How to connect with teenage girls in cyber space - legally of course!

This is an interesting blog looking at how the fashion industry is using an existing gaming platform to make money, rather then generating content which they hope teenagers will engage with. 

How will other retailers embrace social networking and other interactive technologies to help them build their brands?

Thanks to Forbes.com for this post.

Teenagers are easy to reach if you know how to play their game.

For the fashion industry, traditionally a late adopter of technology, it has been a particularly steep learning experience even though pre-teens and teens directly and indirectly control billions of dollars in purchasing power. But a small Swedish company called Stardoll seems to have cracked the code on how to hook young girls (see Teen Market Overview).

Stardoll is an online community where girls ages 8 to 18 play with virtual dolls. They can make "MeDolls," dolls that look like themselves, or celebrity look-alike dolls. Girls can also dress themselves and celebrities with merchandise from a virtual shop in its virtual galleria called the "starplaza," and they can also network with other users on the site.

Join the discussion: Will retailers embrace social networking and other interactive technologies to help them build their brands? Tell us what you think in the Readers Comments section below.

Stardoll Chief Executive Mattias Miksche admits he didn't completely understand his market when he began heading the company a few years ago. "When I first saw the initial site I didn't really get it--like most men," he says. "But I showed it to my wife, who was 35, and to my daughter, who was 5--and they both absolutely loved it. So I figured there could be quite an untapped market there."

Today, Stockholm-based Stardoll features more than 330 dolls and tens of thousands of virtual garments and accessories. It is also the No. 1 site worldwide for pre-teen and teen girls, according to comScore. The site has over 7 million unique visitors per month and 16 million registered users from 200 countries.

Compare these numbers to TeenVogue, Conde Nast's magazine that targets the same demographic and has less than 3 million readers. TeenVogue's mission statement says: "Style-conscious girls everywhere know there's only one source for relevant fashion and beauty news communicated in a sophisticated tone with the power of the Vogue brand. In a time of expanding media choices, true authority is irreplaceable--and unmistakable."

Is it?

Stardoll, like Vogue, earns revenues from advertising. Advertisers on Stardoll include major fashion and entertainment brands such as Donna Karan, LVMH, Disney (nyse: DIS - news - people ) and Sephora. Stardoll also earns revenues from products sold in its virtual shop. The site sells between 60,000 to 180,000 items per day.

Sequoia Capital and Index Ventures think Stardoll is building an addictive destination for a prized demographic, and they have invested $10 million in the company.

Despite Stardoll's success, the fashion industry hasn't yet figured out how to take advantage of the company to help it build brands. Here's an example of how this might work.

Zara, a retailer based in Spain, launches a virtual collection on Stardoll, which becomes an instant viral hit among pre-teen and teenage girls. Let's say seven designs in the collection bubble up to the top as the most popular, each with an average following of 1.2 million girls. Knowing this, would Zara need any other focus group or market research to figure out exactly what is striking a chord with its target consumers?

If Zara becomes really disciplined, it can pre-launch each season's designs into Stardoll, collect market feedback and provide that data to its stores around the world. Zara can also do geographically targeted research through Stardoll. For instance, Zara's Florida stores can look at data for Florida consumers, while Los Angeles stores can drill down on what teens in L.A. like.

I spent a year working with the fashion industry during the dot-com heydays, and I was struck by how little science and analysis is applied in the fashion business. As a result, the industry remains a nightmare of surplus inventory, which leads to markdowns and unhealthy profit-and-loss statements that precariously balance companies at the edge of life and death.

But it doesn't need to be this way. Other industries, such as financial services, manufacturing and insurance, have embraced technology and benefited tremendously from its infinite potential. Why not fashion?

http://www.forbes.com/technology/ebusiness/2008/05/29/mitra-stardoll-retail-tech-ebiz-cx_sm_0530stardoll.html