Key takeaways:
Retailers look to fashion-tech startups to help solve problems; the New York Fashion Tech Lab works with retailers to make partnerships.
Recurring trends, like personalisation and 3D design tools, indicate where the fashion industry is investing in technology.
Overall, fashion-tech is a category on the rise as more solutions for retail crop up.
Among the innovations that are top of mind for legacy retailers: algorithmic personal styling, 3D design tools and amateur fit models.
The New York Fashion Tech Lab acts as a matchmaker between growth-stage tech companies and a group of retailers who pay to sponsor it. The NYFTLab vets potential companies, then participating retailers — who this year include LVMH, Macy’s, Kohl’s, Estée Lauder Companies, PVH Corp, Perry Ellis International and American Eagle Outfitters — collectively interview and vote on the eight that are accepted.
Because of the buy-in from multiple brands at once, the accepted startups and their areas of focus provide insight into retailer pain points at a time when brands are hesitant to reveal weak spots.
“Even before we select and announce each year's cohort, we are able to see clusters of themes via the application process,” says NYFTLab managing director Jackie Trebilcock. In the past, she says, categories like wearables, chatbots, augmented reality and virtual reality and fit-tech have been popular. Some — like wearables — “trail off”, while others — fit-tech, data analytics and visual search — are persistent, in part because no single solution has proven dominant. “No one has figured [fit-tech] out yet. It’s a pain point for consumers and retailers, and because fit is proprietary, it’s hard to standardise,” she says.
Unlike incubators and accelerators, the goal of NYFTLab is not to help launch startups but to bring them together with retailers. Many of the companies selected to participate in the NYFTLab have already graduated from brand-sponsored incubators and accelerators. Farfetch, LVMH, Target, Walmart, Kering, Yoox and Nordstrom are among the many retailers that have experimented with independent startup programmes. Non-fashion programmes like Y Combinator and Plug and Play, meanwhile, are seeing increases in fashion and retail participants.
NYFTLab’s accepted companies tend to be more “corporate-ready” than startups participating in incubators or accelerators, and have already found success working with smaller brands, Trebilcock says. They are also increasingly international startups looking to partner with US companies. Rather than mentorship, the three-month programme is designed to facilitate partnerships; each retailer is expected to meet with at least two out of the eight companies accepted.
Notable past startups to be accepted include chat-based commerce startup Jumper.ai, whose clients now include Disney and Unilever, and circular economy platform Eon, which has worked with brands ranging from H&M to Gabriela Hearst.
Levi’s, which has been a participant since last year, independently partners with a range of accelerators, VCs and startups, says Brady Stewart, senior vice president of digital at Levi Strauss Americas. The NYFTLab allows the San Francisco-based company to connect with talent from the East Coast and other countries. “We believe strongly in the ‘test and learn’ model of innovation, and we scale our relationship with the top performers,” Stewart says. She says that key technologies on the company’s radar include recommerce, visual search and social commerce.
LVMH’s Alex Montefalco, who is head of executive recruitment and market intelligence, North America, says she appreciates the programme's diversity of startups, global reach and focus on women founders. “What we have found to be very rewarding is that our company representatives first see these ideas written out, and then we get together in a room full of partner companies to hear the in-person pitches. It’s wonderful to see the ideas come to life,” Montefalco says. “Witnessing this evolution affords us a clearer idea of which maison would make the most sense for the cohort to connect with.”
Perry Ellis signed on in 2018. “We saw the need to have someone to be able to search and talk to the startups that have new technologies that can help streamline our processes, and this programme is a great way to get to know the companies that have solutions that we can pilot,” says Isaac Korn, director of innovation at Perry Ellis. “The key problem we are always seeing is how to get our clients more engaged with our brand.”
By parsing through the main themes and commonalities uniting NYFTLab’s 2020 class of startups, patterns emerge that hint at what areas brands are most interested in fashion tech.
Personalisation and predictive analytics
Analytics and personalisation software allow brands to create and recommend products that are a better fit for customers, helping retailers to move away from discounting to push sales. They also help brands become more sustainable by producing fewer items that sell better, Trebilcock says.
