As fashion has its metaverse moment, one app looks to bridge real and virtual worlds for sneakerheads

Fashion is having its moment in the metaverse.

A riot of luxury labels, music, and games are vying for attention in the virtual world. And as physical events and the entertainment industry that depends on them shuts down, virtual things have come to epitomize the popular culture of the pandemic.

It’s creating an environment where imagination and technical ability, not wealth, are the only barriers to accumulating the status symbols that only money and fame could buy.

Whether it’s famous designers like Marc Jacobs, Sandy Liang, or Valentino dropping styles in Nintendo’s breakout hit, Animal Crossing: New Horizons; HypeBae’s plans to host a fashion show later this month in the game; or various crossovers between Epic Games’ Fortnite and brands like Supreme (which pre-date the pandemic), fashion is tapping into gaming culture to maintain its relevance.

One entrepreneur who’s spent time on both sides of the business as a startup founder and an employee for one of the biggest brands in athletic wear has launched a new app to try build a bridge between the physical and virtual fashion worlds.

Its goal is to give hypebeasts a chance to collect virtual versions of their physical objects of desire and win points to maybe buy the gear they crave, while also providing a showcase where brands can discover new design talent to make the next generation of cult collaborations and launch careers.

Aglet’s Phase 1

The app, called Aglet, was created by Ryan Mullins, the former head of digital innovation strategy for Adidas, and it’s offering a way to collect virtual versions of limited edition sneakers and, eventually, design tools so all the would-be Virgil Ablohs and Kanye Wests of the world can make their own shoes for the metaverse.

When TechCrunch spoke with Mullins last month, he was still stuck in Germany. His plans for the company’s launch, along with his own planned relocation to Los Angeles, had changed dramatically since travel was put on hold and nations entered lockdown to stop the spread of COVID-19.

Initially, the app was intended to be a Pokemon Go for sneakerheads. Limited edition “drops” of virtual sneakers would happen at locations around a city and players could go to those spots and add the virtual sneakers to their collection. Players earned points for traveling to various spots, and those points could be redeemed for in-app purchases or discounts at stores.

We’re converting your physical activity into a virtual currency that you can spend in stores to buy new brands,” Mulins said. “Brands can have challenges and you have to complete two or three challenges in your city as you compete on that challenge the winner will get prizes.”

Aglet determines how many points a player earns based on the virtual shoes they choose to wear on their expeditions. The app offers a range of virtual sneakers from Air Force 1s to Yeezys and the more expensive or rare the shoe, the more points a player earns for “stepping out” in it. Over time, shoes will wear out and need to replaced — ideally driving more stickiness for the app.

Currency for in-app purchases can be bought for anywhere from $1 (for 5 “Aglets”) to $80 (for 1,000 “Aglets”). As players collect shoes they can display them on their in-app virtual shelves and potentially trade them with other players.

When the lockdowns and shelter-in-place orders came through, Mullins and his designers quickly shifted to create the “pandemic mode” for the game, where users can go anywhere on a map and simulate the game.

“Our plan was to have an LA specific release and do a competition, but that was obviously thrown off,” Mullins said.

The app has antecedents like Nike’s SNKRS, which offered limited edition drops to users and geo-located places where folks could find shoes from its various collaborations, as Input noted when it covered Aglet’s April launch.

While Mullins’ vision for Aglet’s current incarnation is an interesting attempt to weave the threads of gaming and sneaker culture into a new kind of augmented reality-enabled shopping experience, there’s a step beyond the game universes that Mullins wants to create.

Image Credits: Adidas (opens in a new window)

The future of fashion discovery could be in the metaverse

“My proudest initiative [at Adidas] was one called MakerLab,” said Mullins.

MakerLab linked Adidas up with young, up-and-coming designers and let them create limited edition designs for the shoe company based on one of its classic shoe silhouettes. Mullins thinks that those types of collaborations point the way to a potential future for the industry that could be incredibly compelling.

“The real vision for me is that I believe that the next Nike is an inverted Nike,” Mullins said. “I think what’s going to happen is that you’re going to have young kids on Roblox designing stuff in the virtual environments and it’ll pop there and you’ll have Nike or Adidas manufacture it.”

From that perspective, the Aglet app is more of a Trojan Horse for the big idea that Mullins wants to pursue. That’s to create a design studio to showcase the best virtual designs and bring them to the real world.

