The impact of technology on fashion - 22/10/14❰ Back
Fashion is one of the last industries to be fully disrupted. Online retail led the way in the last decade, transforming how we buy fashion forever, but today’s innovative technologies go far beyond the internet as a shop window, from wearables, through social shopping apps to 3D printing.
Apple’s appointment of the former CEOs of both Burberry & Yves Saint Laurent suggests that the tech giants are taking the marriage of technology and fashion very seriously. At the other end of the scale, investors are increasingly getting involved with early-stage fashion tech companies. Close to home, the Cambridge Satchel Company announced £12.7m investment this year from Index Ventures, the backers of ASOS and Net-A-Porter, and most major VC firms now have at least one fashion start-up in their portfolio.
But what are the key trends and which innovations have the staying power? We talk to three experts in the sector about the opportunities and challenges.
Digital advisor, investor and futurologist Inma Martinez has created strategy for fashion retail and luxury brands worldwide. Inma is described by Fortune and TIME as one of Europe’s top talents in social engagement through technology and by Red Herring as one of the top 40 women in technology. Currently CEO of Swoon Media, creators of social shopping app, favr.tt; and Advisory Partner at Opus Corporate Finance, working with technology, ecommerce and fashion companies, Inma is a mentor at Central St Martins University of Arts London, and is involved with the British Council and British Fashion Council supporting emerging talent in fashion and design.
Serial entrepreneur Sarah McVittie was one of the first tech entrepreneurs disrupting the fashion industry with her company Dressipi, an innovative discovery and online styling service that she co-founded in 2009. Dressipi helps customers find clothes that match their ‘digital fashion fingerprint’, using an algorithm to make context-aware clothing recommendations to suit mood and occasion. The company attracted former M&S Chairman Sir Stuart Rose to the board in 2012 and appeared in Vogue as one of the 100 best places to shop online. Prior to Dressipi, Sarah’s first venture was the Cambridge success story, Texperts, the world’s first text message question answering service, which she co-founded in her early 20s and built to a multi-million pound exit in 2008.
Irena Goldenberg is a co-founder and Partner with Highland Capital Europe where she focuses on growth-stage investments primarily in consumer internet and application software. Irena joined Highland Capital Partners in 2007 and helped launch Highland in Europe. She is chairman of the board at eGym, and involved in the investments in Outfittery, Privalia, Spartoo.com and wooga.
Trends, innovations & the personalisation of fashion retail
What are the key trends at the intersection of technology and fashion?
“What started trending about two years ago, the need to engage with customers via social media has taken a different shape in fashion, as this is an industry that covets and preserves with intense ownership assets such as brand value, heritage and customer perception. What works for some consumer brands, Facebook for example, is not appropriate for fashion at all. The big designers, the big Houses, have taken Instagram by storm, almost completely disregarding Twitter and other social content. Instagram works well because it is a one-to-many publishing channel, precisely what fashion wants: a controlled, edited environment to continue building aspirational values.”
The personalisation of fashion retail is sparking the creation of innovative software platforms and increased VC investment. Which companies do you see as leading the way in this space?
“A new entrant in the market that I believe is creating one of the most interesting propositions for investors and fashion clients is hiphunters.com, a fashion platform that is able to offer brands not found online, thus offering a market place for up and coming niche brands in the top tier fashion markets, Italy and France, and some new entrants from the rest of Europe that stylists and fashion editors are beginning to proclaim the “next big designers”. The online shop envelops their customers with an online editorial focused on niche designers, stylists’ picks and extremely well produced content. Online fashion is not about selling clothes: it is now able to sell couture at full prices, if the right online environment is created. What started as a business of “flash sales” is now a full-fledged business able to sell luxury goods online to discerning customers worldwide. And this is the business that leaves the best margins and investors know it.”
Wearable technology blurs the line between technology and fashion, from smart watches and jewellery to neurosensor fabrics. Where are you seeing the main innovations in wearables?
