Business Plan Challenge

May 18, 2014

Fitting Room Social aims to change way women shop online

More than a fashion app, Fitting Room Social is out to answer the question, ‘Will this fit me?’

Brad Liff’s inspiration for starting Fitting Room Social was his wife, who was frustrated with buying clothes online.

But as a finance guy, he quickly understood the numbers behind the problem he was trying to solve: Online apparel sales are coming in at $50 billion annually and growing at almost 20 percent a year. Yet returns of clothing are unacceptably high — up to 30 percent. About 70 percent of those cite “fit” as the reason for the return. Crack this problem, he figured, and he could help millions of shoppers and retailers.

Fitting Room Social provides a full-service e-commerce platform designed to help women answer the question, “Will this fit me?” The plan to bring this platform to the masses won second place in the Miami Herald Business Plan Challenge Community Track. “Fitting Social capitalizes on the growing trend of online shopping while directly addressing the problem relating to shopping for apparel — uncertainty about fit. I also liked that the business has the ability to generate revenues from a number of sources,” said Challenge judge Annette Franqui of Forrestal Capital.

Fitting Room Social was also the People’s Pick winner in the community track, attracting 1,488 votes in the online contest.

“It’s been a crazy path, starting with an idea, some friends who believed in it enough to fund it, lots of iterations and validating our thoughts on what it would take to solve this massive problem,” said Liff, a former investment professional most recently with Bayside Capital, the distressed investment affiliate of H.I.G. Capital. “The biggest challenge has been truly understanding the problem, really digging in to the psychology that underpins this problem.”

While most shoppers who return items cite “fit,” what they really mean is that it doesn’t fit as they’d like it to, he said. Through focus groups, usability studies and talking with potential customers, Fitting Room Social learned what goes into online clothing purchasing decisions.

“We found some women like size charts and the numerical approach, some like the comments section, some women won’t trust anyone but their best friend. And so when you have a solution that is designed to be optimal, you need to make sure you are addressing all the ways women make purchasing decisions. That’s much more about the psychology of the female shopper than it is about getting to the right equation. … We are empowering consumers to make better choices.”

Once he and his team completed initial research and tested the idea with the target market of 18- to 26-year-old females, they set out to build the infrastructure. To do so, they partnered with Rokk3r Labs, a Miami Beach-based technology portfolio company that works with entrepreneurs to launch their products to market.

Said German Montoya, co-managing director of Rokk3r Labs, “Brad has an ambitious idea with lots of technological sophistication that ultimately seeks to solve one of the oldest and most shared problems in the fashion world, the fit. And not only in terms of the right size amongst brands, or the right fit for each body type, but also in terms of style and individual expression.”

Fitting Room Social, now a team of six and growing, already has significant traction. It has raised seed financing of $500,000. The infrastructure for the platform has been built, as has version 1.0 of its application and version 1.0 of its API, or application programming interface that allows the technology to be used by others. The API is in beta testing with a couple of retailers. “Building, testing, learning, repeating — we’ve accomplished a lot and we’ve got a lot more to accomplish in the future,” Liff said.

The consumer app, available as a mobile-ready Web application and as a native app for the iPhone, launched about four months ago and has already attracted more than 2,500 users. With it, “women get amazingly accurate recommendations about which of their favorite looks are going to fit them best. And they see these looks on real women with similar features, not some 5’11” model who looks good in everything,” Liff said in his pitch for the People’s Pick competition.

The company will make money three ways. The first revenue stream is through commissions from clothing women purchase through the platform.

The next stream is through its API; the core technology behind the Fitting Room Social can be used with any platform. “Whether it is a retailer, a publisher or a third-party app, if they can benefit from their customers getting a great experience regarding size and fit, then their business is going to be enhanced dramatically and they will pay us for the value we add,” Liff said.

Lastly, and this one comes after the other two: data monetization. “We will have a ton of data that will be incredibly valuable to service our retailers and third-party customers. That could potentially dwarf any other opportunity we have.”

To be sure, tens of millions of dollars have gone into this space, and no one has cracked it yet. Will it be Liff’s Fitting Room Social?

“He started this project around a year ago and, since launch, has shown interesting user acquisition growth and has developed a B2B offering so that other retail clothes stores can use his algorithm. We believe in him and the idea,” Montoya said.

Anya Freeman believes in the product. After tiring of the inevitable returns that accompanied online clothes shopping, the 26-year-old law intern jumped at the chance to join an early group of users that tested the app, and she has continued to use it. She’s been delighted with the outfits the website recommends.

But what about Liff’s wife, his inspiration for the birth of Fitting Room Social?

“I love it, I think it is awesome, and it’s constantly evolving to be even better,” said Marjorie Liff. And as a busy mom, she appreciates the time savings of online shopping: “Now I don’t have to drag my child to the mall to buy clothes because Daddy’s app made sure that they will fit.”

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