Mullins calls it the “Smart Aglet Sneaker Studio”. “[It’s] where you can design your own sneakers in the standard design style and we’ll put those in the game. We’ll let you design your own hoodies and then [Aglet] does become a YouTube for fashion design.”

The YouTube example comes from the starmaking power the platform has enabled for everyone from makeup artists to musicians like Justin Bieber, who was discovered on the social media streaming service.

“I want to build a virtual design platform where kids can build their own brands for virtual fashion brands and put them into this game environment that I’m building in the first phase,” said Mullins. “Once Bieber was discovered, YouTube meant he was being able to access an entire infrastructure to become a star. What Nike and Adidas are doing is something similar where they’re finding this talent out there and giving that designer access to their infrastructure and maybe could jumpstart a young kid’s career.”

Vestiaire Collective raises $64.2 million for its second-hand fashion platform

Vestiaire Collective just closed another big round of funding in the middle of an economic crisis — the round closed in early April. The startup raised $64.2 million (€59 million) and the company has raised over $240 million over the year according to CrunchBase. Vestiaire Collective operates a marketplace of pre-owned fashion items. Users can both sell and buy clothes and accessories on the platform.

There’s a huge list of investors in today’s round — Korelya Capital, Fidelity International-managed funds, Vaultier7, Cuit Invest and existing investors Eurazeo (Eurazeo Growth and Idinvest Venture funds), Bpifrance, Vitruvian Partners, Condé Nast, Luxury Tech Fund and Vestiaire Collective CEO Matt Bittner are all participating.

With 9 million members across 90 countries, Vestiaire Collective has become a huge marketplace. And it makes sense that an e-commerce website focused on pre-owned items is working well. There has been a ton of backlash against fast fashion over the past few years.

People now also value circular business models as it becomes more affordable to refresh your wardrobe, especially during an economic crisis, and it is better for the environment.

As always, Vestiaire Collective will use the new influx of cash to expand to more countries. In particular, with Korelya Capital as a new backer, the company will expand to South Korea and Japan this year. While the company started in France, 80% of transactions are now cross-border transactions.

Originally, Vestiaire Collective asked you to send your items to its warehouses to check them before putting them on sale. The startup has been betting on direct shipping from the seller to the buyer in Europe and it has been working well. You can get reimbursed if there’s something wrong with what you ordered though.

Direct shipping has been available in Europe since September 2019 and it now represents over 50% of orders in the region. Up next, Vestiaire Collective will introduce direct shipping in the U.S. this summer and in Asia by the end of 2020.

Rebecca Minkoff has some advice for e-commerce companies right now

When Rebecca Minkoff first moved to New York City, the then-18-year-old was making $4.75 an hour.

“I just kept working for this designer and someone was telling me what to do every day. I just didn’t like that. And I thought if I’m going to work as hard, it’s going to be for myself and I want to call my own shots,” she said. “I didn’t want to be told what to do, frankly.”

Self-employment for Minkoff turned out just fine; in 2001, she redesigned the iconic “I Love New York” shirt and it appeared on The Tonight Show. After a shout-out from Jay Leno, Minkoff spent the next eight months making T-shirts on the floor of her apartment and quit her job to start designing full time.

We caught up with Minkoff to learn more about how she grew her brand into a global fashion company with the help of her brother, her problem with the unicorn mentality and why she thinks the “invisible barrier” is the future of retail tech.

This interview was edited for brevity and clarity.

TechCrunch: What gave you the energy and drive to become an entrepreneur?

Rebecca Minkoff: Long story. My mom would sell these cast covers, like decorative covers for people with broken arms at the flea market. And I was like, I am going to have a booth here. So I made all these tie-dye shirts and no one bought anything but it was just this idea of like, I can make something I can sell. My mom always taught that. When I wanted a dress, she taught me how to sew a dress instead of buying the dress. And so, I just got this bug for creating things out of nothing.

The constant thread was, “I’m not going to pay for this. You’re going to learn how to do it.”

Moda Operandi, an online marketplace for high-end fashion, raises $100M led by NEA and Apax

Moda Operandi, an online marketplace that specialises in right-off-the-runway luxury fashion, accessories and home decor, is today announcing a high-priced event of its own: it’s raised $100 million, a mix of equity and debt that it will use to invest in its platform and technology as well as to continue growing business overall, which was founded in 2010 and today offers products from some 1,000 brands and designers and ships to 125 countries.

