3 years ago, HauteLook was a fast-growing flash sales startup with a popular website, but no mobile presence.
In Oct 2010, HauteLook went mobile with its first iOS app. Today, ~44% of revenue comes from mobile, including the iPhone, iPad and Android apps, and 55% of logins.
For background, HauteLook is today the flash sales division of Nordstrom. Sales of big name brands start at 8am PST daily, lasting for 2 days, at 50% - 75% off. We interviewed Mark Geller, head of product for mobile at HauteLook, to learn more about HauteLook’s mobile story and current/future challenges.
"mobile, and in particular iOS, are a very good fit"
From the beginning, HauteLook’s core demographic - women ages 21 to 45, was perfect for the migration to mobile, and in particular iOS. Flash sales are also well suited to mobile; products are in limited supply, fly off the shelves fast, and customers want to view and buy quickly. The numbers bear this out. As of Q2 2013:
- 55% of logins come from mobile
- 44% of sales come from mobile
- 70% of mobile volume comes from native (vs. 30% for the mobile web)
- 88% of mobile activity comes from iOS
This breakneck growth over the past 2.5 years has brought challenges and surprises that put HauteLook at the forefront of the trend of mobile swallowing the world. Here are some of the challenges, and how they’re handling them.
In a given month 34% of members are mobile only
In looking at their data, the HauteLook team realized that ~34% of users each month are mobile only (never log in through a desktop or laptop), and that an increasing number of customers discovered and experienced HauteLook entirely through native mobile apps. The data also revealed that customers who were engaged on multiple devices were significantly more profitable, in some cases by 2X or 3X. This raised a serious question:
- What does the overall lifecycle experience (not just the purchase experience) need to look like for members if they only ever login from one platform, including mobile?
For most retailers today, mobile is just another channel. You assume customers sign up online, and then might sign into multiple places. As a result, many retailers’ mobile apps will have a subset of full web functionality - for example, many retailers don’t give you a way to process returns through the app - you either have to open a ticket or go to the site.
Many retailers can justify treating their mobile business this way today. HauteLook, with 44% of sales and 34% of users each month coming uniquely from mobile, simply can’t. For many retailers, this is what the future might look like.
Mobile Discovery "What we’re seeing increasingly is that a meaningful portion of members may see our TV commercial, download our iPhone app, and experience HauteLook entirely on mobile apps, never accessing the website."
- Mark Geller, Head of Product for Mobile, HauteLook
This highlights 2 big challenges.
First, most businesses assume that their customers will have some web based relationship in addition to being a mobile user. But what happens when users ONLY EVER interact with your business from mobile? They discover you in the appstore, onboard in your iPhone app, process returns there, and more. Does your app-store listing accurately reflect, or better yet, sell the breadth of your entire business? Do you even have a mobile onboarding process? Are you personalizing your mobile experience appropriately? HauteLook is addressing these issues today.
Second, it highlights the growing power of the appstores. One big debate in mobile in recent years has been over the fickle, winner-take-all nature of the appstores. In the past this had applied most to startups and developers. If most people start accessing your business via mobile or tablet (and native continues to thrive as it has in the last half decade), then that debate begins to apply to major retailers. Case in point - it’s really hard for someone to legally take down your website - but your iPhone app? Not so hard …for the unprepared, the results might be painful.
Preparing for a world where your customers are mobile-first or mobile only
HauteLook has continued to optimize, in ways big and small for a world in which mobile eventually becomes dominant. Three tactical steps they’ve taken:
A/B testing: The HauteLook app is designed to respond to server side UI variables. This has allowed the team to A/B test in their app, as easily as others might do with websites (using one of the many SAAS services). Testing is applied to optimizing UX elements such as list views vs. carousels as well as setting defaults for opening and closing sidebars and displaying promotional content. Results are fed back into Google Analytics and used by the mobile team to iterate rapidly on product in between app releases.
API design: HauteLook has continually optimized its API for sending and receiving data to improve the experience for mobile apps, particularly around performance. They have moved as much of the data processing to the server as possible, limited the total data being sent, and pre-configure the data in the format most easily consumed by the mobile apps. As a result, screen loading times have been reduced as much as 50-90% and the HauteLook app is one of the fastest in the industry.
Photo Scaling: HauteLook does all its own photo-shoots and product staging in-house, often creating new imagery for as many as 1,000 new products per day. As mobile has evolved, they’ve realized photo scaling requirements can differ materially between the web and mobile. For example, web sites can often use a relatively small number of image aspect ratios and quality, whereas mobile, with its multitude of sizes and shapes—between smartphones and tablets, in portrait and landscape modes, with sidebars open and closed—can require many more sizes of every image. Rather than resize these images on the fly, which slows the experience, HauteLook pre-resizes product images in as many as thirty configurations. When you consider how important imagery is to driving e-commerce purchases (almost every time you buy a product online, you’re judging it based on staged photos), this really impacts revenue.
Actionable Items Reflecting on our conversation, a few lessons stand out.
Be where your customers are This is the biggest lesson from HauteLook. When user data revealed unique and unexpected customer behaviors, HauteLook adapted quickly. This willingness to meet customers where they are has paid off immensely. For example, if prospective customers are increasingly discovering you via mobile, make sure your appstore listing accurately describes your full business value proposition, because that may be the only chance you get to convert that customer. When designing your app, be sure to include core customer functionality - onboarding, returns, account updates, member care, and the like - inside your app (as opposed to just purchases).
Architect your stack for mobile specific use-cases For HauteLook this meant optimizing the API, pre-resizing images, and adapting a flexible analytics solution. This might mean something else for you, but some upfront work on this will pay dividends in the long run.
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