Fresh off an estimated $100 million year and big investments in customer acquisition in 2015, the web-only flash-sale retailer is focusing on building loyalty and encouraging repeat purchases from mobile app users.

Finding and converting new customers is key for any startup web merchant looking to build a business and drive fast growth. Keeping that business running in the long term, however, requires turning a profit—and key to turning a profit is keeping customers loyal and coming back to buy and buy again.

That’s why web-only flash-sale merchant Touch of Modern Inc., No. 473 in the Internet Retailer 2015 Top 500 Guide, was engrossed in the later part of 2015 and into 2016 on customer retention as opposed to acquisition, says CEO and co-founder Jerry Hum.

“In the past it was a focus on growth at all costs,” Hum tells Internet Retailer. “Now, our focus is on profitability, efficiency and the real nuts and bolts of running a business. We were not profitable in 2015 but we’re focused on the road to it.”

Aided by $17 million in venture capital funding, Touch of Modern has grown at a rapid pace since its founding in May 2012. The merchant brought in an estimated $100 million in sales in 2015—up 233.3% from $30 million in 2014. Among its many marketing efforts, Touch of Modern has invested heavily in mobile search ads to encourage shoppers to download its app.

Key in 2015 and this year, Hum says, are tweaks to that mobile app—the prime arena to drive sales from existing customers, as app users are by far the most loyal. More than two-thirds of the merchant’s sales come from mobile, and most of those stem from its apps.

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The merchant, whose Android app is ranked No. 87 among shopping apps by e-commerce measurement firm SimilarWeb (rankings factor in number of downloads and number of active users to the app), has integrated Apple Pay into its iOS app for faster checkout. It also includes video on many product pages, and its filtering tools allow for quick product searches by price and category.

Touch of Modern is also able to notify app users of new daily sales via push notifications. Countdown clocks on product and category pages of the app display the amount of time remaining for each flash sale.

As it strives for profitability, Touch of Modern also banks on the efficiency of its fulfillment operations. The merchant manages fulfillment in-house at a company-owned facility in the San Francisco area, and in-house developers built its order management and fulfillment software systems, Hum says. This allows Touch of Modern to keep fulfillment costs low.

“With outside vendors, you pay $3 to $5 to fulfill a box,” Hum says. “For us, it’s $1 a package in terms of labor costs. A lot of companies use third-party fulfillment vendors, and that’s great for them because it’s a low initial cost, but at scale it makes sense to bring that in-house. It’s tough and expensive to switch.”

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