“For the past eight years, Moda has disrupted the way people shop for luxury fashion,” said Moda Operandi CEO Ganesh Srivats in a statement. “This investment will enable us to build on that innovation, investing further in the client and designer experience and connecting more of the world’s best fashion to more people.”

The financing is being co-led by NEA and Apax Partners, both previous investors in Moda Operandi, with participation also from the Santo Domingo Family (connected to Lauren Santo Domingo, who co-founded Moda with Aslaug Magnusdottir), Comerica Bank, TriplePoint Capital and other unnamed investors.

The company’s valuation is not being disclosed but in its last round, in 2017, Moda Operandi had a post-money valuation of $650 million, according to data from PitchBook. It has raised $345 million to date.

High-end fashion might not be the first thing that comes to mind when you think about online shopping, but it has actually been a ripe market for the e-commerce industry.

While those in the know (and in the money) might attend catwalk shows, and bijou boutiques in swish locales are likely to be around for many years to come, there is a massive population of people who have the income and inclination to shop for luxury fashion, but might not be in the right place, or have the time, to do so.

For these shoppers, websites, mobile apps — and most recently new channels like Instagram and messaging services — have become a key route to browsing and buying, leading to the rise of huge businesses like Farfetch, Net-a-Porter and more.

That trend has helped to buffer Moda Operandi up to now, but it’s also the one that will be interesting to watch down the line.

We’ve written about the rise of direct-to-consumer brands and how that has played out specifically in the world of fashion, which in turn becomes a new group of competitors to aggregating marketplaces like Moda Operandi.

Similarly, the growing trend of targeting consumers wherever they happen to be also represents a rival business model, with some fashion retailers now foregoing websites altogether in favor of using third-party messaging apps to reach their target customers. Will Moda Operandi change with the times to do more of this kind of selling, too? Like fashion, what’s in today might be out tomorrow, so even the best channels are moving targets.

In any case, Moda Operandi has most definitely shown that it’s prepared to evolve and upset the status quo. The company got its start in 2010 in part out of an aha-moment from Santo Domingo, a socialite, former model and former editor at Vogue.

As someone who had worked for years in the luxury fashion industry, fully immersed as a consumer to boot, she knew that only a small, rarefied group of people ever got full access to a designer’s runway collection.

Moda Operandi was her solution — a platform to broaden that out, giving access to a full trunkshows (as the runway collections are called) to a wider selection of possible buyers and improving revenues for designers and brands in the process, since they no longer had to rely just on more traditional channels, namely buyers for retailers. The site had some catches — for example, as we pointed out at the time, you could shop a runway look, but still had to wait months for the piece to actually arrive with you, since those items would have yet to be made; but it caught on with a loyal following.

Over the years, the site’s basic remit has expanded, covering not only runway collections but also extending into jewellery, accessories and home decor. (We asked what size the business is today, and whether Moda Operandi can share any details on how that has changed over time, but a spokesperson said the company would not be sharing these or other financial details today.)

In any case, it’s remained a compelling enough business to have brought in a hefty round of growth funding from its previous backers.

“We continue to be impressed with the power of Moda’s brand and its positioning in the luxury market,” said Dan O’Keefe, managing partner of Apax Digital, in a statement. “Moda has been enhancing its technology capabilities as a world leading platform for fashion discovery and is led by a world-class team. We look forward to continuing to support their expansion.”

“Moda Operandi has really disrupted the traditional ecommerce model, using technology to give people unprecedented access to fashion,” added Tony Florence, general partner and head of technology investing at NEA, in a statement. “It was a really big idea when we led the Series A, and today Ganesh and the team are executing on that data-enabled retail model at scale. We are thrilled to continue supporting the company in this latest round.”

Vinted, the second-hand clothes marketplace, raises $141M at a $1B+ valuation

The market for second-hand clothes — the “circular economy” as it’s sometimes called — has been on the rise in the last several years, fuelled by economic crunches, a desire to make more responsible and less wasteful fashion choices, and a wave of digital platforms that are bringing the selling and buying of used clothes outside the charity shop. Today, one of the bigger companies in Europe working in the third of these areas is announcing a huge round of funding to double down on the trend.

Vinted, a site where consumers can sell and buy second-hand fashion, has raised €128 million (around $140.9 million) in a round that is being led by Lightspeed Venture Partners, with previous backers Sprints Capital, Insight Venture Partners, Accel and Burda Principal Investments also participating.

