For wealthy shoppers — really wealthy people who love to shop — shopping sprees are a different story. Instead of treating themselves to a few items once or twice a year, they spend six figures on a single order, sometimes spending more than $1 million a year on clothing, jewelry, and accessories.
In fact, the top 2% of shoppers can account for 40% of a retailer’s sales, Lupe Puerta told Business Insider, citing figures from luxury e-commerce platform Net-a-Porter, where he handled shopping for personal and VIP customers.
The personal luxury goods market reached an estimated $400 billion last year, according to Bain research, which equates to top shoppers spending billions of dollars annually across the market as a whole.
And these customers don’t do it all themselves: Many hire personal shoppers whose job it is to pick out the perfect handbag to take to brunch or the perfect jacket to wear on a vacation to the Hamptons.
After 15 years running the personal shopping division at Net-a-Porter, Puerta founded The Floorr – named after the store floor the app recreates – to digitize and streamline the process.
“People are on WhatsApp, they’re on iMessage, they’re on email, it’s a very fragmented way of working,” Puerta said of personal shoppers, adding that they often communicate style suggestions to customers via PDFs or untraceable links.
“Think about how much power they have” — a top personal shopper can make $5 million a year — “but they don’t have the tools,” she said.
Not only is this segmentation confusing for customers, it also means personal shoppers could lose out on commission.
Launched in January, The Floorr tracks links and pays shoppers, whether they’re clients or their friends, a percentage of sales that are tracked on a dashboard that updates in real time. Outfits are styled with mood boards and video styling sessions, giving clients a more unified platform to browse items. Along the way, the app collects data that helps personal shoppers and retailers understand which products are selling well and what trends are emerging.
Essentially, it streamlines the entire process from finding a luxury look (major retailers like Bergdorf Goodman and Shopbop, as well as brands like Prada and Chloe, are among the platform’s vendors) to offering that look to customers so they can purchase the items. It’s a bit like an affiliate marketing app, but much more personalized and for the wealthy.
The app makes money by taking a percentage of each sale (between 2% and 12%) as a commission, and Puerta said he expects to hit $1 million in revenue this year. So far, the largest order on the platform was for $130,000.
This summer, The Floorr closed a $1.65 million seed round of funding with backing from Net-a-Porter co-founder Carmen Busquets and Nigora Tokhtabayeva, founder of jewelry brand Tabayer.
Raising funds wasn’t easy, as she was traveling in an environment where fundraising is notoriously difficult.
“The biggest frustration for us is the fact that we’ve pitched to amazing tech, retail, fashion tech investors and they’ve said, ‘This is great, this makes sense,’ but then I have X number of startups in my portfolio that need my help because they’re going through a tough time,” she said.
With the funding in hand, Puerta says he plans to use it to expand his team and continue updating the product.
Floorr has published the 12-page presentation it used to raise $1.65 million.
