PARIS — While crowdfunded projects flourish in categories such as movies and video gaming, fetching up to $40 million per business idea, fashion-related undertakings have proven less of a money-spinner.
There are exceptions. Take the 10-year-hoodie by Flint and Tinder, which raised $1,000,000 through U.S. site Kickstarter; Finnish gTie, which sourced 300,000 euros, or $413,721 at current exchange, to kick start its “attitude neckwear” for men and women on Invesdor, and smartwatch maker Pebble Technology, which made headlines scoring more than $10 million, 100 times its target, also via Kickstarter.
Still, fashion remains a small piece of the fast-growing pie.
While crowdfunding Web sites raised $2.7 billion and funded 1 million campaigns in 2012, according to Massolution, the research and advisory firm specializing in crowdsourcing, only 5.5 percent of all activities in the field were fashion-related. As fashion-focused crowdfunding platforms have tested the waters with mixed results, some have modified the concept to create an array of interesting online retail models.
Here are some noteworthy upstarts:
Zaozao: “The idea of crowdfunding is so new, we spent half our time on education,” said Ling Cai of Zaozao, a crowdfunding platform for emerging Asian fashion designers she cofounded with Vicky Wu in 2012. “In a year, we had 40 successfully funded projects with an average of $1,000 raised. But we felt it was too early in the game.”
Last March, the duo pivoted away from crowdfunding and relaunched Zaozao “as a travel-inspired online destination for the well-dressed woman to discover exotic designs a world away.”
The new e-commerce site offers one-of-a kind fashion items, including bags, jewelry and accessories, from under-the-radar Asian designers which Cai, who used to work as an assistant buyer for Gucci, and Wu, a former analyst at Goldman Sachs, have scouted.
Zaozao currently represents 15 names, and 10 to 15 new ones are added per travel destination every month.
The innovative fashion boutique also offers an online magazine with mood boards and designer profiles as well as destination-inspired content, such as art, food and music. Its social media channels provide travel quotes, insider tips and images, while its blog takes customers behind-the-scenes on Cai’s and Wu’s fashion travels. “Given [the] hunger for vicarious travel experiences, we aim to feed our wanderlusting shoppers with a constant stream of content,” says Cai.
Mimoona: Arik Marmorstein, who operates a crowdfunding platform in Israel, billed as the largest in the country, has stepped it up a notch. The young entrepreneur has come up with software that independent fashion designers can integrate into their own Web sites to measure their future clients’ interest for a given design. “This is much more than crowdfunding — it’s crowd-testing,” he said.
According to Marmorstein, one of the biggest problems designers face is spending money on the production of items that people won’t buy, which forces them to be sold at huge discounts, but “thanks to the new technology, they can put their money where their mouth is,” he said.
Launched in August 2013, the software is mostly in place on the U.S. market given its “huge potential of 20,000 to 25,000 designers,” according to Marmorstein. In the first six months, 20 designers registered, among them actress Jessica Rey, who runs her own swimwear line. Rey said she got swamped with e-mails about plus-size versions, but when she crowd-tested the idea, she realized it wouldn’t work. “If we hadn’t tested the market first, we would have likely gotten stuck with a lot of plus-size inventory that wouldn’t sell,” she told WWD. “The awesome thing about Mimoona is that it integrates into your Web site, so people don’t have to go to a third-party Web site to fund your project.”
Marmorstein is also partnering with the Philadelphia Fashion Incubator at Macy’s Center City to support emerging American designers, the first of which are slated to “go live shortly.”
Payment plans range from $49 a month plus 3.5 percent of sales achieved to $399 per month plus 1 percent of sales, allowing the user to test an unlimited amount of projects.
One challenge that remains, however, is traffic, “which is why we are currently working on another software to help generate it directly on the designers’ Web sites,” says Marmorstein. The up-starter is thinking big: “Once we have enough designers on board, we can provide data and forecast trends and sell that data to retailers.”