With this investment, the startup — founded and headquartered out of Vilnius, Lithuania — has passed a valuation of $1 billion (it is not specifying an exact amount), making it one of the biggest startups to come out of the country (but not the Baltics’ first unicorn… Estonian Uber competitor Bolt, formerly known as Taxify, is also valued at over $1 billion.)

The company is going to use the money to continue expanding in Europe, and building out more features on its platform to improve the buying and selling process, while sticking to its goal of providing a platform for consumers to list and buy used fashion.

“We want to make sure we don’t have new products,” CEO Thomas Plantenga said in an interview earlier. “All our sellers are regular people.” Some 75% of Vinted’s customers have never bought or sold second hand clothes in their lives before coming to the platform, he added. “The stigma is no longer there.”

Vinted’s growth comes on the heels of a remarkable turnaround for the startup. Founded in 2008 by Milda Mitkute and Justas Janauskas as a way to help Mitkute clear out here wardrobe before a house move, the company expanded fast, but at a price: by 2016, it was close to running out of money and business had slowed down to a crawl. Investors brought in Plantenga to turn it around.

“We changed the business model in 2016 to make the costs as low as possible for users to list clothes,” Pantenga said today. “That produced a dramatic change in our growth trajectory.”

The company, more specifically, went through some drastic changes. First, it clawed back a lot of its pricey international expansion strategy (and along with that a lot of the costs associated with it); and second, it removed all listing fees to encourage more people to list. Now, Vinted charges a 5% commission only if you conduct transactions on Vinted itself, bundling in buyer protection and shipping to sweeten the deal. (You can still post, sell and buy for free if you pay offline but you don’t get those perks.)

The turnaround worked, and the company bounced back, and two years later, in 2018, it went on to raise €50 million. Today, Vinted has some 180 million products live on its platform, 25 million registered users in 12 markets in Europe (but not the US) and 300 employees. It expects to sell €1.3 billion in clothes in 2019, has seen sales grow 4x in the last 17 months.

From fast fashion to fashion that lasts

Vinted’s rise has matched a wider trend in the region.

Europe is the home to some of the world’s biggest “fast fashion” businesses: companies like H&M, Zara and Primark have built huge brands around making quick copies of the hottest styles off the fashion presses, and selling them for prices that will not break the bank (or at least, no more than you might have previously paid to buy a pair of average jeans on the discount rack of a Gap).

But it turns out that it’s also home to a very thriving market in second-hand clothes. One estimate has it that two out of every three Europeans has bought a second-hand good, and 6 out of 10 have sold their belongings using platforms dedicated to second-hand trade.

Even as the company continues to hold back on expanding into the US — perhaps burned a little too much by its previous efforts there; or simply aware of the wide competition from the likes of Ebay, OfferUp, Letgo, Poshmark, and many more — Vinted’s growth in Europe has caught the eye of investors in the that market.

“At Lightspeed, we look for outlier management teams building generational companies. We’ve been impressed by the team’s ability to build an incredible product and value proposition for their community, and adapt and expand their business along the way,” said Brad Twohig, a partner at Lightspeed. “Vinted is defining its market and has built a global brand in C2C commerce and communities. We’re proud to partner with Vinted and leverage our global platform and resources to help them continue to build on their success and achieve their goals.”

While charity shops have traditionally dominated this market, sites like eBay, followed by a secondary wave of platforms like Vinted and another competitor in this space, Depop, have made selling and buying items into an established, low-barrier business.

All the same, given that extending the life of one’s goods feeds into a do-good ethos, it’s noticeable to me that Vinted hasn’t quite replaced the Salvation Army: there is virtually no way to sell on Vinted and give the proceeds to charity, if you so choose.

It appears that this might be something Vinted will try to address in the future.

“We are looking at making fashion circular for our users so that clothing that they bought doesn’t go to waste,” Plantenga said. “[Giving proceeds to charity] is super interesting and we should explore it as part of our growth story. To be honest, those things have been in the background and not developed because we’ve just been trying to keep up with everything, but the idea fits into our culture.”

E-commerce — in particular startups nipping at the heels of bigger players like Amazon and eBay by focusing on specific areas of the market that aren’t as well served by them — has had a bumper day in Europe, after brick-and-mortar marketplace Trouva earlier today also raised a sizeable round.