Paris-based forecasting agency Heuritech, for example, is among those accepted to this year’s NYFTLab cohort. It analyses data to help companies like Louis Vuitton and Dior both predict product trends and anticipate how they will behave in future seasons, and recently won the LVMH innovation award after participating in its Paris-based Les Maisons des Startups programme. Meanwhile, Farfetch Dream Assembly recently accepted Brandpoint Analytics, which uses customer lifestyle data to help brands optimise price.
Technology that can personalise a customer journey helps recreate the type of recommendations that are possible in physical retail, says Korn, of Perry Ellis. “When consumers come to our website, we want them to feel that we're talking to them directly. It’s very important for us to be able to talk to companies that can enhance that e-commerce journey.”
That’s partly why he plans to meet with Becoco, a London-based platform that helps retailers scale personal styling based on a customer’s size, shape and preferences; it can be used by both customers and store associates in-store and online. It is among the NYFTLab 2020 cohort after graduating from Dream Assembly.
Another NYFTLab 2020 participant is Sozie, a London-based startup that shows customers how clothes look on people whose body measurements are similar to theirs. Store associates or roving freelance fit models (called “Sozies”), photograph themselves in garments and share their measurements and size so customers with similar figures can gauge fit. Trebilcock compares this to Rent the Runway’s popular feature in which customers share images of themselves in various items. Sozie has also previously participated in Dream Assembly and Techstars, Target’s incubator, and counts both Target and Adidas as clients.
The in-store experience
In addition to providing offline-style experiences for online shopping, retailers are experimenting with ways to use digital tools to aid stores.
NYFTLab 2020 participant Hafta Have, for example, is a Los Angeles-based company that helps physical retailers generate data and revenue through SMS. Customers can, for example, take a photo or scan a tag to find out more information or add the item to their digital cart in the store, and the brand can later retarget them with product-specific text messages. A pilot with sunglasses store Chilli Beans, for example, allowed the brand to replace “on-sale” signs with personal text message promotions. And Mirow, which recently graduated from Dream Assembly, offers smart mirrors that help stores collect customer data.
Retailers are increasingly adapting technology created for other industries. “When we first started, a lot of companies were clearly made for fashion, but we are seeing a rise in companies that didn’t start as fashion-tech companies,” Trebilcock says. She points to NYFTLab participant Futureproof Retail, a New York-based startup that began by offering grocery stores a “scan and go” mobile checkout platform — a customer journey currently being tested and used by Amazon — and has expanded its offering to fast fashion retailers, where a customer checkout is similar to scanning a QR code.
Circular economy
Luxury and retail brands are increasingly partnering with tech platforms to test rental, resale and other circular models. Farfetch, for example, recently launched a clothing donation programme with secondhand clothing donation service Thrift+ after it graduated from its London-based accelerator, Dream Assembly. Dream Assembly has also worked with fashion rental service Panoply and pre-owned clothing service Material World.
This year, NYFTLab’s circularity startup is Reflaunt, a Singapore and London-based platform that lets luxury fashion brands offer resale. Customers get rewarded with brand credit or cash when they consign an item from the brand through Reflaunt. After partnerships in Paris with brands like Ba&sh, participation in Les Maisons des Startups and support from Balenciaga CEO Cedric Charbit, the company is working on expanding to the US.
3D and virtual reality
Levi’s recently partnered with virtual reality platform Obsess, which participated in the NYFTLab in 2017, to experiment with AR and VR. This year, it can meet with startups Zoomlook and Change of Paradigm.
Zoomlook is a New Jersey startup that lets retailers offer seemingly limitlessly high-resolution product imagery online, without the need for brands to upload high-resolution images. This is done through what it calls “photographic virtual reality”. In addition to letting customers zoom in to view high levels of detail, it captures data on which items or portions of an image a customer focuses on. “It’s providing the customer with different feedback that he didn't have before to be able to make a decision and make a purchase faster,” Korn says. “When people go to your website, you want the most adoption that you can get, so it's another tool to be able to provide that sort of adoption.”
Change of Paradigm is a Paris-based service that helps brands create and distribute 3D content, which is useful in both product design and prototyping, and increasingly used in AR and VR experiences. It previously participated in both Dream Assembly and Paris startup co-working space Station F. “It's amazing because we've been on a journey for the past few years to virtualise all of our garments in 3D,” Korn says. “We see a workflow that can become more efficient if we do approvals in 3D virtualisation rather than doing all the approvals with physical samples, and we can also leverage those 3D assets in different types of interactions.”
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