Thanks to data-analytics, SassyClassy has been able to scale up their business by 300%
If you were to poll your circle of fashion-affine friends on who the most-prevalent advertisers on Facebook and Instagram are right now, SassyClassy figures to be at the top of the list. Founded in 2014 by three siblings from Munich, SassyClassy is popping up in IG feeds across DACH with a clever paid-ads strategy that has the eCommerce fashion label on the cusp of nearly EUR 30M in revenue for the year. Buoyed by their success, the founders are expanding into consulting with an agency of their own to help other fledgling eCommerce enterprises scale up.
“We love numbers. They are our navigation system and we have complete faith in them,” Denys Lichtenstein tells OMR. Lichtenstein founded SassyClassy along with his sister Roxana and his older brother Boaz nearly 8 years ago. At the time, Roxana just turned 18, while the brothers are in their early 20s; the trio is the third generation in the family to carry the fashion torch: their grandparents ran a shop for children’s and women’s clothing, while mom is a designer and dad produced fashion collections for TV shopping channels.
The name of the game is data, data and more data
In 2014, the same year SassyClassy was founded, Denys and Roxana move abroad. “For Roxana and I, our initial focus was on getting a university degree,” says Denys. He relocates to San Francisco, Roxana to London. Older brother Boaz stays in Munich, finishes his business admin studies and focuses on scaling up SassyClassy on his own. As they leave Boaz tells his younger siblings, “make sure you learn something. I’ll keep the positions open for you, but I need you to come back.”
For the past half year, big brother’s wish has come true with all three siblings working full-time on Sassyclassy near Munich. Together with a team of 60, they sell some 1400 own items via their online shop from leather leggings to oversized blouses and braided hair bands. Current estimates have SassyClassy’s revenue approaching EUR 28M for the year before returns. To put that into context, revenue in 2019 was EUR 6M. While the pandemic-induced eCommerce boom played a significant role in the revenue jump, so too did a nerdy propensity for gathering and analyzing user data, a passion that each sibling has. Data has advanced to the core company strategy.
“I learned from people who wrote the algorithm”
Denys Lichtenstein, the middle child of the three siblings, has been working full-time for Sassyclassy since July and was instrumental in creating one of the most-important reach levers: paid social ads. For the previous four years, he was employed by Microsoft and Facebook, where his role was to increase the efficiency of customer ad campaigns. “I learned from the people who wrote the Facebook algorithm,” he says. The objective of SassyClassy’s paid-ad strategy, according to Denys, is to prioritize the display of ads of in-demand products, like the top-selling leather leggings, on Facebook and Instagram which serve to boost the click rate and thus reduce the CPC.
But with over 1400 individual products on offer, the algorithm can’t figure it out on its own. “At first, we relied on the Facebook algorithm and thought it would select the best product to promote.” It did not. Instead of choosing top-sellers, it selects products with conversion rates below 1% and others, which do generate more sales, but only infrequently. “Efficient it was not,” says Denys Lichtenstein. To optimize the ad performance, the trio begins experimenting with various business intelligence tools, i.e. software that collects a variety of data to optimize business processes. However, they all fail to meet the siblings’ demands. “We compiled a list of the data we needed and built the software ourselves.” And what praytell does the software primarily consist of? Excel lists.
The excel tables help increase their at-work efficiency. Denys uses them to place ads in a manner more in line with the company’s strategic objectives. For each product, he calculates a so-called “Facebook Optimization Score,” a figure that factors in product margin, conversion rate, add to cart rate and returns. Only after the score is high enough will a product be added to Facebook Ads Manager. To account for current market dynamics, he only uses values from the past 7 days. “Our goal with paid ads is to take stock of the market at present as precisely as possible.” And, of course, to scale sales. Currently, there is a 6-fold Return on Ad Spend.
Millions for influencers
But there is a limit to what paid marketing can do on social. “It became apparent pretty quickly that we would need to expand our marketing mix to scale up further, which was the main factor behind approaching influencers,” says Roxana. She spent the past three years working for Linkedin in Dublin, where she managed new advertising customers for their first three months. For the family business, she’s responsible for everything pertaining to influencer marketing, the second key pillar in the SassyClassy marketing mix. SassyClassy regularly collaborates with influencers and spent EUR 2.2M on them in the past year.
As you’d expect from a company that loves data, numbers are analyzed every step of the way: before, during and after the influencer co-op. “The first thing we do is to verify how many followers a given influencer has, how many of them are female and how many are between the ages of 18 and 44.” Likes, she tells OMR, are not typically important, instead prioritizing whether or not the SassyClassy target group is sufficiently represented. Furthermore, they vet comments manually. “For many influencers, you see that it’s the other colleagues who engage with posts and not the community. That’s not what we are after. We require an engaged community,” she says.
With the information, they create a predictive model for each co-op partner and determine in which areas an influencer is useful, if they would have a tangible impact in increasing sales, will she boost the brand image or is it a combination of factors? “As soon as we are able to make determinations based on the data, we adjust our strategy accordingly,” she says. As soon as a collection is sent to an influencer, the sales department is looped in. “We then check to make sure that we have enough of the garments on hand in the warehouse. If not, we order more. We also analyze what the shop history says about the products.” After each influencer campaign, they set up another excel list to determine what the average purchase amount is for followers of the influencer. “We assess every aspect and then decide whether or not to continue with the co-op.”
Ten days to the shop
Another SassyClassy bestseller is the oversized muslin blouse. “We started pushing the blouse in October with social paid ads because the Add to Cart and checkout rates exploded,” says Denys. Then they launched an influencer campaign last February with German influencer Farina Opoku, who also promoted the blouse. As of today, the blouse has been purchased over 150,000 times. On the first day that Opoku posted the blouse, revenue doubled. The blouse is now available in 40 different versions.
Another factor in SassyClassy’s success: sufficient agility to be able to effectively react to burgeoning trends. If Instyle predicts a new trend, like say a certain color or cut, a methodical, detailed fact-finding mission is launched. First, suitable hashtags are compiled, which are then checked to ensure that the numbers correspond to the Google Search volume and then analyzed against the internal shop data. If they see that the data backs up the trend projection, they cut in their father, who is responsible for acquiring new clothing items. “We need an average of 6 to 10 days to develop a new product and list it in the shop,” says Roxana. The in-house Sassyclassy brand of clothes was also added to major German fashion platform Zalando earlier this year. “We want to boost the reach of our articles,” Denys says of the move.
From data nerds to data agents
As all three siblings know the ins and outs of using data to scale up their business, they should know what moves are promising. “Together, we have pushed our digital marketing efforts to the next level by seeing what the data says and acting accordingly,” says Denys. Now, they will be making their expertise available to other companies starting in January, when their standalone agency launches. “Data is something that oftentimes sounds so intimidating, so vast and complex. And it doesn’t have to be,” says Denys. He says that at Facebook and SassyClassy he dissected data into usable, digestible bites that could then be processed by non-data nerds—and that’s what he hopes to do for other companies moving forward.