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Headquarters: Burlingame, California
Top Executive: Anna Zornosa, Founder and CEO
Products: shapewear and apparel
In 2012, Anna Zornosa had the feeling that existing shapewear options just didn’t cut it. Her first experience with shapewear, she says, was an experience that many women have: It was “very unsatisfactory.” Zornosa determined that shapewear is the kind of product with which the consumer can really benefit from a high degree of personal service. Typically, this kind of attention is beyond what is possible in retail outlets, where women find themselves uncomfortably engaging with strangers in very personal conversations.
Despite the fact that she didn’t have a background in either apparel or direct selling, Zornosa surprised her family and friends when she told them that she was starting a company that would sell apparel in women’s living rooms. While she didn’t have experience running an apparel company, she did have a broad background with some large firms such as Yahoo and Knight Ridder. Zornosa served as vice president with Yahoo and was chief marketing officer for the digital division of the Knight Ridder newspaper chain. She also had experience with The Cobalt Group and Topica Inc., and she served as an adviser to Glam.com, Motista and Chloe + Isabel.
Now Founder and CEO of Ruby Ribbon, Zornosa’s passion for apparel and, particularly, for selling apparel through direct sales, was not only driven by the need for a better product and shopping experience but also to a large degree by her memories of her mother who had been an “Avon lady.”
“My first job was when I was 5 years old and thought I was VP of operations for my mother’s Avon business,” she says. “My job was to put makeup in the bag and help make deliveries to the neighbors.”
In 2011, at a crossroads in her career, she began to notice more and more women carrying around smartphones. “I kept thinking about what my mother’s Avon business would have been like if she had owned a smartphone. I really began to think about how to do direct sales in the age of social media and what the right type of product would be to bring to market through this channel.”
Zornosa began to think, What if we could take a product like this to market with a channel that allowed us to serve the customer very, very personally? To find out, she began inviting friends to come into her home to talk about the concept, and her ideas; it wasn’t long before she was convinced that she had an idea with legs.
Ruby Ribbon Inc. announced its launch in May 2012. The launch was supported by $3 million in funding received from Trinity Ventures, a Menlo Park, California-based venture capital firm; Patricia Nakache, General Partner at Trinity, assumed a role on the company’s board, along with Zornosa. The company’s mission was clear: “Provide women with apparel that fits their lifestyles while making them look great.” In its May 1 news release to announce its launch, the company noted a similarity to the Spanx and lululemon brands.
But Ruby Ribbon offers something different—something based not only on Zornosa’s own experiences, but also on the insights she continues to glean from women, her customers, whenever and wherever possible. She’s a big believer in the importance of research and took a slow-to-market approach with her company. Her desire in crossing every “t” and dotting every “i” was to ensure that the launch as well as the future of the company’s success would be bolstered by good business principles and sound planning.
Zornosa immediately leveraged the power of direct sales and e-commerce to connect with customers. Products are sold by a nationwide network of independent distributors, called Stylists, who introduce the products one-on-one in their homes. Stylists are further aided by powerful online e-commerce tools.
“In the age of social media, direct sales, which is all about allowing entrepreneurs to sell through their own networks, is a powerful way to bring new products to market,” said Nakache in a news release announcing the launch of the company. “As companies like Stella & Dot have shown, a company with unique products and a strong brand can build audience more quickly through social commerce than has been possible in the past.”
Companies also can make an impact through a strong social mission, says Zornosa; one of her core criteria in launching a company is the ability to make a positive impact. Another is the ability to help female entrepreneurs. “I had been lucky in my own career as a female entrepreneur, and I realized that a lot of my own personal satisfaction came from helping other women start businesses.”
Ruby Ribbon Stylists have the ability to do just that in highly measurable and meaningful ways, as well as in flexible ways. They can focus as much, or as little, as they’d like on running their businesses, from a sideline-hobby type of endeavor to a full-flung business enterprise.
