Poshly Turning Big Consumer Data into a Big Deal for Beauty Products

6/19/14Follow @jpruth

It may be nice to have lots of options when shopping—until it gets hard to make an actual choice.

Poshly in New York believes it has an answer for such a dilemma in the beauty industry. The company gathers insights from consumers via online questionnaires on their needs in cosmetics, grooming, and other personal care products.

CEO and co-founder Doreen Bloch says brands subscribe to her company’s information to better understand what the market wants. Earlier this month, Poshly acquired Coterie in San Francisco, a beauty products social shopping site that helps consumers discover new brands. Bloch says that deal will help Poshly put more technology to work for the beauty industry.

When people sign up at the Poshly website, they have a chance to win product giveaways from cosmetics and personal care brands. In exchange for answering questions about their skin conditions and other personal details, users can receive samples and get discount codes for products.

For the brands, Poshly offers a way to learn more about how consumers use their products, says Belinda Chan, the company’s head of client services. She says Canada’s Skinfix, an indie brand of skin and personal care products, has been using Poshly to help plan its sales expansion into the United States. “We provided data for them to see what retail channels they should tap into and what consumers they should target,” Chan says.

Other websites, such as YouBeauty in New York, offer tips and suggestions on beauty and personal care products while also collecting data, but Poshly is quickly staking out its territory. Big players in the beauty industry, such as Estée Lauder are already among its clients. Cosmetics giant L’Oréal uses consumer feedback gathered through Poshly to help with its product development. “We can ask questions they had not thought of,” Chan says.

In asking those questions though, Bloch says Poshly aims to preserve privacy by making the data anonymous and aggregating the information that its users reveal. “We don’t have a Facebook or Twitter connect [button],” she says. These days, lots of websites ask users to share details, such as new purchases they make, with their friends, but Poshly keeps things confidential. “We don’t want to give the user the impression that if they tell us they have dandruff that their social network will know it,” Bloch says.

To that end, the Coterie.com brand will not be folded into Poshly, she says, maintaining a bit of separation between social and private info. The social shopping site has information and metadata on more than 100,000 products from more than 16,000 brands. Bloch says she wants to merge certain personal, yet anonymous, details from Poshly with features and data Coterie has. Furthermore, she says Poshly signed a deal this month to white label its software to be used by a publisher she would not disclose. “That’s going to expand data collection tremendously,” Bloch says.

Poshly is in growth mode, she says, thanks in part to closing its first funding round in the first quarter of this year. The size of the round was not disclosed, but Bloch says investors include Golden Seeds and Astia Angels. Prior to that, the company had been bootstrapped on revenue. With the funding, Bloch says Poshly hired three more engineers and there are plans to hire professionals with expertise in machine learning and data. The company also plans to launch a partnership program with cosmetics brands for an analytics platform.

Bloch was a winner in the 2012 class of L’Oréal’s Next Generation Awards. The program annually honors startups led by women founders. Through the program, Poshly got introductions to key personnel at L’Oréal. Bloch says the award also gave her company more credibility with potential clients.

Poshly was founded in 2011 with a plan to create a recommendation engine for consumers, Bloch says. She has a background in financial services, was a three-time intern at Yahoo, and thought technology could help her narrow down her choices in cosmetics. “I became fascinated by how we can use data to solve that question for consumers,” she says. While working at SecondMarket in New York, Bloch floated the idea with coworker Bradley Falk. “It got his attention as a space underloved by technologists,” she says.

Falk, who had been an engineer at cosmetics brand Bare Escentuals, became a co-founder and CTO for Poshly and is currently based in San Francisco.

Collecting the kind of data necessary for the proposed recommendation engine presented a challenge, Bloch says, since people might be reluctant to divulge personal info. So the team launched a giveaways website where people answered questions for a chance to receive beauty care products. Bloch had expected to change gears back to the recommendation engine once they hit critical mass with responses. However, brands wanted to hear more about the data collected through the questionnaire, she says, which they believed could help them promote their products in a targeted way.

For now, the recommendations engine has been tabled, Bloch says, though it remains a passion project she may revisit. “That’s where acquiring Coterie comes in,” she says.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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