Sam Sisakhti seems perfectly wired for today's unsettled -- and unsettling -- business climate.
The founder and CEO of the online fashion marketplace UsTrendy Inc., Sisakhti has a high tolerance for risk, an unshakeable belief in the value of technology and a determination to shake up the status quo -- in his case, how fashion designers get their wares to the marketplace.
The story started nine years ago when Sisakhti, fresh out of Brandeis International Business School, quit a finance job he didn't like after four days and headed out to Las Vegas to regroup with friends.
There, a fashion designer friend talked about his struggle to find a market for his creations. Inspired by tech giants like Mark Zuckerberg who used emerging technologies to carve out new businesses and disrupt industries, Sisakhti set out to solve his designer friend's business challenge by building an online shopping site.
"I saw an opportunity to distribute his clothes to people nationally and then maybe around the world," Sisakhti said.
Today, UsTrendy, based in Brookline, Mass., has grown significantly, working with about 20,000 up-and-coming designers from 100 or so countries. Consumers shop the site as they would any other online retailer, with UsTrendy handling orders, payments and customer interactions. The company vets its sellers to ensure they meet its business standards and works on a drop-ship model, taking a 20% commission. It has approximately 50 employees, many working remotely. Technical personnel make up about 30% of its staff. And it's technology -- data analytics, cloud, social media -- that drives the business, Sisakhti said.
Learning the value of technology, pain point by pain point
But the company -- which describes itself as a fashion community selling "independent fashion and boutique clothing" -- didn't start out with the laser focus that's driving its current growth. Sisakhti said that he initially underestimated the value of technology in refining his business model.
"I thought I'd create a storefront and have people upload [product information]. That was initially what it was -- a simple static site," he said. "But we realized we didn't have what we needed, because we're not a regular e-commerce site."
UsTrendy's engineers focused first on building a robust content management system running on Amazon Web Services to manage interactions with its growing list of sellers. They use MySQL for the company's database running on Rackspace servers. And they invested in Zendesk customer service software and support ticket system to handle consumer interactions, which all happen between the customers and UsTrendy -- not the designers directly.
As sales grew, a growing number of customers became frustrated after submitting orders for items that were sold out but had yet to be taken off the UsTrendy site.
So, Sisakhti again had to find a technology solution. His tech team built an inventory management tool that integrated with each individual seller's inventory system. This involved simply a snippet of code that synced inventory counts between UsTrendy and each seller so both sides had an accurate count of available products at all times, Sisakhti said, whether the seller made sales on its own website or through UsTrendy.
"We had a good [technology] team, and the sellers were really willing to let us go into their systems and sandbox," he said about his team's ability to quickly come up with the innovation.
Then, in 2014, UsTrendy invested approximately $1 million into a new, more robust and scalable platform, an investment Sisakhti said was needed to manage all its sellers as the company grew. He said the company needed a better user interface to manage the thousands of vendors who work through the site.
“We leveraged Magento [for its ecommerce platform] at that time, but now we are building a homegrown PHP site, which allows us to make changes on fly and easier rather than always be dealing with trying to adjust the Magento standard code,” he explained, adding that the company plans to launch its new PHP custom site this summer (2017).
UsTrendy's ability to identify pain points and deploy IT solutions is hardly transformative. However, it did lay the groundwork for transformation as the company matured.
SEO, analytics, social media harnessed
Sisakhti said he also soon realized that UsTrendy would have to maximize its reach through search engine optimization to differentiate itself in the marketplace. He saw how he'd have to harness data to create a unique experience for each shopper. And he understood he'd have to leverage other technologies to drive sales.
Case in point: UsTrendy, which captured shopper data from the beginning, capitalized on the crowdsourcing trend fairly early, inviting visitors to vote on what they liked and then using propriety algorithms to identify the styles that would play best to its customers.
UsTrendy also piggybacked on the increasing popularity of social media, finding ways to identify and connect with existing and potential customers, first on Facebook and later on Pinterest, Instagram and Snapchat. The company worked at capitalizing on each platform's strengths -- such as visual presentation on Instagram -- to drive traffic to the site.
Through all these initiatives, UsTrendy was gathering data that would prove critical for its own continuous transformation, Sisakhti said.
"When we were getting lower numbers of engagement visitors, we weren't making big business decisions, but we'd use the data for little decisions. We might move up an item if customers liked it, so it's on Page 4 instead of Page 7," he said. "You can always use data no matter how small it is -- just mitigate how much of an impact it has on strategy."
Ongoing business model transformation, fueled by data
As the volume of data grew, the UsTrendy team used it to shape more critical strategic decisions, Sisakhti said, such as deciding to drop men's clothing from the site and then to focus specifically on young women.
Sisakhti leaned heavily on Google Analytics in the company's early stages. Without Google's web analytics, "we wouldn't be where we are," Sisakhti said.
"We'd still be doing customer segmentation, going after men and women. And, initially, I wanted to go after business professionals. But when we looked at all the data, we saw they were leaving the site right away. So, we changed the look of the website to make it more appealing and to make it even more friendly to users -- and that drove more and more engagement," he said.
Sisakhti said the company uses data analytics today to automate the recommendations it makes to site visitors, a strategy typical among online retailers. But even here, UsTrendy is evolving that functionality.
Later this year, UsTrendy plans to launch an app that, like the Tinder dating app, lets shoppers swipe right and left to indicate their likes and dislikes. The company will use the app along with other shopper data to create a personalized experience for each user.
For Sisakhti, it further solidifies his belief in the value of technology and the integral role it plays in determining UsTrendy's path.
"Never assume that technology can't do something and never underestimate the importance of the technology. I went into this thinking I was [building] a fashion company, but the technology is really the foundation you build everything else on," he said.
Commodity IT, weak analytics hobble traditional retailers
Goutham Belliappa, vice president of North America Insights and Data for multinational IT consulting corporation Capgemini, said UsTrendy's increasing reliance on tech to shape its business model reflects what's happened in the retail space. "The biggest retailers today are tech companies. They're putting a lot of pressure on traditional retailers."
Yet, most legacy retailers -- that is, those that started as brick-and-mortar stores -- have yet to capitalize on the value of technology, Beliappa said. They remain weak in their use of analytics and, as a result, are unable to identify which demographics to target or how to cater to any specific group.
"They need to move away from mass marketing to personalized advertising," he said.
Legacy companies also struggle with becoming agile enough to quickly adapt to market forces. "Their strategy is broken because they have commodity technology. They didn't think about differentiating themselves through technology," Belliappa said.
That's where companies like UsTrendy have an edge, he added, noting that the most successful CEOs today are those who see themselves as tech CEOs. "More and more, technology and strategy are tied together."
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