Citymob: from daily deals to designer dibs

Citymob has experienced booming growth since its transition from a daily-deals website to a specialist online retailer, with plans in place to expand even further.

Citymob is an invite-only online retailer which offers a number designer products for a limited time, in limited number.

The site started out as a daily-deals store in the daily-deals heyday, but has since undergone a significant shift in strategy.

However, it wasn’t an easy ride, according to Citymob co-founders Luke Jedeikin and Claude Hanan, as the site had its fair share of obstacles to overcome.

The Citymob founders, by their own admission, tackled the online retail space with no previous experience in the field – and as such, had a tough time adapting their business model to move away from a market flooded with daily-deals sites.

Luke Jedeikin
Luke Jedeikin

Shifting Focus

Aside from the logistical issues involved with changing focus, the transition to a retail store wasn’t completely smooth, and the company saw a dip in revenue and customer numbers in December 2012 as the new direction kicked off.

Since then, however, the site has experienced almost viral growth, flourishing from the 5,000 dedicated users who stuck around at the start of the site’s revamp, to a massive 200,000 users who now visit the site regularly.

This growth, according to Jedeikin and Hanan, can be attributed to the way the site communicates with users and the way it handles its products.

The site’s 3-point strategy is founded on the principle of “curative, urgency and scarcity”: to offer specifically-selected products (curative) made available for a limited time (urgency) in limited number (scarcity).

Claude Hanan
Claude Hanan

The price of loyalty

More importantly, the strategy is working, and the business is turning a profit which gets reinvested into the company.

Customer value has increased significantly, the co-founders said, from about R65 per user in the discount deals days, to customers who now spend upwards of R500 each time they visit the site.

They key, Citymob said, is loyalty. Customers are returning – and the time between visits is decreasing.

According to Jedeikin and Hanan, customers who use the platform over three times tend to spend ten times more on average than “in-and-out” visitors.

Gaining loyalty is part of the company’s investment strategy, with a lot of investment going into developing the site’s platform to provide a customised approach to giving customers what they want.

According to the Citymob heads, the plan for 2013 is to boost its user base, with a target of 700,000 – 800,000 users pegged for the end of the year.

The company plans to boost its product offerings – giving customers access to more exclusive designer products – and to focus on its logistics (processing and delivery) platform.

Citymob currently employs 28 people, and is on the hunt for 3 more web developers to join their team.

Citymob team
Citymob team (click to enlarge)

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