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Forever21 invests in Daily Look

By Kristopher Fraser

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Forever 21 is now part of an 8 million dollar investment deal with Los Angeles-based apparel subscription service DailyLook. Forever 21 is leading the deal, but is also working with venture capital firm Upfront. Upfront was previously part of an earlier round of funding for DailyLook.

Forever 21 president Alex Ok will be joining DailyLook's board of directors, as reported by The New York Times. The deal came as a surprise to many in the industry given that Forever 21 is a fast-fashion retailer and DailyLook has more premium offerings. However, the business move stands to help Forever 21 with it's bid for younger consumers and to gain sales data from DailyLook.

"Rather than building a subscription program from ‘scratch,’ Forever 21 continues to invest in this startup as a way to learn about subscription, leverage data for its stores and fuel retail customers into a model that creates an ongoing annuity business model," said Jim Fosina, founder and CEO of Fosina Marketing Group, to Retail Dive. "By leveraging subscription-based data into its retail customer profile, the brand can adjust its in-store inventory and also encourage the multi-channel customer to augment subscription shipments with relevant in-store offerings."

The one challenge both companies can expect is customer retention. 40 percent of people tend to cancel subscription based offerings of any kind.

"Brands like DailyLook and Forever 21 must build strong and ongoing relationships with their customers via subscription and direct-to-consumer touchpoints — it is not a matter of ‘building the program’ and putting it on autopilot," Fosina said to Retail Dive. "Stylists need to have personal shopper connections to their customers in order to build retention. Time will tell as to whether DailyLook can scale in order to manage the Forever 21 influx of customers."

Forever 21