“Scent is the next frontier, and here in Cambridge we have incredible innovators like Professor Jenny Tillotson, who has become one of the leading “scentsory” R&D innovators internationally. Still, hardware needs to shrink a bit more towards nano components and microchips that can truly be embedded into jewellery, buttons and other haberdashery that will create a seamless connected environment via garments and accessories. The trend that I predict, which departs from the quantified-self that investors like Esther Dyson have passionately supported, is well-being and self-healing, wearables that will help soothe the mind and the stress of daily life, conductive fabrics that will warm or cool you. That is the type of intelligent fashion that I have mentored and continue to do so here in Cambridge and at Central St Martins.”
We have seen companies such as UnitedNude recently launching the 3D printed Float shoe. What impact do you think 3D printing will have on the fashion industry?
“3D printing is the joy of hobbyists: you create and you print and then you use it yourself. Where I believe it will stop being the fun that it is now is when some small companies will try mass-3D print for customers and the quality and/or safety of materials will need to be regulated to ensure customer compliance. As a cottage industry of self-serving is great and harmless. If it becomes a new channel for mass production, it may not work as such. It is an excellent alchemist tool of the new age but it is still the tool of creators, of prototyping, not the machinery to mass produce.”
What do you think will be the main developments in this sector over the next 12 – 24 months?
“Wearables for well-being is definitely my bet.”
The CEO story – Sarah McVittie, Dressipi
What motivated you to set up Dressipi?
“I started Dressipi in 2009 with Donna Kelly, who I met whilst I was running Texperts. Donna was managing sports & fashion for IMG and was looking to leave. I had a big interest in data and technology and had noticed that retail was selling more online, but very few retailers were servicing the consumer. It was all about pushing product. Fashion was one of the last industries to be disrupted and we could see that very few retailers were using technology in the way that we wanted to.”
“This was an idea that Donna & I kept coming back to, then one day I was in New York working for KGB, the company that bought Texperts, and I went into a store and a stylist put me in a fitting room with 5 outfits, none of which I would have chosen myself. On his recommendation I ended up buying all 5 outfits and the experience inspired me to do this technically.”
“We want to empower women to look and feel great, but it is also about helping the industry to be more efficient.”
Can you tell us about how Dressipi is disrupting fashion through technology?
“Dressipi is marrying tech and fashion by combining online tools with the expertise of leading fashion stylists and journalists from top UK magazines, newspapers and high street brands, to ensure customers make smarter shopping decisions. We create a digital “fashion fingerprint” for each customer based on descriptions of four favourite items in their wardrobe. We have in-house tech team and stylists, working incredibly closely. The stylists make recommendations, the technologists build the algorithm, and we then refine. We knew that we couldn’t build a service this disruptive in fashion without having in-house style experts.”
What have been your major challenges?
“The problem we are trying to solve is a very complex one. Fashion is very emotive and very seasonal. There are trends. Plus, as a woman your body changes with children and lifestyle. It is a very dynamic space and far more complex than we had appreciated.”
What was it about your business that attracted Sir Stuart Rose, and what value do you feel he has brought as Chairman?
“Stuart liked the idea and the team. He knows old retail. He IS old retail. He understands the customer completely and has been a huge help in terms of how to present the business to retailers, whilst we give an insight into data and new ways of operating. Stuart is a great mentor and always available at the end of the phone.”
Your technology is now being used by the Arcadia Group. Can you tell us a bit about that?
“Our technology is being used by a few retailers; Arcadia Group, M&S, Shop Direct. All use the technology in ways to personalise their offering. We were approached by retailers to license the technology and we are now getting very consistent results, so it is a very compelling proposition.”
Can you tell us more about how technology is personalising the shopping experience?
“If we look at the high street, this is the direction that innovation is heading. Shoppers can go online and create a “fashion fingerprint” and I believe that should be portable. The aim is that you walk into a retailer, scan a barcode and the app tells you the dress will go well with that jacket you bought two weeks ago. We have to tread a fine line with how we use the data and be respectful of privacy, but this will make your experience of shopping easier and more pleasurable. Shops will still exist but it will be far more about experiencing the brand.”
