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

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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.

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