She Wears it Well
Martha Michelson, co-founder of shopbop.com, helms a huge business as creative director of a worldwide fashion e-tailer—all based in Madison
The Rimrock Road exit on the Beltline isn’t known for much; a driver might turn off to go downtown, or to the Alliant Energy Center for a concert, or to bowl a few games at Badger Bowl down the street. Assorted warehouses and a car dealership dot the frontage road, the latter in the hopes of enticing drivers to stop and shop. And tucked in the middle of all the normal hustle and bustle is something quite remarkable, something that most Madisonians don’t even know exists. The world’s fourteenth largest apparel e-commerce website (according to alexa.com), shopbop, is headquartered off of this same exit. Today, shopbop is twice as large as it was in 2007, and in two years, they expect to be twice the size they are today.
Walking through the cavernous space of one of the company’s two warehouses—one holds accessories and shoes; the other, clothing—it’s mind-boggling to grasp the size of their operations. Rows upon rows of metal shelving are numbered cryptically, tables are scattered with website orders, employees mill about in jeans and T-shirts, and machines stand at the ready to transport pallets of boxes.
You almost expect to see boxes of washers and industrial tubing, until you walk through the aisles and steal glimpses of Tory Burch shoes, Diane von Furstenberg handbags and bins piled with expensive costume jewelry, their beauty obscured by plastic wrapping and unpleasant fluorescent lighting. It’s like pairing Crocs with a cocktail dress.
The warehouse is also home to Martha Michelson, co-founder of shopbop. Yes, you can tell she’s a “fashion person”—her sleek corner office sports vintage Vogue photographs, a box of costume jewelry she ordered from the website sits out, and stacks of fashion mags cover the coffee table—but she’s refreshingly natural and down-to-earth.
Now forty, Michelson has helmed shopbop for ten (eleven if you count the downtown storefront, which opened a year earlier) wildly successful years that saw an Amazon buyout in 2006. And she’s still just as actively involved as when she personally took customer service questions over the phone. “Luckily I still have my hand in designing the user experience of the website and new website features. And, as always, I have an open-door policy for anyone in the business to come talk about concerns and new ideas.”
How did someone who grew up in Dixon and Rockford in northern Illinois, a far cry from the designer showrooms and glitzy fashion publishing world of New York City, find herself in control of one of the world’s largest e-tailers (larger than Bluefly, Old Navy, Ralph Lauren, Coach, L.L. Bean and more)? We decided to find out just what the secret was to her (very well-heeled) success.
How did your background prepare you for founding shopbop.com?
I received my degree in graphic design from Iowa State University, and I was very intrigued by how art and design fit in
business. So I spent seven years as a graphic designer with Planet Design Company, which is now Planet Propaganda, a boutique design firm serving local and national clients. I’d worked on a wide variety of projects, from branding and logo design to sales kits and billboards, and then started doing some website design.
How did the idea of bop come to fruition?
Bob Lamey had the idea for the business. I met Bob when he had opened Active Endeavors, an outdoor retail store in Madison. His background was in futures trading, but he was, and still is, the ultimate shopper and loves fashion and clothing. As our friendship developed, I recognized Bob’s entrepreneurial spirit in how he looked to continually improve upon his business. He recognized the needs Madison had for a fashion boutique to serve its college market. He also saw this need replicating itself across the country (consumers who want the fashions/trends/brands they see in fashion magazines, but there’s no local retailer), hence the web component of the business.
Bob pitched the idea for the business to Ray Zemon, a friend of his and a private investor. He contributed to the financial and analysis side of the business. I came on as the third partner to create the brand (naming, design aesthetic, logo, signage, etc.), handle all of the advertising and marketing, and develop the website. Bob had been talking to me about the idea for months. With his vision, I knew it would take my full-time attention to be successful. I thought, “Should I quit my job?” And Bob was very surprised I’d be willing to do that. But I knew with his vision what it would take to become a successful business, and it was not something I could do on the side, as a little project.
