BERLIN — Service with a style-curated shopping is gaining ground in Germany, a country sometimes described by its residents as a “service wasteland.”
The trend for a blend of online retail and offline personalized styling advice originated with startup Modomoto, launched in 2011, and Outfittery, in business since 2012, which both target men. Kisura, which is aimed at women, debuted last year, and has since attracted more than 20,000 customers. These three firms position themselves in distinct contrast to a brick-and-mortar world of lackluster stock and disinterested staff, and the vast, scarcely navigable virtual shelves of Internet apparel sellers. The curated sites claim to offer services that save time and reduce hassle.
“The online shopping experience is very product driven,” said Kisura co-founder Tanja Bogumil. “What the concept of curated shopping does is basically flipping the entire system of e-commerce, by putting the customer with her needs and her characteristics back into the center of interest.”
That flip begins with an online survey that helps determine shoppers’ style preferences and personalities. Under Modomoto’s model, an initial shipment will then be prepared. Kisura and Outfittery clients receive a stylist consultation via phone before an order is shipped; Kisura also offers Skype chats. Then come the boxes — wrapped, with a personal note and two to six full outfits inside. Shipping and returns are free, and shoppers only pay for what they keep. Follow-up calls and e-mails determine missteps and suggest improvements for future orders.
Outfittery co-founder Anna Alex said her customers were seeking a solution outside the mall — some haven’t purchased clothes for a decade. “We really awaken these sleeping beauties that are there and bring them back and make shopping fun for them again,” she said. Modomoto founder Corinna Powalla is more blunt about the potholes in Germany’s retail landscape. “A few years ago you got good service in normal shops,” she said. But due to competition from online sellers and cutbacks, “they’re not really professional anymore — just students working there 20 hours a week, so you can’t really get the level of service.”
Fit is still a challenge, and the primary reason for returns. “All the other reasons that exist in fashion e-commerce — ‘I didn’t really like it’; ‘I ordered more to have a choice’; ‘I ordered two different colors, or two different sizes’ — this is eliminated by nature of our model. So sizing is the only thing that remains, and here we’re getting better all the time,” said Bogumil.
In that regard, Modomoto has an advantage. Its central Berlin “Fitting Room” lets customers who book ahead try on six or more outfits with their stylist on hand. Suits and shoes are exclusively available here — and cold beer or hot coffee are gratis.
Outfittery also sometimes opens its training space/fitting room to customers on request, and has developed a traveling “magic box” to body scan customers for better fits. This summer, the company opened a “styling lounge” in Hamburg airport providing 10-minute consultations, along with rotating specials like free shoe shines or a complimentary end-of-day beer.
The founders of the three companies are all women, and cut their teeth in the frenetic world of Berlin startups, including Rocket Internet, home to Zalando. They insist curated shopping is sustainable — since customers invest the time to fill out a profile and correspond with a stylist, they are less likely to just buy one item, and prone to return after building a relationship with their fashion-by-phone friend.
On average, the purchase the consumer keeps is 250 euros, or about $317 at current exchange, for Outfittery — three times higher than for the typical online shopper, said Anna Alex. Kisura said more than 25 percent of its buyers are return customers, including a loyal group that comes each month to purchase three to four items; an average item sells for between 60 and 80 euros, or about $76 to $101.
Not particularly brand driven, these shoppers are open to suggestions, leaving room to introduce small or up-and-coming brands.
“What we see is that the customer does not necessarily trust the brand, but trusts his stylist. So they are very open when the stylist is recommending a new brand — say you always wore Tommy Hilfiger, and now I recommend you to try [small Danish brand] Bruun & Stengade,“ explained Alex of Outfittery, which has offerings ranging from Levi’s to Baldessarini.
“Our service is focused on the combination of brands,” said Powalla of Modomoto, which has a range from Selected Homme to Ben Sherman to Pierre Cardin, as well as a number of trendy Scandinavian brands. “It’s more important to combine the right brands with the right style than just to have picked the right brands.”
It’s still critical data for building relationships. “Knowing the favorite labels of our customers is crucial information,” said Bogumil of Kisura clients, who tend to value quality over status brands. “And also the opposite — knowing the labels they just hate, reveals a lot about the style, right? Someone who likes Jil Sander will never wear a very ruffly romantic piece, or Roberto Cavalli.”
The curated concept has also found some favor with clothing brands — in contrast to traditional department stores and online shops, these sellers do not have seasonal sales or offer markdowns. Introductory offers exist, but percentage-off vouchers are rare and targeted to loyal customers. Modomoto also works with various brands to help train company stylists.
Investors have bought in. “Men are an untapped target group which wasn’t really served,” said Alex, of her firm’s appeal. In February, Outfittery raised 13 million euros, or $16.5 million, in second-round funding led by Highland Capital Partners Europe; investors include Holtzbrink Ventures and Mangrove Capital Partners.
The company added Belgium, Luxembourg, Denmark and Sweden to its rosters at the end of August.
Already active in Austria and Switzerland, as well as Germany, the firm is now the largest curated shopping portal in Europe.
Kisura, present in Germany and Austria, received unspecified mid-six-figure second-round funding from Singaporean venture capital group Brilliant Heights Pte Ltd., after securing individual investments from business angels Ralph Suda and Gary Lin and support from Investitionsbank Berlin. Eighteen months after launch, the company is profitable, has a successful collaboration with German plus-size fashion e-tailer Navabi, and is considering opening a showroom.
Modomoto, which serves more than 150,000 customers in Germany and Austria, is funded by friends and family rather than classic investors and venture capital, a choice Powalla made strategically to maintain control.
Her priority is opening more fitting rooms in German cities, rather than expanding into other countries, and to expanding Modomoto’s core offering. “There’s a lot of space left in the box,” she said.
And there are also opportunities outside of it. In July, Nordstrom said it would pay $350 million for Chicago-based Trunk Club, which has been active in curated shopping for men’s wear since 2009. Bogumil of Kisura said she’s encouraged by the deal, calling it “an excellent sign for the whole industry” of e-commerce. Both she and Outfittery’s Alex indicate they’re aware of the potential that may still lie in brick and mortar, especially as it adapts to technology. Said Bogumil, “Always stick to your core model.” Then she added with a smile, “I mean, never say never, right?”