Businessmodel of Lyst

Customer Segments

Lyst has a mass market business model, with no significant differentiation between customer segments. The company primarily sells products in two categories: Men and Women.

Value Proposition

Lyst offers three primary value propositions: customization, convenience, and brand/status.

The company offers customization by enabling shoppers to create lists featuring their favorite brands. Its technology remembers this content and uses it to make personalized style recommendations and notify users when items of interest go on sale.

The company offers convenience by aggregating over three million products from over 11,000 designers in one place. When it is time to make a purchase, customers just have to click an “Add to Bag” button, allowing them to place an order directly with the retailer through the site.

The company has built a strong brand as a result of its success. Its retail partners include some of the top fashion stores and brands in the world, including Burberry, Saks, J.Crew, Balenciaga, Neiman Marcus, Dolce & Gabbana, Bergdorf Goodman, and Lane Crawford. It is now one of the largest fashion tech firms in the UK, with more than 120 employees and a turnover of over $60 million.

Channels

Lyst’s main channel is its website, through which it acquires customers. The company also draws in users through its mobile app. Beyond these two, it promotes its site on its social media pages.

Customer Relationships

Lyst’s customer relationship is primarily of a self-service, automated nature. Customers utilize the website and mobile app while having limited interaction with employees. The company’s site includes a “Help & FAQs” section with answers to commonly asked questions. It also features a “Sizing Guide” that identifies specific measurements for different size categories (Small, Medium, Large, etc.) in different countries. Moreover, it offers an engineering blog for developers. That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

Lyst’s business model entails maintaining a robust platform for its users. The platform includes its website and its mobile app (for the iPhone and iPad).

Key Partners

Lyst’s partners are the retail brands and designers it features on its website. To become a partner a company must request an invitation from the company and receive approval.

Key Resources

Lyst’s main resource is the proprietary software platform on which the site runs. The company also depends on human resources in the form of its technology and customer support staff. Lastly, as a startup it has relied heavily on funding from investors, raising $60.5 million from nine investors as of April 2015; investors include Accel Partners, Balderton Capital, Susa Ventures, and DFJ.

Cost Structure

Lyst has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely transaction expenses, a fixed cost. Other major drivers are in the areas of customer support/operations, administration, and marketing, all fixed costs.

Revenue Streams

Lyst has two revenue streams:

Transaction Fees – The company makes a commission off of all sales that occur through the site.

Information Fees – The company collects information regarding customer spending and general behavior (e.g., peak browsing hours) and sells it back to brands and retailers