Bob had talked to me about the idea for bop for only six to eight months—it was a very fast process! When we decided to
actually do it, It was June of 1999 and we opened that store in three months, in September 1999. We gutted the space, had to get inventory and at that point, it was still all ideas—there was no inventory anywhere. I was twenty-nine when the store opened.
bop’s original focus was on premium denim. It seems to have evolved greatly from that.
At the time, designer denim was exploding. It was the focus of fashion. Citizens of Humanity, 7 For All Mankind, Earl Jeans and Paper Denim & Cloth were a few of the brands. Premium denim is still important, but it’s not defining today’s fashion. So, just as fashion trends change and evolve, so has our product mix. This spring season, for example, is all about a return to ladylike classicism—Americana, polka dots, stripes and bursts of color. Fall’s strongest trends revolve around an Après-ski theme: shearling jackets, winter white and caramel colors, belted layers and Fairisle knits.
Why did people respond so quickly and positively to the store and later the website?
I think we picked the right clothing, we presented it to the customer in a fun and easy shopping experience, we gave them value by putting brands that they were looking for together in one place and we served the customer well. They got their packages on time, their returns were easy, and we had products they were looking for.
Once you get customers feeling good about their experience, they’ll come back, they’ll tell their friends, you start getting press. It builds upon itself.
What was your first big media mention?
The first was in November 2001 on DailyCandy.com—I still have a printout of it. Ray and Bob both have it framed! We had no idea that we were going to be their pick of the day, and they called us the “editors of what’s cool.” A lot of the department stores will carry the entire line by a designer—but we were very selective in our picks, and that was acknowledged by Daily Candy, and we felt really good about that. They wrote, “shopbop has all the big names and they picked out the best styles from these brands.”
Because our website was posted on a shared server, our host site brought the website down because we were getting too much traffic—it became a big problem that day—but it opened shopbop to a huge new customer base. So that was a big mention.
Another great mention for us was in The Wall Street Journal. I think that was in 2002. They did a story on shopping online for Christmas and they were rating customer service. shopbop got picked as the best customer service for online shopping in this certain category. That was a major validation from a very respectable publication and was a great way to get our name out and justify us as a real player in the market.
What mistakes and/or learning lessons have you experienced along the way?
The biggest lesson I’ve learned is understanding how hard it is to build and sustain a business. It’s not easy. And to remain successful you need to remain nimble and always think about how to make it better.
Of course there are business decisions that I regret and buying decisions I wish we would have made differently, but the most important thing is learning from our mistakes. For example, at one point we tried dabbling in designer collections for kids. We did not know how to buy for it and we did not give it the right marketing attention. Therefore, trying to expand in that market failed for us. But it did teach us that in order to broaden our market or product mix, we needed to understand whom we were buying for, what our objectives were and how to market it.
Both business and fashion change so rapidly. How do you innovate to keep up and ahead?
I think our biggest influences were our “What’s New” section and our lookbooks. Those are two things that we couldn’t really brand as ours, but after we did them, those two areas started popping up on a lot of other sites. And we take that as very complimentary. But it just drove us to think “What can we do now? What’s the next thing? And how can ours remain better?”
The lookbooks are our fashion editorial pieces, telling our customer what we think is cool, showing them how to wear the clothing, how to mix and match it, what are the trends, and how you can add them to your wardrobe. “What’s New” really developed out of this need that our customer has to be presented with new items every day. And that came out of a customer comment back when I was taking all of the calls for the website (laughs). I was on the phone with a customer and she told me she went to our website every day.
It wasn’t like we were shooting new photography and putting it on the website every day—the website only changed every couple weeks! And Bob and Ray said, “If we have people going on the website every day, it should change every day.” And I thought, “Yes, it should, and we need to present those items to the customer.”
As you continued to grow, you received some interest from Amazon.com.
Yes, we sold the business outright to Amazon in February 2006. We were not looking to sell—it was owned by all three of us. But we were at a point where our growth had been so explosive those first years that we had started limiting our growth … As a privately owned company, Bob, Ray and I had decided that we didn’t want to leave the business in any kind of jeopardy or risk too much.
