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Every few weeks, big fast-fashion brands like H&M and Zara churn out clothing styles they hope will sell. It’s a gamble trying to predict which items will become blockbuster trends and which will fall by the wayside. These huge companies usually forecast correctly, and it’s largely why they’ve grown into multibillion-dollar entities.
But being wrong is costly for a company’s bottom line as well as for the environment. H&M, for example, recently shared that it had $4.3 billion worth of unsold clothing; it admitted that even a mighty retailer like itself couldn’t keep up with the pace of fashion trends and will soon use artificial intelligence to get more accurate predictions.
But what if the guesswork could be taken out of the equation, and only the clothes that shoppers really wanted were manufactured? This is an approach that Choosy, a new fashion company, will try to hack when it officially launches in July. Choosy will sell clothes that reflect the most talked-about styles on social media — specifically, what celebrities and influencers are wearing. It will also get its merchandise to customers in under two weeks.
Choosy’s algorithm first determines what styles are talked about the most by combing platforms like Instagram for comments on photos of celebrity style with questions like, “Where can I buy this?” Users can use the hashtag #GetChoosy on style photos in order to help the AI pick the trends. Choosy will also have a team of “Style Scouts” looking for trending fashion, and after combining their research with its AI discoveries, the company will put out 10 styles a week, in sizes 0 to 20. Everything will cost under $100, and the clothes will be made on an on-demand basis.
The business model is basically fast fashion on steroids, and it’s one that venture capitalists believe will hit it big. On Tuesday, the company announced that it’s raised $5.4 million in funding from investors including NEA and Forerunner Ventures, which has previously invested in Glossier and Warby Parker.
Jessie Zeng, the co-founder of Choosy, is a 25-year-old Hong Kong native and former Citigroup trader. She tells Racked the idea for Choosy came to her when she was writing a personal style blog about shoes a few years ago while working on Wall Street. She watched how people would flock to Instagram to ask their favorite celebrities where styles came from. On the flip side, even fast-fashion stores never seemed to be fast enough.
“There’s a real opportunity to get whatever is being worn by a celebrity or an influencer straight to a customer, but the clothes are usually thousands of dollars, or they sell out right away,” Zeng says. “Fast fashion tries to predict what sells out, but they create a lot of waste because much of the inventory doesn’t sell out. The future of social commerce is about producing trends in real time, and it has to include users requesting the item too.”
While everyone in retail would love to figure out how to deliver trends fast, Zeng has an upper hand: Her family owns one of the largest textile manufacturing companies in China. With such connections, Choosy has direct access to factories, as well as a team of 15 in China who will make its clothes in about 48 hours (Zeng declined to share the name of the family business with Racked).
Without any middlemen involved in the supply chain, Zeng says Choosy will make clothes as the orders come in, so there won’t be as much overhead to its business, like excess inventory.
Choosy previously ran a beta test, where it debuted a collection with four items worn by the Hadids, including pearl-studded jeans that Gigi Hadid wore during Paris Fashion Week, and the collection sold out in hours. This makes sense, seeing as the age of the customer Choosy is targeting, Zeng says, is 15 to 25 — a.k.a. Gen Z, who lurk on social media in search of trends.
The company will definitely have to prove it’s not just another sketchy brand that advertises heavily on social media platforms like Facebook, the likes of which have made plenty of customers avoid shopping from brands they’ve never heard of before. Zeng believes Choosy will earn the trust of shoppers once they see the quality of the clothes, which she says is much better than fast-fashion brands with similar quick turnaround times, like Boohoo or Missguided.
While fashion companies find themselves in hot water all the time for participating in the copycat economy, Zeng notes that Choosy won’t officially be dabbling in knockoffs because it will procure popular styles rather than specific items. Regarding the copying aspect of its business, Zeng isn’t exactly apologetic, pointing out that the company is happy to “copy high-end items that would not be accessible to the public otherwise.”
It’s worth noting that Choosy’s clothes won’t be that original: The business model is set up to literally churn out trends, and it relies largely on an algorithm. While this works for brands like Stitch Fix, it’s also a model that’s bound for backlash from shoppers who crave fresh styles.
On the other hand, this reactionary business model of relying on trends, social media, and an algorithm instead of fashion’s old method of having a creative director dictate the style is something companies like Gap, J. Crew, and Banana Republic have come around to as well: All three brands got rid of their creative director positions over the past few years, and part of J. Crew’s turnaround plan is to be faster in reacting to trends. Eurie Kim, a general partner at Forerunner, says this reactionary thinking is what will set Choosy apart.
“Choosy sees that the consumer today is most likely on social media, looking to her friends, celebrities, and influencers for inspiration, and wants all this stuff but has no access to it,” Kim says. “There isn’t a brand or a store right now that’s able to serve her need at that rate of change and that rate of desire. Leveraging AI and technology to scan all social media impressions to get an understanding of what people want, and then actually being able to deliver, is a totally new business model that we are really excited about.”
While big brands like Zara and H&M might have a leg up on Choosy in terms of brand recognition and customer preference, Kim believes Choosy’s nimble supply chain will help the startup compete.
“When Forever 21 or H&M find runway styles, they still [take] three months to figure it out, while Choosy will be able to have a trend designed and prototyped within hours,” she says. “That’s important because if there’s something you want right now, you don’t want to wait five months until it’s in H&M.”