Buoyed by Investors
Ruby Ribbon has been able to attract venture capital to fuel its growth and has been well-capitalized since its inception, Zornosa says. She was able to personally fund the seed stage because of her participation in other successful startup companies—she was Vice President of Sales for PointCast; CEO of Topica Inc.; and Senior Vice President of Women.com. She then welcomed two Silicon Valley venture firms as key investors: Trinity and Mohr Davidow.
|Founder and CEO Anna Zornosa (far left) spends a moment with Stylists at a Ruby Ribbon runway show.|
Katherine Barr is one of those investors. Barr is General Partner with Mohr Davidow in Menlo Park, California; she invested in the Series B round for the company, which she had heard about from Patricia Nakache with Trinity. The investment process, and ultimate decision, is not one made lightly, Barr says. “We tend to go very deep in our due diligence,” she says. In her case, that included some personal exploration of the product. Having just come off a maternity leave with her second child, she didn’t know about shapewear but was curious to try it. It was, she says, “by far the most comfortable and less onerous and easiest to wear of anything I had tried on.” Like Zornosa, she also pointed to the very personal nature of this type of purchase and the need for more privacy and personalization than can typically be achieved in a retail setting. “It’s a very uncomfortable kind of situation, so the product itself is perfect for this kind of go-to-market channel.”
In making investment decisions, Barr says she looks at the market potential as well as the entrepreneur. (In this case, Barr says Zornosa “is a super-impressive entrepreneur—not only with an amazing vision, but able to implement, go to market and inspire a group of Stylists and Stylist Leaders.”) Just as compelling is the marketing strategy, and Barr says the direct sales model “is highly efficient.”
Additionally, Barr adds that the product will not be switched out each season as is common in the fashion industry. The shapewear and shaping basics lines, Barr notes, “are pretty much evergreen lines; we don’t have to worry about the seasonal issue as much as other companies.” Not only does this make it easy for the Stylists to keep up with the product line, but it also has a big impact on expenses.
The company is doing well, though as a young company, Zornosa says, “We don’t yet reveal revenue.” But she adds, “I will say we tripled revenue between 2013 and 2014, and have consistently beaten our operating plan.”
It’s a big market with a lot of potential, as Zornosa points out: apparel ($166 billion), bras ($6 billion) and shapewear ($1 billion). Despite the potential, though, Zornosa has taken a measured approach to growth.
The company entered the market relatively slowly, she says, taking a bit of a “soft launch” approach and learning from customers and Stylists along the way. “In 2013 we started focusing a little bit more on the development of a national organization, but it wasn’t about growing fast,” she says. “It was about making sure that we had the operations and the infrastructure to support nationwide sales.
“From my research, I came to understand that when direct selling companies start growing, they can pick up pace very, very quickly. My goal in 2013 was to make sure that the infrastructure and operations to support that growth were in place.”
The next year, 2014, was about building the executive team, Zornosa says. It was also a year of building up a leadership structure and leadership capabilities among Ruby Ribbon’s Stylists. “Today we have leaders in place in about 50 markets in the U.S.,” she says, adding that the company is still looking for leaders across the country.
This year, the focus has been on national expansion. “With Xanthie on board, we’re trying to return to that vision of really having a company for the social media age,” Zornosa says. “We’re bringing a little bit more technology into play, and we’re really now getting to the point where we’re starting to spread our wings, pick up the pace and really take off.”
Xanthie Drankus is the Senior Director of Marketing for Ruby Ribbon. “Social selling is really, really powerful in this day and age, primarily because everybody is so mobile,” Drankus says. “That’s very exciting because it means you’re not tied to a desk, which, for our Stylists, is very powerful.” It means that Stylists can be going about the business of their day—whether that’s working at another job, taking children to appointments or wherever their days may take them—while still having the ability to engage with their Ruby Ribbon business and customers.
Ruby Ribbon supports Stylists through a “powerful platform of sharable assets” that allow them to have ready access to information that is on brand and available to be shared with new and potential clients. “It just takes seconds to have a beautiful, branded message you can use,” Drankus says.
That technology will continue to be developed, Zornosa says. “Our vision for the future is one where every woman can have our curriculum available to her via her mobile phone and broken into pieces, so if she’s sitting outside of a dance studio she can take a three-minute module, and then the next time she has five minutes she can start up where she left off.” A beta program, called Connect, has already been created on a mobile platform that allows Stylists to complete tasks on iPhones. “Our hope, in the next year, is actually to roll that out to the full Stylist base,” Zornosa says. As of the end of July 2015, that base consists of more than 1,000 Stylists, and about 20 corporate employees round out the Ruby Ribbon team.
