/// Massively Multiplayer Online … Shopping? It’s Real, Addictive and Brutal
Every New Year’s, Japanese shoppers line up to snag so-called “lucky bags” stuffed with last year’s clothes, shoes and even tea bags. Deal-hungry buyers have no clue what’s inside, but they do know they’re getting their loot at a hefty discount. If they don’t like what they get, they can trade with other shoppers.
This tradition, known as fukubukuro, goes back at least 100 years. While poor shoppers like myself can’t afford a ticket to the land of the rising sun to experience the craze first-hand, Little Black Bag, a recently launched Los Angeles-based startup, is bringing the ritual to online shoppers in the United States.
The service’s key difference with fukubukuro is that Little Black Baggers can choose one of the products in their bags. The rest are surprises chosen by the company’s clever algorithm, which takes into account available inventory and your personal fashion do’s and don’t’s.
You start off by taking a style quiz, a survey of what styles fit your personality, like hipster, boho, downtown glam, or preppy. You fill up a virtual Birkin-style black bag with your favorite purses, jewelry, accessories and beauty products. (Currently, Little Black Bag only carries unsized items for women, sorry guys.) Then you choose what brands you identify with from a list of more than 150.
The company crunches all your data to compute your personal style. In my case, the algorithm labeled me a “stilettos and bright red lipstick” kind of woman, a classic glamor girl. Wrong on the lipstick, but right on the high-heels, I began the shopping proper as a little houndstooth bag.
Digital bag clutched tightly, I was free to roam through hundreds of purses, bracelets, earrings, necklaces, lotions, scarves and fragrances from brands like Big Buddha, Steve Madden, Nila Anthony and Betsy Johnson. Most brands tend to be mid-range and not as high-end as what you might find on Gilt and Rue La La, though it does have items by the likes of Kenneth Cole, BCBG, Calvin Klein and Badgley Mischka.
After selecting just one product from this massive array, you checkout, pay a flat fee of either $30 or $50 (I had a coupon from the company), and then hit the trading floor and chat rooms, armed with your chosen item and the two or three additional ones Little Black Bag selected to round out your shopping bag. This is where the champion shoppers are separated from the amateurs.
“It’s like stepping into the stock exchange,” says co-founder and CEO Dan Murillo. Customers are firing off about two million trades a month and using the service for an average of an hour each day, he said.
My first day of trading, I received more than 100 trade offers for a set of three pink Big Buddha coin purses, a bracelet with SWEET oversized gold (hideous) letters, and a denim tote in my bag. I gladly traded the bracelet for a stone pendant necklace and the coin purses for an orange oversized houndstooth scarf, but decided to hang on to the purse, my chosen product, since I was in the market for a work bag.
Over my next six days of trading—you get a week if you opt for the $50 bag, three days if you go with the cheaper one—I continued to get about 100 daily trade offers. The constant trading translated into a deluge of email notifications. I found this feature annoying and spammy, but it does increase the chances trading will be successful and interaction on the site. I rarely jumped from email notification to the website, but hardcore customers like Lindsey Kaples, a stay-at-home mom who works part time, see these alerts as crucial to successful trading.
If there’s an item you like, “you want to grab it before somebody else does,” says Kaples, 30, who’s been using the service daily since April. (This sense of urgency reminds me of stereotyped scenes of women fighting over designer boots at a sample sale.)
Kaples also uses the site’s social features, its chat rooms and newsfeed, to identify products that are trading well before choosing an item. A savvy tactic.
“You open a bag for that item so you can get a higher value,” she said. Around Halloween, she chose a pair of “silly skull bowls” she didn’t really like for just that reason. The bowls retailed for $42, but she was able to trade them up for someone else’s $70 purse because they were scarce and in high demand. Basic economics. She then traded the purse for two items with a total retail value of $90. Cha-ching. Kaples figures she orders three to four bags a month.
Using Kaples’ methods, I was also able to trade up the $20 stone pendant necklace for a $30 turquoise multi-row fabric necklace, and my bag shipped in a white box with the fabric necklace, houndstooth scarf and tote bag, which I didn’t much like and plan to return.
Little Black Bag is not your typical flash-sale e-commerce site. It’s part online community, part online store. Murillo likens Little Black Bag to a “massively multiplayer online shop,” with more similarities to Farmville than discount e-retailers Gilt or Rue La La.
Some customers “just want to buy something and check out,” says Murillo, the company’s CEO. “For those, there are plenty of other websites.”
Customers can also earn vanity badges, gift items from their bag to a friend or share a product they “love”—the site’s equivalent of a Like button—on Facebook, Twitter or Pinterest. If a friend clicks on that shared link and makes a purchase, they get an additional item, which they can also trade.
This makes the service, which launched in February and has raised more than $10 million in venture capital, one of a growing number of brands rewarding customers financially for advertising their products and services through social media. In Little Black Bag’s case it gives its customers an additional item to trade. But how does Murillo plan on turning all that trading and time into money for Little Black Bag?
In a word: data. All the information the company is gathering on the trades customers make, accept and reject. Currently, they use this data to decide what merchandise to buy, what brands to add and what mystery items to assign to each user. In the future, Murillo envisions using this information to recommend products to Little Black Bag customers browsing partner sites, to identify emerging fashion trends and to help price their products more effectively.
Murillo claims that his site can gather a richer fashion profile about its customers in an hour than Amazon can get in a year. If that’s true, it may have the potential to bring personalized shopping into the digital world. If nothing else, it’s bringing bare-knuckle shopping into the digital world. Just don’t try and take my purse.