E-Commerce Startups Open Door to Endless Virtual Closet

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here. I think I would reduce the number of accessories I’m offered. At my current subscription price of $79 a month, the service isn’t cheap, but I’m intrigued to see if the algorithm gets more precise in its suggestions. There’s something fun about having an online stylist send you new clothes to check out, so I will likely give it another month.

That sort of personal service is also attractive for groups that might not have as much choice available in traditional stores. Gwynnie Bee, which was founded in 2011, offers a subscription service for women’s clothing in plus sizes (10-32), a growing but generally underserved market. (In January, the company began providing some clothing in sizes 0 to 8.) Gwynnie Bee has raised about $100 million, according to TechCrunch.

What’s also interesting about Gwynnie Bee is that it has packaged its e-commerce software and began licensing a white-label version to traditional retailers. Publicly unveiled last month as CaaStle (Clothing-as-a-Service), the software has been used over the last year by Ann Taylor for its Infinite Style program and New York & Co’s NY&C Closet—which are both rental clothing subscription programs.

“They use our logistics infrastructure; we’re the fulfillment end,” says Christine Hunsicker, Gwynnie Bee’s founder and CEO. She adds that standardizing such processes can help traditional retailers connect with more potential customers.

In addition to providing technical expertise, Hunsicker says she also ends up serving as a bit of a coach for traditional retailers taking the plunge in this niche of e-commerce. “The biggest issue for retailers is: will this cannibalize existing business” and take money out of in-store shopping? “We have data now that that is not the case, that we are increasing the share of wallet that goes to retail,” she adds.

The other benefit for retailers, whether in store or online, is that renting clothing could cut back on returns, which decrease revenues and are expensive to process.

More than 40 percent of retailers reported an increase in “intentional returns”—buying the same item in different sizes or styles to see what fits best and then sending back the rest, according to a study by Brightpearl, which surveyed 200 retailers and 4,000 shoppers in the U.S. and the United Kingdom. Brightpearl, which has offices in Austin and London and makes back-office software for retailers and wholesalers, says since customers expect free returns when shopping online, they tend to order on average five extra items each month.

But that cost U.S. retailers $351 million in lost sales in 2017, about 10 percent of total retail sales, according to consultancy Appriss Retail.

“You can test out trends and wear it, without having to buy,” says Fox at LeTote.

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