Women’s fashion is the ultimate ‘social’ industry, where the only thing that matters is what everyone else thinks and talks about your outfit. Most of us also love to check out luxury items all the time – ‘windowshop’ in real life or on a mobile device. These two characteristics probably explain the proliferation of mobile and social apps in Fashion (e.g., Polyvore, Fashion Kaleidoscope, Pose, Lockerz). Even Google is jumping into action this week at the London Fashion Show.
However, the core business model of Fashion remains as traditional as ever – expensive items bought by a small percentage of shoppers, while companies try hard to keep their brands ‘aspirational’ and ‘lifestyle statements’ by courting celebrities and fashionistas.
What if you want to experiment, but don’t want to pay a heavy price for items likely to be worn only a few times? That's the problem Gwynnie Bee is trying to solve - a startup for 'clothing without commitment'. They have a Netflix-like subscription model – up to 10 clothes at a time for a monthly fee that covers shipping both ways. You can keep an item as long as you want. When you send one back, GB cleans the garment and ships the next one from your queue.
I heard about GB from its VP of Engineering and an old Stanford friend – George Goldenberg. It’s different from the luxury renting services such as RentTheRunway (you pay per rental) or Le Tote (another ‘Netflix for Fashion’, but does not let you choose the specific items). GB users seem to love the service and it's been quietly building a paying subscriber base by word-of-mouth.
There are three reasons why such a service could be a disruptor of a multi-billion dollar industry (following the ideas in this TechCrunch article on 'true disruption')
Underserved Customer Segment:
GB has a clear target customer segment: plus sized women (10 and up). Most retailers do not have good selection of clothes for this segment, especially outside major metropolitan areas. Fashion brand messages are focused on the ‘skinny model’ outfits and often do not serve the unique needs of plus-sized women.
Unattractive Business Model for Incumbents:
The entire focus of fashion brands and retailers is to convince the buyer to make that expensive purchase now and again and again, as the item goes out of fashion in the next season. Since they want to protect their high margins and not dilute the brands, they are unlikely to adopt a rental model.
Designed for Social and Big Data:
GB is unlike most Silicon Valley startups. It has to deal with the messy world of physical goods, inventory & logistics. However, at its core, GB is a big data business built on social. Just as Netflix made the movie recommendations incredibly powerful, GB has the potential to understand and predict your behavior and even market trends – not just based on what you say, but driven by your real actions - how long you keep each outfit, what you return quickly, what you keep in the queue for each season etc.
Subscription economy has been disrupting many industries from movies to music to enterprise software. It’ll be interesting to see if it can make a dent in one of the most exclusive industries.