When Sandra Makarem was working in the buying department at Bloomingdale’s, she began to see a discrepancy between shoppers’ and retailers’ behavior.
“I was noticing that consumer behavior was changing rapidly, and I didn’t feel that the industry was adapting fast enough,” said Makarem. “At the time, there were a lot of technology-driven companies that were addressing these challenges in the consumer goods business. Stitch Fix was around, and it was really impressive for me to see how much gains they were making in the market, in such a short period of time. I knew I wanted to be a part of the solution. So I launched The Collective Child, because I wanted to build something that I felt was the future of the retail industry and the evolution of multibrand retailers.”
The Collective Child’s model is similar to that of other clothing subscription companies: Subscribers share their preferences, they receive a curated selection of items to suit their needs, and then they keep what they want and send back what they don’t. What makes The Collective Child unique is that it targets a very specific audience: moms wanting to buy luxury children’s clothes.
On this week’s episode of The Glossy Podcast, Hilary Milnes sits down with The Collective Child’s founder and CEO Sandra Makarem to discuss why she wanted to create a product for high-end moms, how important a unique curation is for a subscription business and how she grew a waitlist of 1,500 people without any paid marketing. Edited highlights below.
Creating a subscription for moms
“When we started, obviously the subscription model already existed. They were talking to women and they were talking to men, as well, but no one was talking to moms. The value proposition of this particular model is that it’s a time saver, and who needs more time than moms? So I felt incredibly passionate about talking to this consumer segment. I was working with all of these working mothers, and I knew what that balance entailed. In looking at who the working mother is today, she’s very different from any other generation. She not only values time — obviously all millennials value time — but she’s willing to spend on the quality of clothes for her kids. She really cares about the quality, so this model was not only time-saving, but it also provided her access to feel the garments, which is really important and something that e-commerce doesn’t necessarily do.”
Efficiency vs. editorialization
“When I first launched the company, I was really angling on the efficiency. That was really the most important thing I thought I was going to contribute to this customer segment. What I found, however, was that she’s really using us for brand discovery. That was really exciting for me, because when you think of what the brand discovery process is today, you’re scouring the internet reading blogs and following influencers. What that influencer is actually doing is curating a selection of brands and making suggestions. What I didn’t understand at the time, that I understand now, is that we’re an extension of that relationship. We are getting to know our members and curating a catalog of brands according to her preferences.”
Growing a business without paid marketing
“What’s been exciting for us is that 100% of our growth has been organic, which speaks to the product-market fit of the model. The real focus for us was that we were providing the best quality of service to our membership base, and that had positive results because all of our growth was coming through referrals. It became this unintentional win that came from building that relationship and getting more share of that customer’s wallet. This year was the first year we really started to test what our customer acquisition cost is, especially as we’re thinking of scaling the company — it’s really important for us to understand what those levels are. Prior to that, we had actually garnered a 1,500-member waitlist.”