Carnet de la Mode: Arbia Smiti said when she started Carnet de la Mode in 2011, her initial idea was to let potential clients invest in a brand via pre-orders of future collections with a 40 percent discount off the future retail price and 20 percent in royalties. It sounded like a solid plan, before she realized that “crowdfunding is very seductive as a community concept, but in terms of business it’s limited, and still very immature.”
According to the former L’Oréal marketing and communications manager, “In France especially, people don’t invest easily, and there was a huge deception effect when the production quota was not reached. The reality is, online customers want things fast, they don’t want to wait three months to see if the product they like will actually go into production or not.”
In 2013, the crowdfunding Web site evolved into a new type of e-shop. “We now curate designers with unique collections and offer them their own online boutique on our platform — it’s like a personal corner,” Smiti explained.
Carnet de la Mode does not handle shoots or logistics like a traditional e-commerce Web site. “It’s the designers who call UPS to pick up the piece, they edit their corners, fix their own prices, write descriptions. We only moderate,” Smiti said.
The platform generates customers by partnering with fashion publications including Madame Figaro and L’Officiel. “We ask editors to promote their favorite designer on a weekly basis, show that it’s good quality and that there is a real talent behind.”
Partly financed by business angels as well as Elaia Partners, a French venture capital firm, the site takes a sales commission of between 35 and 50 percent of the retail price.
Smiti says she sifts through 100 to 200 applications every month, while only three new designers are added every week. The platform currently stocks 300 brands and hopes to go up to 700 by the end of the year. “It’s a great way for professional buyers to discover new talent, too” added Smiti, citing Galeries Lafayette and Bloomingdale’s among those who have utilized Carnet de la Mode.
I Am La Mode: Paris-based I Am La Mode bills itself as the only fashion platform in the world that accepts not only designers but every genre of fashion undertaking, from a technology start-up to an innovative magazine maker.
“It could be a blogger who wants to organize a cocktail to connect with future readers or a designer who wishes to stage a catwalk show and needs to raise money; We are the Kickstarter of fashion,” asserted Alexandre Diard, one of the platform’s three founders, adding that: “One of the most difficult things for a designer is to get started, and in France it’s difficult to get a loan from a bank, but when you can prove that you already have a clientele backing you, it’s easier.”
Launched in July 2013, the Web site sees eight out of 10 fashion projects successfully funded, while, according to Diard, the success rate on non-specialized platforms can be as low as 45 percent. “We coach the candidates and help them with communication, teach them how to make a campaign, choose the right picture and create a buzz. That’s how we are different.”
When it works, the platform keeps seven percent of the total target raised; when it doesn’t, everyone gets reimbursed.
Diard, who partners with Esmod, Modart and the Fédération Française de la Prêt à Porter to generate interest, said he aims “to get the first 100 projects funded, from there it will grow exponentially; it was the same with Kickstarter — they multiplied every year by five or 10.” And while it’s Kickstarter’s “$1 million projects that make headlines, the average amount raised is $4,000,” said Diard, “so we’re doing fine.”
Musestyle: While not born of crowdfunding, Musestyle fits the mold of innovative e-tailing. The gap between the editorial and real worlds inspired Cathy Pill to initiate the platform — powered by bloggers, models and editors — where every fashion and beauty item recommended by them is immediately shoppable, “straight from the picture, in just two clicks” Pill, a former fashion designer, told WWD.
“When I had my own collection,” she said, “I used to received piles of e-mails from people asking me where they could buy my clothes, unable to purchase the looks they fancied. And I hear bloggers have the same problem.”
Following a year of development, Musestyle launched last January. It offers Web surfers the exact same look as posted by the site’s “contributing style muse,” along with alternative suggestions, depending on the customer’s budget, while past seasons’ looks are tagged with corresponding options shoppable in the present.
As of today, shoppers can rely on the fashion acumen of 17 muses, including Alexa Chung; Charlotte Collard, founder of Soyouthinkyoucanshop.com; model Cara Delevingne, and stylist and brand consultant Elisa Nalin.
The site partners with 50 international retailers, among them Net-a-porter, Saks Fifth Avenue and Topshop. Pill noted: “It was very important for us to have high-end retailers as well as the mass market on board.”