By: Sammy Zand
“Fast Fashion” is a contemporary term used by fashion retailers to describe designs that move from the catwalk right to the stores and in the hand of consumers. Fast fashion clothing captures current fashion trends, as the collections are based on the most recent ones presented at Fashion Week in the spring and fall of every year from New York to Paris. Its emphasis is on optimizing certain aspects of the supply chain for these trends to be designed and manufactured quickly and inexpensively. This allows the mainstream consumer to buy “current” or “trendy” clothing styles but at a significantly lower price.
This has developed a product-driven concept based on a manufacturing model referred to as “quick response” developed in the U.S. in the 1980s. Fast Fashion has become a force in the retailing industry and it is seen in increasing ubiquity with Fast Fashion powerhouses like Zara, H&M, Topshop, and Forever21 leading the market revolution and becoming household names.
Marketing is key to the success of the Fast Fashion model. It creates the desire for consumption of new designs as close as possible to the point of creation. The continuous release of new products has become a highly cost effective marketing tool that drives consumers and increases brand awareness. Americans are now purchasing five times the amount of clothing that they were in the 1980s.
Most of the fast fashion brands have now gotten so big that their selection becomes overwhelming to the customer. The store is too big, there are too many options, colors, and styles, and its difficult for the average shopper to come up with an outfit. While many companies like Topshop and H&M dominate High Streets all across the globe, their first focus is in the brick-and-mortar realm. The web is an afterthought. While many of these large fast fashion companies have online stores, it still reflects the in-store experience, overwhelming the shopper. E-commerce is now filling in the gap with personalization.
A LA-based startup called DailyLook sets its sights on being a go-to fast fashion brand completely on the web. Shoppers can create a profile where they receive personalized suggestions that tailor to their size, preference, and needs. This startup has brought the styling experience and head-to-toe designed outfits, straight to the shopper’s door. While many of the fast fashion stores have online shopping available, this startup brings back a key aspect: personalized shopping.
To do that, the CEO and Founder Brian Ree, raised $2.5 million in a seed round from a number of investors, including GRP Partners, RRE, SV Angel, Novel TMT Ventures, Matt Coffin, Thomas Mclnerney, and Rachel Zoe. It carries items from other brands but it also produces its own label. DailyLook has been around since it launched back in 2011 and it has quietly been building a large audience since then.
Another online fast fashion startup that has grown in recent years is Stitch Fix. Stitch Fix launched seven years ago, and became a highly valuable and rapidly growing business proposition. FORBES estimates that Stitch Fix brought in $250 million of revenue in 2015 and was expected to jump by 50% in the next year or two. To accommodate this scale, the company has substantially increased its head count and now has 2,800 mostly part-time stylists and more than 1,000 warehouse workers across five locations. As a private company, its finances are held close to the vest. But VC Experts valued the company at around $300 million while another investor marked that up to $730 million. The company has even survived several scandals. Stitch Fix was actually found nearly tripling the prices from what is found in-stores. Nevertheless, shoppers continue to love the personalized attention they can have from the comfort of their own home.
This hits on a major key component to the success of most startups: consumer demand. More and more, consumers want products or services that are trendy, affordable, and readily accessible. DailyLook and Stitch Fix target young professional women that can get the experience of having their own wardrobe stylist but without the hassle of in-store appointments.
Prominent startups in a number of industries have capitalized on the potential of this on-demand, user-tailored model. This is further reflected in other successful startups over a number of industries. Birchbox is another personalized online subscription but for beauty and body products. Birchbox launched in September 2010 and was founded by two young entrepreneurs and Harvard Business School graduates, Hayley Barna and Katia Beauchamp. New York-based Birchbox boasts more than one million subscribers who spend $10 per month for a box of personalized beauty samples, tending to the subscriber’s online created profile. The subscriber adds information about their daily routine, hairstyle, and skin type or problems. Birchbox then sends samples that reflect each subscriber’s individual need and hair or skin type. The company is now banking $60M. Other industries include delivery services like BlueApron or Sun Basket where customers can pick meals every week and the ingredients are delivered right to their door.
There are many reasons to see a successful startup, but what DailyLook and Stitch Fix have proven is that convenient and affordable services are becoming higher in demand. Those that have thrived have done so with a unique value proposition that can’t be matched by brick-and-mortar retailers. These startups have essentially succeeded because their competition is “non-consumption.” They are taking on the consumers that aren’t even considering going into the stores as part of their leisurely day and making them into people who browse and shop online. E-commerce is still growing and most entrepreneurs would be wise to use remember the platform.