The company’s success has not gone unnoticed. Earlier this year, Ruby Ribbon was recognized in Inc. magazine’s “7 Startups That Are Radically Altering the Apparel Industry.” Ruby Ribbon also has been covered in Woman’s Day, Women’s Wear Daily and The Wall Street Journal.
A Stylist demonstrates the functionality of Ruby Ribbon apparel during a trunk show.
An Emphasis on Training
Ruby Ribbon Stylists don’t just sell at pop-up retail events in spas, homes and offices—they also do personal styling appointments and virtual events, says Zornosa. Because of this, she says training is very important. “It just takes a 20-minute session or video to teach our Stylists how to fit our award-winning shapewear, but also they can, if they choose, learn how to do personal styling, how to create a ‘cami challenge,’ or how to work with fundraisers, she says. “Training particular to our product line is very important as is training about the basics of running a successful business: managing time, mentoring women, creating sales.”
In the back office both written and multi-media tools offer training on essential skills. “We offer three to four ‘love workshops’ per month,” says Zornosa who adds that technology has been a big support of all of the training provided.
“Because of our strong financing, we were able to invest up front in best-in-class training materials rather than bootstrap the investment gradually,” notes Zarnosa. “Many of our investors’ other portfolio companies also had experience in creating multi-media training, and they brought us the benefit of that experience.”
Training helps to support Stylists’ success. They earn between 20 and 40 percent of their sales through commissions; those who build a team can earn an additional 3 to 10 percent on the sales of the women they mentor, says Zornosa. While most Stylists come to the company through referrals from other Stylists, Ruby Ribbon also uses digital advertising through Facebook and other sites to attract Stylists.
Innovating to Meet Women’s Unique Needs
Innovation in women’s shapewear has been a core driver of Ruby Ribbon’s success. As she continued to listen to the input of women about their experiences, likes, dislikes and needs when it came to foundation wear, Zornosa came up with an idea that launched an entirely new product category, which included the shapewear within the design of the clothing, not just as a separate piece worn underneath. She says, “There is no other company focused, as Ruby Ribbon is, on the juncture between the essentials that every woman has in her closet and shaping. A very important part of our product line is to bring shaping to tops, skirts, dresses and pants; we are the only company creating a full product line with shaping built into the design.”
One of the company’s flagship products is a camisole that can replace a woman’s bra, providing support while also providing shaping in a garment that can be worn under other garments or alone.
At their recent Runway conference, Zornosa says, “We embraced a big goal—the ‘Million Woman Cami Challenge.’ Our Stylists are now offering a challenge to women across the United States: Try our product for a day, without a bra. Each Stylist is offering all of the women in her circle the chance for trial.” It’s a new campaign, but Zornosa says, “The results have already been astounding.” In some cases, these others are in areas without Stylists, as she had been. Not only does the cami challenge allow them an opportunity to try the product but it’s also a potential opportunity for them to launch their own business or to make a referral to someone else.
Despite the fact that Ruby Ribbon operates in a very competitive industry, Zornosa says she’s not too concerned about competitors. “There are patents associated with our foundation-wear products that will give us a lot of protection from competitors,” she says. “With the shaping essentials products, what we have found is that this is simply not easy to do.”
It’s a model that Zornosa, her investors, Stylists and staff believe is built to last. “Strong financing from the beginning allowed me to build a ‘made to last’ company from the onset,” says Zornosa. “My investors are also board members and trusted advisors.” The introductions and other support she has received has been invaluable. There are, she says, no downsides to these relationships. According to WFDSA’s Global Sales by Product Category 2014 Report, sales of clothing and accessories, including shapewear, via direct selling is on the rise globally, with the most significant growth occurring in Belgium (44 percent), Luxembourg (30 percent), Colombia (27 percent), Bolivia (25 percent) and Peru (22 percent). Ruby Ribbon is poised to meet that global demand with manufacturing plants in the United States, Nicaragua, India and China.