Revolve was founded in 2003 by Michael Mente and Mike Karanikolas with the goal of creating a multi-brand fashion shopping platform for young and fashionable consumers around the world.
Founding Background
Michael Mente and Mike Karanikolas have no fashion experience and are majoring in business management and computer engineering respectively.
Michael Mente graduated from the University of Southern California with a degree in business administration. After dropping out of the USC entrepreneurship program, he joined a local software startup in Los Angeles, where he met Mike Karanikolas, who was in charge of the company's data work and graduated from Virginia Tech with a degree in computer engineering.
When the company was first founded, it had a clear positioning. Its target consumer group was the REVOLVE Girl of the Millennials and Generation Z. It only did business with fashionable girls, provided visual trendy clothing, and was committed to building an e-commerce website covering as many fashion brands as possible.
About Revolve
Revolve owns the eponymous website Revolve and luxury e-commerce Forward. Revolve contributes 83% of the company's sales, and the remaining 17% of sales come from Forward. In March 2019, Revolve launched a new affordable website Superdown, targeting Generation Z (born after 2000) consumers, and improving the company's high, medium and low-end product line layout.
Revolve offers nearly 50,000 styles from men’s and women’s fashion brands including Lovers + Friends, GRLFRND, LPA, Tularosa and RAYE, and is sold in more than 150 countries and regions around the world.
Basic structure
1. Business Structure
Revolve.com contributed 83% of the company's sales; the high-end Forward contributed 17% of the company's sales; the newly launched Superdown, which is positioned at the relatively low end, did not contribute to the data.
2. Market composition
In 2017 and 2018 and the three months ended March 31, 2018 and 2019, the Company delivered net sales of US$75.0 million, US$89.4 million, US$22.1 million and US$21.9 million to international (overseas) customers, respectively, accounting for 18.8%, 17.9%, 19.5% and 16.0% of total net sales, respectively. In addition to expanding the global footprint of influencers, the Company also plans to focus on Europe, Australia, Canada and the Asia-Pacific region in the long term, and gradually increase the level of investment in international market expansion.
3. Own brands and external brands
Since acquiring Alliance in 2014 and introducing three private brands, Revolve now has 21 private brands, each with a unique selling point, supported by independent marketing investment, and produced in China, India and Los Angeles, USA. Among the top ten brands sold on the website, private brands account for eight.
4. Discount Level
In 2017, 75% of Revolve's sales came from full-price products. In 2018, this proportion rose to about 79%. This data can be interpreted in two ways. One is that Revolve's products do meet consumer aesthetics and popular trends, which can prove the effectiveness of the company's algorithm; the other is that the company operates in a conservative sales-driven production model, and even does not rule out the use of hunger marketing to create gimmicks. Small batches of a single model can indeed increase the full-price sales ratio, but the company's profit level is not necessarily in the best range of the price and sales curve.
5. Customer acquisition and customer value
The prospectus provides a detailed analysis of customer acquisition costs (CAC) and customer lifetime value (LTV). CAC includes all brand and marketing expenses and marketing team costs, which is calculated by dividing the total cost by the number of customers who placed their first order during the period.
Business Model
The most prominent feature of Revolve is Influencer Marketing, which is generally called Internet celebrity marketing in China. The word "Internet celebrity" is mentioned 79 times in Revolve's prospectus.
Revolve's basic business model is as follows:
1. On the platform side:
So far, Revolve has three e-commerce platforms: Forward, which is positioned at the high end, Superdown, which is positioned at the relatively low end, and the main platform Revolve. The platform supports 7 languages, can be delivered to more than 150 countries around the world, supports payment in more than 50 currencies, and has a daily order volume of about 10,000.
2. On the product side:
Revolve Group has 21 private brands, Revolve.COM covers more than 850 emerging and mature brands, and Forward covers more than 250 brands, many of which are niche brands that consumers can hardly find in other department stores or e-commerce. Revolve Group has launched more than 45,000 SKUs, covering shoes, clothing, beauty and accessories. Currently, more than 1,000 new models can be launched every week.
3. On the marketing resource side:
First of all, there are its own fan resources. For example, the number of fans of Revolve's official account on eight mainstream social media platforms such as Instagram and Facebook has exceeded 2.8 million, of which Instagram has 1.9 million fans and Facebook has 500,000 fans. On the external influencer side, Revolve has linked to more than 3,500 influencers around the world.
4. From the user's perspective:
Revolve's official website receives approximately 18 million visits per month worldwide; in the first three months of 2019, it generated an average of 9.8 million unique visitors per month.
5. On the Internet technology side:
To improve the supply chain of traditional retail goods, Revolve developed a new platform to manage the business, focusing on automated inventory management, pricing and trend forecasting.
6. On the infrastructure side:
Revolve pays great attention to the construction of logistics infrastructure. As of March 31, 2019, the company has leased six fulfillment centers covering more than 390,000 square feet, supported by approximately 477 full-time employees, and has basically merged all fulfillment activities into its own logistics centers.
Revolve goes public
On June 7, 2019, Revolve, an American fashion e-commerce company known for its influencer marketing, was listed on the New York Stock Exchange with the stock code "RVLV". Revolve raised more than $200 million. Revolve's issue price was $18, and based on the issue price, Revolve's market value reached $1.23 billion. Revolve's opening price was $25.27, up 40.3% from the issue price, with a market value of approximately $1.8 billion. Since then, Revolve's stock price has further increased, and by the close of trading it had risen by 88.89%, with a market value of $2.33 billion.
Development History
- In 2003, the company was founded.
-In 2008, the official website platform was officially opened to the world.
-In 2009, we established the first blogger collaboration and started influencer marketing.
-In 2012, FORWARD by Elyse Walker was relaunched as a high-end brand.
-In 2013, the first #REVOLVE around the world event was held, in which the brand traveled around the world with top influencers for street photography, and began to collaborate with influencers to launch joint capsule series.
-In 2014, the company made its first acquisition (Alliance Apparel), introducing three fashion brands under Alliance: Lovers+ Friends, NBD and Tularosa, and launched its own brand business after vertical integration.
-In 2015, the first #REVOLVE festival was held.
-In 2016, REVOLVE Social Club was established. KOLs who join the club can enjoy the private shopping service provided by REVOLVE and can regularly participate in fashion parties and events organized by REVOLVE.
-In 2016, the Chinese version of FORWARD by Elyse Walker was launched, and now it has more than 300 brands. Currently, China has become the company's second largest market.
-In April 2016, the first physical store opened in Hollywood.
-In December 2016, the Revolve Beauty product line was launched, which now covers more than 225 skin care, cosmetics and hair care brands.
-In 2017, the first #REVOLVE Awards event was held.
-In 2018, we launched localized customer experiences in Europe (UK) and Australia, providing quotes that include regional taxes and duties, improving distribution and fulfillment systems, and simplifying the ordering and returns process.
-In March 2019, Superdown, an affordable clothing website, was launched, targeting Generation Z consumers.
-In May 2019, Revolve launched the brand Song of styles with long-term internet celebrity Aimee Song. This is Revolve’s first fashion brand launched in collaboration with KOL. The design work was completed jointly by Alliance Apparel, a subsidiary of Revolve, and Aimee Song.
