New York Fashion Tech Lab Connects Retail to Crucial Innovations
Amazon is fundamentally disrupting how and where we shop, but in-store retail still has life in it.
The Seattle e-commerce giant is “a hefty competitor, but that doesn’t mean brands and retailers don’t have the ability to fight back,” says Kay Koplovitz, co-founder and managing partner of Springboard Growth Capital in New York.
In fact, she points out that, as of last year, online retail sales made up only 13 percent of total sales, according to data from the U.S. Commerce Department. “There is still plenty of heft in traditional retailers,” she says.
Still, Koplovitz concedes that, to continue to thrive, retailers and brands must be smarter and faster in adopting new technological tools that will enable them to stay relevant in a fast-changing e-commerce environment. (While online sales are a relatively small fraction of total sales, the category represents nearly half of the total growth in retail spending in 2017.)
Koplovitz has a front seat to these changes as co-founder of the New York Fashion Tech Lab, a Springboard program that helps retail tech startups connect with industry. The program—don’t call it an accelerator, she says (more on this later)—last week graduated its fifth class of startups. Springboard focuses on supporting women entrepreneurs, and all startups in the Fashion Tech Lab classes have at least one woman among the founding team, Koplovitz adds.
“Retailers are now asking for specific technologies that they feel they lack, and the startups are marrying that up with needs of retailers and fashion brands,” she says.
As she guides innovators aiming to work with the retail industry, Koplovitz draws on a long track record in media and retail, two industries that have been profoundly changed by technology. She was the founder, chairman, and CEO of USA Networks and a board member of Liz Claiborne/Kate Spade & Company and publishing company Time Inc.
Right now, the “holy grail” is to use artificial intelligence and visual search technologies to find the shoppers who want their products. For example, Google’s Lens blends augmented and virtual reality with camera and search technologies, which allows a user to take a picture of, say, a dress or pair of shoes someone is wearing and find out the brand, style, price, and even, perhaps, where to purchase the item. It does this through a mash-up of augmented and virtual reality technologies with camera and search capabilities.
“This is improving their ability to identify who their potential customers (are) and bring them in,” Koplovitz says. “This is the integration of in-store and online.”
There are other technologies, too, that are being adapted to the retail sector beyond customer acquisition. Koplovitz says the Fashion Tech Lab has worked with startups in manufacturing such as Sundar, which has digitized the process of sourcing textiles, embroideries, and other clothing components globally. Shimmy uses AI and robotics to make the manufacturing process more efficient, giving retailers and brands “time and energy to spend on design and marketing,” Koplovitz says.
Another interesting startup that went through the program is Zeekit, which uses mapping technology developed by the Israeli military to apply it to a person’s “topography” in order to see which clothing items fit best. This is a major concern of retailers since returns are costly—$351 million in lost U.S. sales in 2017, or 10 percent of total sales—especially in light of unlimited returns policies.
Koplovitz also points to lab startup EON, which is developing a digital identity for garments using RFID technology in the thread itself. “It can tell the brands and retailers when it was bought, and connect it to the purchaser,” she says. “It can follow the garment through its life cycle through washing and wearing to find out how the product is being worn.”
Koplovitz says Springboard saw the need for retailers to be better connected to new technological tools about six or seven years ago, with the proliferation of smartphones and tablets and how consumers were turning to those devices to shop. “Legacy retailers were struggling to keep up,” she says.
The New York Fashion Tech Lab launched with its first cohort of startups in 2014. Koplovitz says the lab operates as a non-profit; it doesn’t take equity in the startups in exchange for investment. Each startup pays a fee to access the lab’s classes, events, and network, she added. “If they don’t pay something, they won’t take the advice; they won’t value it,” she says.