Billionaire clothing dynasty heiress launches Everybody & Everyone to make fashion sustainable

Veronica Chou’s family has made its fortune at the forefront of the fast fashion business through investments in companies like Michael Kors and Tommy Hilfiger . But now, the heiress to an estimated $2.1 billion fortune is launching her own company, Everybody & Everyone, to prove that the fashion industry can be both environmentally sustainable and profitable.

There’s no argument about the negative impacts of the fashion industry on the environment.

The textiles industry primarily uses non-renewable resources — on the order of 98 million tons per year. That includes the oil to make synthetic fibers, fertilizers to grow cotton, and toxic chemicals to dye, treat, and produce the textiles used to make clothes. The greenhouse gas footprint from textiles production was roughly 1.2 billion tons of CO2 equivalent in 2015 — more than all international flights and maritime shipments combined (and a lot of those maritime shipments and international flights were hauling clothes).

The litany of catastrophes that can be attributed to the clothing industry extends to pollution as well. About 20% of industrial water pollution globally can be traced to the dyeing and treatment of textiles — and microplastics from polyester, acrylic and nylon are polluting the world’s oceans.

Meanwhile, the rise of fast fashion has encouraged consumers to accelerate waste. Roughly one garbage truck full of clothes is landfilled around the world every second, according to a 2017 report from the Ellen MacArthur Foundation. That means consumers are throwing away around $400 billion worth of valuable goods every year as low prices and more “seasons” create an illusion of disposability.

Screen Shot 2019 10 27 at 10.21.17 PM

Image courtesy of World Resources Institute

As the fashion business has expanded so has the wealth of the Chou family. South Ocean Knitters, the knitwear manufacturer started by Chou’s grandfather was responsible for one of the first foreign investments into mainland China in 1974. It is now one of the largest suppliers of knitwear in the world and together with the Hong Kong manufacturer Li & Fung, is behind the Cobalt Fashion Holding, conglomerate.

And her father, Silas Chou, made millions as an investor in Michael Kors and Tommy Hilfiger. As an executive at Iconix Brand Group China, Veronica Chou played a role in the acceleration of the industry — bringing American brands to Chinese consumers. Chou also served as the cofounder of the Beijing-based private equity fund China Consumer Capital and a director of Karl Lagerfeld Greater China.

For Chou, an understanding of the environmental toll that the family business was taking on the planet began six years ago — a few years before Iconix Brand Group acquired the China subsidiary she had co-founded with her father in a transaction reportedly worth $56 million.

It was around the time that Chou had her children, she says, that she realized the importance of making a brand that was both environmentally sustainable and inclusive.

“It was six years ago I started learning about sustainability and five years ago that I said that I needed to have a sustainable brand,” says Chou. 

Since that revelation Chou dove into the world of sustainable manufacturing head-first. Through her family’s investment vehicles she has worked with companies like Modern Meadow, which uses bio-engineering to make leather goods in a lab. Chou has also led investments in Thousand Fell, a soon-to-launch manufacturer of fully recyclable shoes; Dirty Labs, which is developing more sustainable laundry cleaning products; and Carbon Engineering, which is developing a direct air capture technology for carbon dioxide.

Everybody & Everyone applies the lessons that Chou has learned about sustainability to a new fashion brand that she hopes can serve as a model for how to weave sustainability into every facet of the industry.

The new brand, which sells women’s clothes for every size from 00 to 24 and at prices ranging from $18 to $288 (most fall in the $50 to $150 range, given a quick scroll through the company’s new website) partners with companies like Naadam and Ecoalf for sustainable cashmere and recycled fabrics made from plastic.

“For our brand, recycled is a big story for us,” says Chou. “Our t-shirts, our socks, our packaging, our mailers, our labels, our stickers are all made from recycled materials that can be recycled again.”

The company’s attention to its environmental impact also extends to its supply chain. “Most of our fabrics are knit close to where our garments are manufactured. That is definitely reducing our carbon footprint,” says Chou. “I put an emphasis on having factories in America… our denim is manufactured in America and in the future we’re looking at t-shirts and athletics to be manufactured in America.”

Some clothes are also made with fabrics that have recycled silver in them — so that the clothes can be worn multiple times without smelling or the need for a wash. 

Digital printing is used in place of screens to prevent tons of water waste, the company said, and several of the company’s fabrics are not dyed at all. instead, the company relies on an upcycling process by separating recycled fibers mechanically by color.

Everybody & Everyone has also partnered with the organization One Tree Planted to plant a tree for each purchase that’s made with the company. In addition, the company has calculated its carbon footprint from all of its pre-launch activities and has bought and retired offsets to balance its emissions, Chou says.

