PARIS — Didier Gasté hadn’t even incorporated Transaction Connect, his start-up that proposes a loyalty program using shoppers’ existing credit, before mid-September. By mid-December he had signed a deal with Europe’s largest commercial real estate group, Unibail Rodamco, to pilot the service at an upscale mall west of Paris.
Contracts signed, pilots launched, financing secured, and a whole lot of exposure: the past three months have seen doors, and checkbooks, open for the ten fashion and retail start-ups who participated in the inaugural class of Galeries Lafayette’s Plug and Play accelerator.
The accelerator has aimed to make a bridge between established retailers and start-ups with the potential to disrupt fashion and retail through three-months of mentoring, meetings, and assistance with challenges like scale and financing.
During a closing “demo day” at the accelerator’s co-working space in the 10th arrondissement, the participants showed off their progress in a series of pitches and Q&As. An audience of investors, brand executives, and fellow start-uppers were present to offer advice and encouragement — as well as tough questions.
“What’s stopping your clients from just implementing this idea themselves?” one audience member asked Gulnaz Khusainova, founder of the Dutch algorithmic sizing firm EasySize. “And how is your service different from True Fit in the U.S.?”
“We have a trove of sizing data from across all the brands we work with,” Khusainova shot back. “Even if some of our clients were to partner up it would take them months or years to catch up.”
Khusainova explained that her service is the only sizing algorithm for e-commerce that bases its recommendations on the buying history of similar shoppers, as opposed to competitors like True Fit who compare body measurements with the technical specifications of each garment.
For Smartzer, a London-based firm that makes online videos “shoppable,” the Plug and Play led to a pilot with Galeries Lafayette — the firm made an interactive holiday wish-list video where users can click to buy each item — and the experience allowed them to make in-roads with French luxury brands, who were both curious and cautious regarding their service.
Consumers are increasingly demanding that brand videos be interactive and shoppable, says Smartzer’s founder Karoline Gross — and now is the right time for luxury firms to get ahead of the trend. “These days everyone is talking about see-now buy-now, but what that currently means is see-now, and go buy it somewhere else. With shoppable video we put it all together in one place.”
Lafayette Plug and Play had meant three months of shuttling back and forth between London and Paris for Gross and her colleague Miles Rhule.“You need that face-time. It’s been important for clients to meet us in person,” said Gross. “I think we’ve stayed in every cheap hotel between here and Gare du Nord.”
For Monica Watson, a senior content manager at Chute, the experience had been slightly more comfortable.
“I’ve been staying in a lovely apartment in the Marais,” said Watson, who came to the Plug and Play accelerator to study the European market for the San Francisco-based platform for user-generated content (UGC) search.
Chute’s system helps brands search for the best posts on social media related to their brand, request usage rights from the poster, and export them to the brand’s social pages or live galleries on their websites.
The start-up — which employs around 40 staff and works with over 200 brands including LVMH-owned beauty firm Benefit and the Ritz-Carlton hotels — has found that 85 percent of millennials are more likely to make a fashion purchase based on a social media post than based on official content from the brand.
“Luxury brands are in a hard transition,” said Watson. “They’ve been hesitant to reach out through technology, but they realize that the young consumers who are coming up just don’t discover the same way; they don’t buy the same way.”
Chute is currently in advanced talks with one major luxury conglomerate to implement their service across the group, Watson says.
Igloo, an e-commerce app that uses a network of bicycle couriers to let shoppers try on clothes at home, is another start-up who launched a pilot with Galeries Lafayette during the accelerator. Around 60 references from across different departments of the store’s Montparnasse location are currently available for order through the application.
Igloo managed to catch another brand during the residency as well: the French creative fashion brand Ba&sh will be available for sale on the app starting next week.
“I wasn’t expecting that we would be able to do so much — for the start-ups and for the Galeries Lafayette,” said Charlott Dieutre, director of operations for Galeries Lafayette Plug and Play.
Over the course of three months, Plug and Play was able to bring in top executives from companies including Richemont, Bulgari, Lacoste, Chanel, Darty and FNAC. Even more companies have expressed interest in participating when Plug and Play brings in its next batch of start-ups in spring 2017, Dieutre said.
The participants in Plug and Play’s first group ranged from pre-seed start-ups which were still strugging to get their first bank loan to emerging companies which had raised as much as 3 and 13 million euro ($13.57 million). Dieutre said that three of the start-ups are getting ready to carry out additional fundraising rounds as soon as March.