What’s the future for Dressipi?
“We have big retailer launches over the next 6 months so that is our main focus. Currently 1.5m women have their “fashion fingerprint” with us. We are collecting millions of data points. We have the explicit data from the start and also the dynamic data as the relationship progresses. A big question is how we can use that data to improve the user experience.”
“Currently women show us what they like and we make recommendations based on that information, but there are women who are unsure of what they like and what to buy. Once we have built up the trust, and that is a complex journey, we will be able to recommend in this way. It is a case of understanding how we can build the technology to do this.”
The investor perspective – Irena Goldenberg, Highland Capital
Can you tell us about Highland Capital’s criteria for investment?
“We focus on tech growth stage investing, working hand in hand with exceptional founders that have achieved a meaningful scale, often in a very capital-efficient manner, who see the opportunity to bring on outside capital to accelerate their ambitious goals. We are looking for teams that have achieved exceptional revenue growth and are operating in a deep end market. We identify strong operators and smart technology leaders and reach out proactively. This enables us to build a relationship with the team and perhaps be helpful to the entrepreneur before we make the investment decision.”
What attracted you to MatchesFashion.com and Outfittery?
“The reality is that it is tremendously hard to make it big in online fashion. You need to get so many things right, from purchasing and curating, to logistics and warehousing, to online marketing and customer analytics. Intuition is not enough – you need to be able to harness data to make iterative decisions while building a loyal customer base. We look for companies that are survivors, with teams that have proven their ability to execute, build and re-build a strong technology backbone, that have a long-term vision for their product or service…that have accomplished all that on a shoe-string budget. We are looking for these exceptional, relentless entrepreneurs and have been fortunate enough to work with the likes of Tom and Ruth from MatchesFashion, and Julia and Anna from Outfittery.
We were incredibly impressed with Julia and Anna of Outfittery and their vision for taking the hassle out of shopping for men. Menswear in Europe is a $100 billion category. Most men do not love shopping. Thanks to cutting edge technology and a killer logistics operation, Outfittery allows men to do what they’ve always wanted: look great without thinking too much about it. We were impressed by Outfittery’s loyal customer base, and the genius behind combining personal stylists with predictive technology to take the pain out of shopping. Outfittery’s explosive revenue growth and growing loyal customer base encouraged us to understand the opportunity and ultimately invest.”
What do you see as the future trends at the intersection of technology and fashion?
“Rent the Runway, one of our US investments, allows aspirational consumers to rent incredible fashion brands for a special night out, including dresses and accessories. The founders have brought the Netflix rental model to high end fashion, and convinced the brands that this is the way to reach the next gen customer. By making high fashion more accessible, brands build a loyal following early and are able to detect fashion trends from a broader base of consumers.”
“We see more and more brands having a direct dialogue with their fans and customers. Our investment in Brighton-based Brandwatch, the leader in social media analytics is a bet that this dialogue will get more sophisticated and personal over time. Brandwatch’s deep tech enables brands, including fashion brands, to monitor and analyse engagement around the world, providing insights to the whole organisation.”
“The other interesting trend is Wanelo: Want Need Love, which is social fashion discovery on steroids. Incredibly successful on mobile, the Wanelo community posts fashion products and the technology does the rest. The company is really feeding into the desire to discover and contribute to the conversation. What is commercially interesting in the ability for the user to click through and purchase anything they discover. It is a very savvy business proposition.”
Bailey Fisher Executive Search is an independent executive search firm specialising in building the boards and senior management teams for ambitious companies in the technology sector. The company operates internationally from offices in Cambridge and London. Bailey Fisher will be hosting a panel discussion on the Impact of technology on fashion in Spring 2015. For more information, please contact firstname.lastname@example.org
This article appears in Cambridge Business Magazine, Nov 2014 issue (pages 60-63).❰ Back