Stevanja describes the app as being like Shopback or Cashrewards but for the premium and aspirational end of the market.
“We’re not reinventing the wheel here, we’re taking a model and making it a little bit more feminine, premium, aspirational,” she told Inside Retail.
Tapping into the US$108 billion cashback market
Digital platforms that specialise in gathering coupon codes and cashback offers have become a popular way for retailers to reach new and existing customers as the online space has become more crowded and traditional forms of advertising have become more costly in recent years.
“We definitely see that the affiliate channels that we are using deliver really great returns, and they are a very important part of our overall marketing mix,” Stevanja said about her own experience using these platforms at Stylerunner.
“They are really effective, especially in recent years, where other channels have become tougher and we’ve got less control to reach consumers. Algorithms are reducing our organic visibility through channels like Instagram, cost of acquisition is going up with more competition across things like digital advertising and also email open rates generally speaking have been declining over the last five years.”
A 2020 report on the US$108 billion global cashback industry found that cashback promotions more than tripled the conversion rate and increased the average order value by 46 per cent.
But most of the providers currently operating in this space, such as Shopback and Cashrewards, cater to the mass market.
“It’s not not always on brand for a lot of partners,” Stevanja admitted.
Creating a premium shopping experience
Her Black Book aims to change that with its minimalist design, smart segmentation and in-app magazine run by Marie Claire’s former digital content manager Grace Back creating a more premium shopping experience.
“The brands that we are putting together and the adjacencies are really important. So, for example, you can shop [by] category like designer, which ensures those designer brands aren’t going to turn up next to a microwave, or some other brands that aren’t in their same space,” Stevanja said.
“There’s a big focus on big, beautiful, compelling visuals and campaign imagery. And then there’s our digital magazine, which adds an additional layer of that fashion halo.”
The magazine serves another function as a supplementary revenue stream for Her Black Book, with brands able to purchase banner ads and sponsored content to amplify their presence in the app. This has enabled the start-up to generate revenue from ad sales prior to launch.
Her Black Book’s primary revenue stream will come from the commission it earns on sales that originate in the app. In addition, users will be able to pay A$24.99 for a 12-month subscription to get access to flash sales and real-time notifications from their favourite brands. The majority of coupon codes and cashback offers will be available to anyone who downloads the free version of the app.
“This might change over time, but we set it up to make sure it’s sustainable from day one and to make sure we can keep investing in the pipeline of technology and ideas,” Stevanja said.
Her Black Book has integrations with major affiliate channels, such as Commission Factory and Rakuten, as well as a partner portal where smaller brands can pay a flat monthly fee to upload their offers directly to the app.
Raising funds the second time around
The idea for Her Black Book came to Sasi when she was searching for a coupon code for a dress she wanted to purchase for her 40th birthday.
“She knew there was a coupon code available [for the brand] because she had actually received it in an email, but she couldn’t find it when she needed it,” Stevanja explained.
“She wasted an hour trying out 20 different coupon codes she had found online and none of them worked. And she noticed she was going to these forums where everyone was asking for coupon codes, so she saw a real need.”
Sasi took her idea to Stevanja, who shared her own observations about the lack of premium affiliate partners for aspirational brands like Stylerunner.
“She saw it from a consumer need, and I saw it from a brand positioning aspect, and together, we came up with this model,” she said.
In addition to their own investment, the co-founders have raised nearly $1 million from a number of private individuals.
Stevanja said it was reassuring to have “a couple believers behind us” after the challenges she and Sasi experienced raising funds for Stylerunner.
“We launched Stylerunner nearly 10 years ago, and in those first few years, it was very difficult, and obviously towards the end when we ultimately struggled to get that investment flowing,” she said.
“One of the challenges for any founder, but especially, female founders, is getting the right level of investment. I think this time around, touch wood, there’s definitely been a lot more interest.”
Stylerunner entered voluntary administration in October 2019 after it was unable to raise enough capital to continue operating. One month later, it was acquired by ASX-listed footwear giant Accent Group for an undisclosed sum.
It opened its first bricks-and-mortar store in October 2020, and is set to have 20 stores across the country by the end of this year. Stevanja remains involved in Stylerunner as brand director. Sasi exited the business in 2015.