The founders of the Spring fashion app are doubling down to compete with department stores and Amazon — and have made a number of recent hires in the process.
In two years, the direct-to-consumer digital marketplace has grown to 1,300 brands, including Marc Jacobs, Helmut Lang and Coach, and gross merchandise volume has been up 20 percent each month compounded since January, with more than 800 percent year-over-year growth.
That is largely because the company operates as a tech company in the fashion space, said new president Marshall Porter.
Spring began as an iPhone app in 2014, and it connects fashion brands directly with customers, somewhat like a digital shopping mall — but even that positioning, Porter said, has a somewhat negative connotation. The brands on Spring are in charge of fulfillment — Spring doesn’t hold inventory — while Spring provides the technology, which integrates with a brand’s existing e-commerce platform. Spring generates revenue by getting a portion of the sales price of each item. Meanwhile, the brands get data insights that have become retail gold for many.
When Porter came on board from Gilt in January, he couldn’t believe no one had built something like Spring, but as it turns out, creating a “cold-start marketplace” with no supply and no customers “happens to be really hard to build,” he said.
To date, it has raised at least $32.5 million with backing by Chinese textile mogul Silas Chou, Coach chairman Lew Frankfort, the Arnault family’s Groupe Arnault, Google Ventures, Wendi Murdoch and Ashton Kutcher’s Sound Ventures.
In a saturated market in which people spend their time in about five apps, Spring faces competition from all sides: department stores and Amazon are the most obvious, but even Pinterest, Facebook and Instagram are increasingly enabling shopping within their own apps and aim to be mobile commerce engines.
Momentum on the app has snowballed because brands want higher margins and access to customer data, Porter said. Unlike with a multibrand retailer such as a department store, a brand on Spring can see who the customer is and what other brands that customer is buying. “They might think she’s a 40-year-old woman, but she’s really 29,” he said. “We want to be that innovation platform for brands, because brands are not technology companies.” Spring’s customers also tend to be younger, with 70 percent of them between 25 and 40 years old, while department store customers tend to be aging out.
Porter argues that the service can compete with Amazon in both convenience — Spring provides free shipping and free returns, in addition to checkout with Apple Pay — and in what Porter calls customer “touchpoints,” like sending a handwritten letter to first-time customers.
“You don’t want it to come in a box that’s brown,” he said. “You want it to come in the black box with the tissue paper, and you don’t want your Marc Jacobs to be delivered with your Tide. Brands are sensitive to that.”
In the past few months, Spring’s made a number of hires from the worlds of fashion and technology, with a total of 110 employees: vice president of editorial Melissa Liebling-Goldberg, from People.com, Gilt Groupe and PopSugar; head of public relations Jill Borkan, who came from Ralph Rucci; fashion partnerships head Olivia Perez, who is founder of Friend of a Friend and has worked at Glossier and Moda Operandi; and vice president of engineering Tim Sturge, who comes from Zendesk.
Going forward, Porter is maintaining a mobile-first mind-set. The company was one of the first to pilot a chatbot for shopping on Facebook Messenger (it’s set to release a second iteration in the near future), and just released an iMessage app that lets users share items with friends before purchasing within iMessage with Apple Pay.
“I don’t think that offline shopping will ever die, but the shift to mobile is here,” Porter said. “It’s slower than we thought it would be, but it’s happening.”