- Fung Global Retail & Technology attended FashInvest, a fashion tech investment conference held at the Fashion Institute of Technology in December. FashInvest is a platform where entrepreneurs, investors and industry executives gather to network, exchange information and raise capital.
- More than 20 emerging brands pitched retail concepts at the conference. Companies presenting customization offerings, marketplace solutions and 3D fit technology were among the standouts at the conference.
- In the future, small, direct-to-consumer store formats will be prevalent. Panelists noted that the US is overstored and overmalled currently, and they predict a 50% reduction in store numbers and a 75% reduction in mall numbers over the next 25 years. Successful retailers will embrace technology and offer in-store experiences that are more personal.
- The future of fashion will be nimble, lean, smart and differentiated. Shoe designer Ruthie Davis, who won the 2016 FashInvest Fashpreneur Award, advised future entrepreneurs to focus on their product and ensure that it has a differentiator.
Fung Global Retail & Technology attended FashInvest, a fashion tech investment conference held at the Fashion Institute of Technology in December. The daylong conference was attended by investors, attorneys, entrepreneurs and industry professionals, and included a mix of pitch presentations, panel discussions and industry awards.
More than 20 companies presented pitches at the event. One panel was moderated by Daymond John, CEO of FUBU and star of the ABC hit show Shark Tank; Skyler Fernandes, Managing Director of Simon Venture Group; and Joe Rubin, Founding Partner of ARC Angel Fund. The three panelists asked presenters why their solutions were viable and different, and why investors should consider investing in them.
Customization, Marketplace Solutions and Fit Technology Companies Were Standout Themes
Customization was a theme across a number of pitches at FashInvest. Three companies offering customized consumer product solutions were Custom Consortium, a marketplace for bespoke brands and custom products; entreDonovan, which has developed a tech-based process that captures clients’ measurements and shape digitally to produce tailored custom clothing for women; and Smith & Norbu, a company that makes upscale, sustainably sourced, bespoke yak and buffalo horn eyeglasses and accessories. The company offers customers the ability to choose the material and made-to-measure glasses frames.
Marketplace solutions such as Amazon.com, which offer a variety of brands on one platform, are becoming more popular because they offer direct-to-consumer platforms that reduce retailers’ inventory and costs. At FashInvest, we heard from a jewelry marketplace called Swoonery, which presented its “luxury Tinder” platform for jewelry. The jewelry market is valued at $262 billion, and the 10 largest brands account for 12% of the market. Swoonery aggregates more than 74 brands into an online shopping experience, allowing consumers to easily view fine jewelry from multiple brands in one place.
Perfitly stood out from the crowd of presenters at FashInvest with its 3D fit and visualization solution, which allows consumers to see how garments will fit on their body via an avatar that uses the consumer’s own measurements. Each garment’s technical specifications are entered into Perfitly’s model, so that they are scalable with accurate measurements. Consumers can use Perfitly to visualize how clothes will fit and look on them prior to purchase, helping them make better buying decisions with regard to size and reducing the need to buy a single item in multiple sizes.
The Store of the Future Is a Small, Direct-to-Consumer Format that Offers Personalized Attention
Technology is enabling brands to communicate directly with consumers in a way that they never have before. Brands do not necessarily even need a distribution partner anymore; they can tell their own story and carry their own message directly to shoppers. Given this reality, there will be fewer physical stores in the future and they will be smaller than in the past. Retail stores are operating more like showrooms, and offering customers more experiences in-store, which increases the value of the store. Pirch and Peloton are two retail companies that operate tech-enabled showroom experience stores that are in line with this new format.
Smaller formats are also the future of department stores and big-box stores. The US is overmalled and overstored, according to Robin Lewis, CEO of The Robin Report, who said there are 46 square feet of retail space for every person in this country. In a panel called “How Retailers Are Embracing Technology in a Turbulent Marketplace,” Lewis predicted that 50% of stores in the US will close, and panelist Anne Marie Stephen predicted that only 300 of the 1,221 malls currently operating will still be open in 25 years.
Lewis and Stephen agreed that the shopping experience should become more personal and that technology can help to enable that experience. Scott Emmons, Head of Neiman Marcus Innovation Lab and recipient of the FashInvest Brand Innovator Award, said that getting sales associates’ buy-in on technology is essential. Emmons said that associates have to lead customers to the technology, show them how it adds value and is easy to use, and enforce that no one is going to steal their data. He added, “The sales associate is a very important part of the process, and if you leave the human element part out, it is just going to fall flat.” Lewis added that customer associates have to be equipped with personalized loyalty data, so that they can talk to customers intelligently. He emphasized that the most important part of the shopping experience is the customer associate.
The Future of Retail Is Differentiated and Customer-Focused
The future of retail will be nimble, lean, smart and differentiated. Shoe designer Ruthie Davis, who won the 2016 FashInvest Fashpreneur Award, advised that brands should have a core competency, focus on the product and become experts with regard to that product before branching out. Building a brand has great value, Davis said, because people buy brands in fashion, but she noted that there is no one size fits all for starting a company. She suggested that brands should not worry about appearances, but focus on their product and its differentiators.
Davis, who previously worked as a “cool hunter,” researching trends for Reebok, added that customer feedback and product seeding is very important. A brand can have a great product, she said, but consumers do not realize that they want that product until they see someone cool in it, which is why fashion leaders and celebrities who adopt products are very important for brands. Davis referred to this as “putting sizzle on the steak.” Davis’s shoes have been worn by numerous celebrities, including Beyoncé, Lady Gaga, Jennifer Lopez and Ariana Grande.
Emmons from Neiman Marcus said that there is no cookie-cutter solution for the customer of the future, because some customers want a two-hour fitting-room experience while others want their package waiting at the cash register. He said that successful retailers have to be in the stores today to predict what they are going to do tomorrow and that listening to customers and making an effort to continually surprise and delight them is key.
Davis highlighted that future-forward retailers will be nimble. She suggested that brands should consider having multiple and alternate revenue streams, and that they should work together and collaborate on projects in order to cross-pollinate their brands and strengths, thereby creating new strengths.