Like to Know It: Monetizing personal shopping on Instagram

By leveraging existing talent and content, Like to Know It has generated millions of dollars in sales for themselves, bloggers, and retailers.

Like to Know It, the monetization arm of rewardStyle which generated $280M in sales in 2014, solves challenges for both the blogger and the consumer: it enables fashion bloggers to extract value from content creation and allows consumers to quickly and easily access links to clothing featured in Instagram posts. [4] In this post, I will outline ways in which the alignment of the business model and the operating model enables success for rewardStyle.

Business Model

The business model of Like to Know It is based on stewarding three key relationships: (1) allow fashion bloggers to show styles to consumers in an attractive and user friendly way, (2) partner with leading designer brands to negotiate pay-per-click rates for consumers viewing and purchasing content from the fashion blogger’s link, and (3) connect consumers directly to the designer’s website from fashion blogger posts.

The basic premise of the service, as outlined in the photo below, is that consumers register on Like to Know It with their email address and Instagram account information. When the consumer likes a photo from a blogger vetted by Like to Know It, they receive an email with information on where to purchase each item in the photo. Each time a link is converted to a sale on the retailer’s site, both the blogger and rewardStyle receive a commission fee.

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Fashion blogger Damsel in Dior shows how consumers interact with her Like to Know It content. [2]

sample

Sample Like to Know It post from blogger Cella Jane. [6]

 

Operating Model

Like to Know It leverages existing fashion bloggers on Instagram to create value for themselves, bloggers, and retailers with very little administrative and marketing costs.

  • Network Effects: Like to Know It is able to advertise its service to consumers and bloggers through relationships with top fashion bloggers and retailers. Through seeing this connection, consumers and fashion bloggers register for the service and the network of users grows. Since Like to Know It was a first mover in this space, they were able to leverage the benefits of network effects; however, it would be difficult for competitors to replicate with a similar service.
  • Workforce Flexibility: Like to Know It partners with fashion bloggers to assist with monetizing their content creation but they do not directly employ the bloggers. Bloggers can post as much or as little as they like with no direct implication on rewardStyle.
  • Talent Management: Like to Know It has a rigorous vetting process for fashion bloggers to be accepted into their program. In order to be featured, followership of both a blog and an Instagram profile must be proven and content must be deemed attractive. Since membership is seen as prestigious in the fashion community, it lends legitimacy to the service.
  • Retailer Relationships: Like to Know It has proven its ability to create enormous value for retailers through partnerships with leading fashion bloggers on Instagram. This component of the operating model protects Like to Know It from a competitive standpoint as these relationships would be very difficult to replicate in mass.

Business Model and Operating Model Alignment

The Like to Know It business and operating models align to create an asset and fixed cost light operating model that leverages relationships with bloggers, consumers, and retailers to form a successful business. By simplifying a one-time complex web of players in the internet fashion world, Like to Know It has been able to create enormous value for themselves, fashion bloggers, and retailers. Many successful fashion bloggers, such as Man Repeller and the Blonde Salad, are earning upwards of $80k per month through affiliate sales on Like to Know It and rewardStyle generated $280M in sales in 2014. [4,5]

Sources

[1] http://theeverygirl.com/feature/amber-venz-of-rewardstyle

[2] http://damselindior.com/instagramshop/

[3] http://www.businessnewsdaily.com/7756-online-shopping-preferences.html

[4] http://about.rewardstyle.com/

[5] http://www.fastcodesign.com/3032096/how-top-style-bloggers-are-earning-1-million-a-year

[6] http://www.cellajane.com/2015/02/like-to-know-it.html

4 thoughts on “Like to Know It: Monetizing personal shopping on Instagram

  1. Great Post! I didn’t know this existed out there in the world. On initial glance it seems very focused towards women’s fashion. I wonder if there is any interest on the men’s fashion scene for something similar? On a similar thread though, I wonder if this could be used to help guys find gifts for their significant other.

  2. Definitely an interesting business! My main concern relates to the network effect portion, I can definitely see the impetus for fashion bloggers and designer brands to register, but it seems like it could be asking too much of many consumers. Fashion bloggers on Instagram often include the brands featured in an image in their comment on the picture, I’m worried that this is convenient enough for people who may be interested in buying something from only 1-in-10 or 1-in-20 images that they like (and in fact an email for every liked photo could quickly become annoying if you’re an Instragram power user). Would be interested to see how their consumer base has grown since launch!

  3. It’s interesting to see how LTK thinks about compensating its bloggers. They have an extensive in-house staff used to vet bloggers (as you reference), but they could potentially start to automate this since so much of this analysis can be automated. The second thing I find interesting about the blogger management is the ‘development’ piece of it. This article points out some interesting strategies – like helping bloggers identify their budgetary sweet spot and encouraging them stay within a certain price zone to maintain followers and increase likes (and therefore dollar – http://www.texasmonthly.com/articles/the-click-clique/.

    Additionally – they have the benefit of being first mover, but how will they have to change their model as more competitors are entering the space and as retailers are implementing their own technology to do this? What if they are undercut on cost (as has happened in other industries)? What if retailers start to block them out?

  4. Hi Ashley,
    Very interesting post! How do you think Like to Know It will continue to sustain its growth? I can see why they would show a very fast user uptick at the beginning, but likely taper off as they begin to saturate the “influential Instagrammer” market since their partnership standards are so high.

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