The online retailer has spent nearly $300 million acquiring three shipping software vendors over the past nine months.
Laurie McCartney left Walt Disney’s strategic planning team two years ago, wanting to scratch her entrepreneurial itch. There was just one problem: McCartney wasn’t certain what kind of start-up tickled her fancy. Indecision ended as soon as McCartney became pregnant. Frustrated with traditional maternity offerings and channels, she decided to launch her own online specialty boutique for moms-to-be and their new offspring, delivering Babystyle.com in July.
“Women are the fastest growing segment online and yet the most underserved from an e-commerce perspective,” says McCartney, CEO of eStyle, Babystyle’s parent company in Los Angeles. Not only did online opportunities look good to her, but land-based retailers didn’t seem too threatening. Most maternity stores haven’t kept pace with contemporary women, observes McCartney: “Just because you’re pregnant doesn’t mean you have to lose your sense of style.” Frumpiness aside, another flaw of traditional maternity and baby markets is fragmentation: women typically have to visit one store for bassinets and another for maternity blouses. Not fun when you’re crunched for time and uncomfortable as well.
Babystyle offers one-stop shopping for “time-starved” mothers-to-be. The Web site offers 1,000 items across five categories: maternity clothing, baby clothing, nursery furnishings, infant development products and baby gear. Within its niche category, Babystyle takes a shotgun approach: “We’re trying to target all consumers at multiple price points,” says McCartney. For example, nursery offerings begin around $49.95 for a Fisher Price portable bassinet and range as high as $1,050 for a vintage iron crib from Corsican.
Dubbed by observers as a mixture of Martha Stewart and Instyle, Babystyle wins kudos for its sharp graphics, stylish merchandise and trendy content. Actress Reese Witherspoon (in her second trimester) makes a cameo appearance in “Steal this Look” along with merchandise geared to capture Witherspoon’s brand of casual chic. Another area of the site profiles designer Robert d’Amour, creator of the Miel label, who maintains that stylish maternity clothing is no longer a non sequitur.
When it comes to merchandising, Babystyle takes a “solution selling” approach, presenting items in context with an entire ensemble. Click onto “Stroll Patrol” and shoppers will find not only the outfit of choice for a postpartum promenade, but the appropriate accessories, such as a stroller and baby blanket.
Despite its precocious start, Babystyle has some stiff competition. IVillage, the grand dame of community sites, operates two online stores: iBaby and iMaternity. Etoys, another major contender, has its own onsite baby store and expanded further into the niche with its acquisition of BabyCenter.com.
Still Babystyle has attracted some impressive investors. Initial seed money of $1 million has been boosted by another $14 million. Much of this new infusion of cash comes from Global Retail Partners and Oak Investment Partners, venture capital firms that have funded online retailers such as Garden.com and PETsMART.com.
One thing attracting investors has been McCartney’s long-term strategy. Her business plan calls for four more female-oriented sites under the eStyle umbrella, intended to revolve around the mother and child as they age. It’s the Disney philosophy, explains McCartney: “Once you have the customer, you don’t want to lose them.”