When we got the call from Amazon, we were just floored. They were looking to either start a business of their own or acquire one doing [what we were doing] already. In their research they said we were the “best in breed.” And so we thought, “OK, let’s hear them out.” We recognized the great success Amazon had in their business and their product type in selling books, movies and many other things and their online expertise fascinated us.
At the [same] time we were approached by a couple other big names, which I can’t disclose, but we were wondering, “Why are all of these people popping up?” It may have been we had reached a certain level in retail where you become desirable, and I don’t
really understand that. There’s a group of rankings for online shopping. So, that’s maybe how we got on the radar. I think it was our sales growth [and] how we were servicing the customer that enticed Amazon.
So we heard them out, how they valued our business, and Bob, Ray and I had to decide if we were to sell the business, whose hands would we want this to be in? Because this was our baby and it had grown so much and we really looked at it as this partnership, although we really were giving up authority in the end because it was a full-out sale. So we gave up full ownership. (Editor’s note: Michelson will not disclose the sum of the sale).
[However], Bob was still the CEO; I was still the creative director. Although they owned the business we still to this day act as an independent company and we are a subsidiary of Amazon. We make our own business and creative decisions, but we have to answer to Amazon as to how and why we are making these decisions. We have to work within the salary guidelines that are part of Amazon’s structure. And Amazon was able to help us “grow up” in our business and HR practices.
We do a yearly budget and monthly business reviews with Amazon. Day to day, though, really didn’t change at all. The monthly and annual reviews are the biggest changes since we’ve been acquired. No one looks over and approves any content or website features—that’s all done internally. (Editor’s note: Lamey and Zemon both eventually retired, making Michelson the only founder still with the company).
Why don’t a lot of people know that shopbop is based in Madison?
On the web, it doesn’t matter where you are. Because we don’t have other brick-and-mortar locations, [customers] don’t associate us with a physical store. Madison is serving us well and it’s where we want to be located now. And there hasn’t been any reason for us to move. We always try to look at our home base objectively. Are we able to fulfill our needs through our Madison location? Is there any reason that we should move? And to this point, there hasn’t been any reason. Through our systems, we have now started offering guaranteed three-day shipping internationally. So we can get a package to rural China in three days. Where we’re located is not causing any problems to us servicing the customers.
Since Michelson isn’t known for seeking out press (see sidebar, below) it’s no surprise when asked about her future plans, she’s, well, all business: “For the foreseeable future, my plan is to keep building shopbop.”
Quick Read: Shopper’s Secret
shopbop is notoriously media-shy about the business and financial side of the company. However, Michelson says this isn’t purposeful.
“No, it hasn’t been an objective to be media shy. But, we really focus on the business. I personally worked on the redesign of our website and I was so bogged down with what I was trying to produce for the company that I didn’t have time to take a phone call; it’s one of those things. I don’t think of myself as a PR person—[interviews are] not something I seek out. I’m more in the creative realm. We do give occasional interviews in Women’s Wear Daily and Lucky, and various magazines. But we haven’t done a lot of local PR I know.”
Speaking of PR, Michelson was featured in O, The Oprah Magazine’s “Spring’s Best, Most Wearable Trends” story in the March 2010 issue.
Quick Read: BOP BY THE NUMBERS
6: Stylists on staff. (Free wardrobe advice every day!)
10: Years shopbop.com has been around.
20: Employees who work at the buying office in New York.
50-150: Items added to the website every day, based on the season.
75: Brands the bop storefront sells (“They have a tightly edited collection for the customer,” notes Michelson.)
100s: Lines shopbop is approached about carrying every week.
225: Madison employees, including shopbop’s finance, creative (photographers, stylists, editors, merchandisers, graphic designers), IT, marketing, customer service and warehouse operations.
450: Brands sold on shopbop.com. Best-sellers include Marc by Marc Jacobs, Alice + Olivia, Elizabeth and James, Vince, Juicy Couture, J Brand, 7 for All Mankind and Theory.
Shayna Miller is associate and style editor of Madison Magazine.