An Interview With Fab.com’s CMO

“If Amazon was web 1.0…Fab is web 3.0″

“Startup” is not the word that comes to mind when we see one of Fab.com’s lovingly designed online sales, or receive one of their exquisite emails in the Inbox. Yet, Fab.com’s current incarnation was launched just over a year ago, and this startup’s design aesthetic and values is partly why newer startups are considering taking on a lead designer as co-founder. If you happen to meet anyone on the design upstart’s management team, the first impression is very much of an experienced team. With good reason. Jason Goldberg, the co-founder and CEO, has several other successful startups under his belt. Similarly, CMO Scott Ballentyne has been in Marketing for over two decades, most recently as CMO of Vonage. The two have known each other since their T-Mobile days over a decade ago.

My talk with Scott last week came at a time when serendipitous discovery via social is increasingly superseding search. This weekend, Facebook toppled Google as the most visited site in Brazil. It would not be an exaggeration to say Brazil is only the beginning. As I’ve written before, social has played a big part in Fab’s success; in fact, Scott says Fab would rather be known as a social commerce company than the newest flash sales site.

Labels aside, Fab’s preoccupation with both design and social integration is behind some impressive milestones. Pre-launch, the website had 50k members in the first 30 days, and 165k members the day the website went live. Now, a year after it launched, the website has 3 million members worldwide, of which 80% are based in the U.S. and 700k have reportedly been acquired within this past month alone. Fab’s mobile app was launched in October ’11 and already contributes 40% of the site’s daily traffic. Enviably, fully 50% of the site’s members have been acquired through social channels and word of mouth. You can follow Fab’s journey from the beginning in this slideshare.

So, what’s next for Fab?

The Samwer brothers have been called the scourge of the internet by some, opportunists by almost all. Their Fab clone, Bamarang was called out in this post by Fab’s CEO. Since then, Fab has been on an acquisition spree – buying up NYC-based FashionStake to expand into the apparel category, and German Casacanda to break into the German and Austrian markets. The design company also has plans to expand into UK, France, Brazil and Turkey – all in all, international should contribute 10-20% of Fab’s revenue by year-end.

While Fab’s $40 million in funding will help with these plans, web 3.0 or not, their long term success in pulling away from less social competitors like One King’s Lane will depend on their ability to nail fulfillment, as they have acknowledged via email.

Yes, reducing ship time is a top priority. We’re hard at work on this.  A critical part of our long term differentiation is making sure every customer interaction with Fab is a great one – which means that our members receive their purchases as quick(ly) as possible.

Meantime, the company plans to introduce personalization on the website, plus what’s hot across categories or “shops” (as categories are called internally) in the immediate future. Another addition will be the introduction of collections – whether these will be lookbooks or brand collections wasn’t immediately apparent. What is apparent is that Fab’s management isn’t afraid of putting their money where their mouth is. While Scott didn’t disclose details like email open rates (critical in the retail trade, as any online retailer will tell you), he did share that Fab invested in Facebook ads very early on to spur social connections and that traffic from Facebook is often comparable in volume to email-generated traffic. Not surprisingly, the majority of sales is driven by women. Interestingly, men tend to spend more per order and have a higher propensity to come back, and nearly two thirds of their overall sales are repeat purchases. Given these high engagement rates, I’m fairly bullish about Fab’s ability to meet their next, and most immediate challenge of distribution.

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