBut next month, the Los Angeles-based company plans to relaunch subscriptions, hoping to bring back customers who stopped visiting on a regular basis without the monthly obligation.

The change is one of many taking place at the company since CEO Bill Strauss was replaced by its founder, Brian Lee, three months ago.

Lee calls the new subscription offer “Amazon Prime with a twist.”

The old deal cost $40 a month to receive a new pair of pumps, wedges or heels based on your likes and preferences. The new deal costs only $9.95 a month and can be used like a credit that can be applied toward the purchase of a pair of shoes.

The ShoeDazzle-branded shoes will continue to cost only $40, but the company will also start selling name-brand shoes for up to $80, providing a wide variety of styles to choose from. The credit can accumulate for up to 12 months, allowing women to apply multiple months of credit toward one pair of shoes.

Lee said the program is designed to increase loyalty. If someone already has $10 to spend on the site, they will find more reasons to return on a regular basis. (Its closest competitor, JustFab, is still charging $40 for its shoe subscription.)

Since launching a beta program a couple of weeks ago, Lee said, they already have 12,000 people signed up and thousands more on the wait list. The members already have increased visits to the site by 12 percent and have a 30 percent higher buy rate.

When ShoeDazzle discontinued its subscription service a year ago, Lee said it was successful in opening up the site to more buyers, but more importantly, they lost engagement.

As part of re-engaging its fan base, Lee has also hired designer and stylist Rachel Zoe as chief stylist, the company’s second celebrity spokesperson. ShoeDazzle was founded, in part, by Kim Kardashian.

The celebrity angle is one that Lee has tapped multiple times. He is also the CEO at The Honest Company, a monthly subscription service he co-founded with actress Jessica Alba that delivers eco-friendly diapers, wipes, skin care and cleaning products to your home.

A new subscription offering and a new celebrity aren’t the only changes Lee has made since rejoining ShoeDazzle. In October, he laid off 22 of the company’s 240 employees and cut back on other verticals the company was getting into like swimwear, lingerie and handbags.

He also relaunched the site, adding two new features that are designed to give customers reasons to return on a daily basis. Rachel Zoe’s Edit gives fashion advice to shoppers, and the Daily Fix introduces a new pair of shoes everyday.

Despite all the changes, Lee said the company recorded $100 million in revenue in 2012, an 80 percent increase over the year earlier. He expects the company to be cash-flow positive by the end of the year.

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