Case Study: Moda Operandi

Moda Operandi is a really peculiar business model, It was born online. And then its one of the very, very few fashion retail realities that successfully
transitioned to a brick and mortar model. However, they transitioned in a very peculiar way. In fact, they transitioned to a brick and mortar model that is not
open to the public. They decided to open a store in New York on Madison Avenue on the Upper East Side. However, if you try to enter, if you try to knock on
the door or ring the bell, you will see the store is closed. So, what’s Moda Operandi doing?
Moda Operandi: A Haven for the Haves
“Shopping online is already the perfect experience,” said Lauren Santo Domingo, a co-founder of Moda Operandi and a contributing editor at Vogue. “How are
we adding to that?”
Lauren Santo Domingo has a really good intuition about what shopping online is and what it brings to the experience of fashion shopping. If we open a brick
and mortar store, how are we adding value to that experience that’s already so perfect?
So a few numbers:
• Stores opens only for private shopping visits for customers who spend an average of $1,200 per order.
• Privacy is key.
• London’s showroom that opened in 2014 earned its entire first quarter’s projected revenue in just one month.
• “Inside, past the heavy curtains in the vestibule, Moda is a confectionary wonderland, a haven with gelato-colored walls on blush suede furniture. Aside from
a fine jewelry salon in one back room (fine jewelry, raging from $10,000 to $100,000, has turned out to be a strong seller for Moda), the entire space is
adaptable and as customizable as its stock.”
• “Much of the company’s business, as much as 60 percent, is still in orders from the runaways, and it will not purchase stock specifically for the Madison
store the way that an ordinary retailer would. That means much of the gratification is delayed, though most appointments will feature some in-season
products that can be purchased and worth out of the store”.
• “Whether gratification comes immediately a four to six months later, Ms. Santo Domingo said her customers come ready to purchase. The company has no
minimum-purchase policy for its private appointments, or any stayed expectation of purchases at all. It has confidence in its system. ‘If she’s not buying
something’, Ms. Santo Domingo said, ‘our algorithm’s off’.
Questions
1. Retail is not about exclusivity anymore, it’s about access. Can you think of another example of a brand that limits access to its products?
2. Retail in the fashion space is very much anchored in the experience: For Moda Operandi the online and offline experiences are highly branded but they
serve very different functions. Please articulate what is the online function and what is the offline function.
3.One of the greatest lessons from MO is the way they manage their inventory: Can you think of creative ways in which brands can adopt similar (not
identical) models?