“I started building Everybody & Everyone from the ground-up, first by getting the best team in place then by finding the right vendors, manufacturers and partners who were already making strides in the sustainability space,” Chou said in a statement. “I wanted this brand to be for every woman, so body positivity, inclusivity and sustainability were going to be the backbone of everything we did. We then constructed the brands sustainable & technical pillars, which consist of activation, recycled, dyeing & printing, naturals done better, bio-based fibers and end use to ensure our products would minimize negative impacts. We are sustainable down to the labels sewn into each garment.”

Source: Nike has picked up Russell Wilson’s Tally/TraceMe in a rare acquisition

Nike has long been synonymous with premium sneakers and other sports gear, but now it seems that the company could be extending its brand into another area — digital media — thanks to the rumored acquisition of a Seattle-based startup.

TechCrunch has learned from a source that the multibillion-dollar sports giant has acquired TraceMe, which originally built an app to let fans engage with sports stars and other celebrities before later pivoting into a service called Tally, a platform aimed at sports teams, broadcasters and venues to help fans engage around sporting events.

TraceMe was originally founded by Russell Wilson, the champion quarterback of the Seattle Seahawks, who was the executive chairman of the startup. The company had raised at least $9 million from investors that included the Seattle-based Madrona Venture Group and Bezos Expeditions (Amazon CEO Jeff Bezos’ fund), as well as YouTube co-founder Chad Hurley and others, and it was last valued, in 2017, at $60 million.

Our source said the deal closed in recent weeks and that “it was a good outcome” for the company and investors. It involved both IP — the main interest, the source said, was in TraceMe’s tech rather than Tally’s — and the team.

Indeed, at least eight of them, including TraceMe’s CEO Jason LeeKeenan, an ex-Hulu executive, are now listing Nike as their place of employment. LeeKeenan describes his new role as the head of Nike Seattle. Others on the team now have taken roles that include software engineers, head of product and product designers.

No one at TraceMe and Nike that we contacted has responded to our requests for comment, but just a little while ago GeekWire (which likely had the same tip we did) published a post noting that it had a source that confirmed the deal.

The athletic footwear giant Nike is no stranger to the world of technology: it has been a longtime collaborator with the likes of Apple to develop apps for its devices and has been an early mover on the concept of bringing and integrating cutting-edge (yes, possibly gimmicky) tech into its footwear and other gear. And that’s before you consider Nike as an e-commerce force.

But while the dalliance between sports, tech and fashion is well established, this deal opens up a different frontier for the company. It’s very rare for Nike to make an acquisition, but it makes sense that if it were going to do some M&A, it would be in the area of digital media and picking up engineers to execute on a wider vision in that area.

The company is best known, of course, for its shoes and related sporty clothes, which it has for a long time created in co-branding with the biggest sports stars and has more recently started to extend to a wider circle of celebrities and hot brands in a spirit of sporty street style. These have included the likes of so-cool Supreme, Travis Scott and seemingly tentative forays into music culture.

Nike overshadows all other sports shoe brands in size, with its current market cap at nearly $117 billion, more than twice that of its closest competitor, Adidas . But Adidas has been stealing a march when it comes to partnerships with a wide network of celebrities (even if Drake prefers checks over stripes).

While it isn’t clear yet how and if Nike will be using the startup’s existing services, you could see how a deal like this could help Nike start to think about how it might leverage the collaborations and endorsements it already has in place into experiences beyond shoes, advertising and athletic performance. In this age of Instagram and influencers playing a massive role in shifting consumer sentiment (and dollars), this could give Nike a shot at building its own media platform, independent of these, on its own terms.

This is a bigger trend that we’re seeing across a lot of digital media. Consider how companies like Spotify have extended beyond simple music streaming, investing in building tools to help artists on its platform with marketing and expanding their brands: selling shoes means selling a concept, and that concept needs to have a foothold in a digital experience. 

Google brings its Jacquard wearables tech to Levi’s Trucker Jacket

Back in 2015, Google’s ATAP team demoed a new kind of wearable tech at Google I/O that used functional fabrics and conductive yarns to allow you to interact with your clothing and, by extension, the phone in your pocket. The company then released a jacket with Levi’s in 2017, but that was expensive, at $350, and never really quite caught on. Now, however, Jacquard is back. A few weeks ago, Saint Laurent launched a backpack with Jacquard support, but at $1,000, that was very much a luxury product. Today, however, Google and Levi’s are announcing their latest collaboration: Jacquard-enabled versions of Levi’s Trucker Jacket.

These jackets, which will come in different styles, including the Classic Trucker and the Sherpa Trucker, and in men’s and women’s versions, will retail for $198 for the Classic Trucker and $248 for the Sherpa Trucker. In addition to the U.S., it’ll be available in Australia, France, Germany, Italy, Japan and the U.K.

The idea here is simple and hasn’t changed since the original launch: a dongle in your jacket’s cuff connects to conductive yarns in your jacket. You can then swipe over your cuff, tap it or hold your hand over it to issue commands to your phone. You use the Jacquard phone app for iOS or Android to set up what each gesture does, with commands ranging from saving your location to bringing up the Google Assistant in your headphones, from skipping to the next song to controlling your camera for selfies or simply counting things during the day, like the coffees you drink on the go. If you have Bose noise-canceling headphones, the app also lets you set a gesture to turn your noise cancellation on or off. In total, there are currently 19 abilities available, and the dongle also includes a vibration motor for notifications.

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What’s maybe most important, though, is that this (re-)launch sets up Jacquard as a more modular technology that Google and its partners hope will take it from a bit of a gimmick to something you’ll see in more places over the next few months and years.

“Since we launched the first product with Levi’s at the end of 2017, we were focused on trying to understand and working really hard on how we can take the technology from a single product […] to create a real technology platform that can be used by multiple brands and by multiple collaborators,” Ivan Poupyrev, the head of Jacquard by Google told me. He noted that the idea behind projects like Jacquard is to take things we use every day, like backpacks, jackets and shoes, and make them better with technology. He argued that, for the most part, technology hasn’t really been added to these things that we use every day. He wants to work with companies like Levi’s to “give people the opportunity to create new digital touchpoints to their digital life through things they already have and own and use every day.”

What’s also important about Jacquard 2.0 is that you can take the dongle from garment to garment. For the original jacket, the dongle only worked with this one specific type of jacket; now, you’ll be able to take it with you and use it in other wearables as well. The dongle, too, is significantly smaller and more powerful. It also now has more memory to support multiple products. Yet, in my own testing, its battery still lasts for a few days of occasional use, with plenty of standby time.

jacquard dongle

Poupyrev also noted that the team focused on reducing cost, “in order to bring the technology into a price range where it’s more attractive to consumers.” The team also made lots of changes to the software that runs on the device and, more importantly, in the cloud to allow it to configure itself for every product it’s being used in and to make it easier for the team to add new functionality over time (when was the last time your jacket got a software upgrade?).

He actually hopes that over time, people will forget that Google was involved in this. He wants the technology to fade into the background. Levi’s, on the other hand, obviously hopes that this technology will enable it to reach a new market. The 2017 version only included the Levi’s Commuter Trucker Jacket. Now, the company is going broader with different styles.

“We had gone out with a really sharp focus on trying to adapt the technology to meet the needs of our commuter customer, which a collection of Levi’s focused on urban cyclists,” Paul Dillinger, the VP of Global Product Innovation at Levi’s, told me when I asked him about the company’s original efforts around Jacquard. But there was a lot of interest beyond that community, he said, yet the built-in features were very much meant to serve the needs of this specific audience and not necessarily relevant to the lifestyles of other users. The jackets, of course, were also pretty expensive. “There was an appetite for the technology to do more and be more accessible,” he said — and the results of that work are these new jackets.

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Dillinger also noted that this changes the relationship his company has with the consumer, because Levi’s can now upgrade the technology in your jacket after you bought it. “This is a really new experience,” he said. “And it’s a completely different approach to fashion. The normal fashion promise from other companies really is that we promise that in six months, we’re going to try to sell you something else. Levi’s prides itself on creating enduring, lasting value in style and we are able to actually improve the value of the garment that was already in the consumer’s closet.”

I spent about a week with the Sherpa jacket before today’s launch. It does exactly what it promises to do. Pairing my phone and jacket took less than a minute and the connection between the two has been perfectly stable. The gesture recognition worked very well — maybe better than I expected. What it can do, it does well, and I appreciate that the team kept the functionality pretty narrow.

Whether Jacquard is for you may depend on your lifestyle, though. I think the ideal user is somebody who is out and about a lot, wearing headphones, given that music controls are one of the main features here. But you don’t have to be wearing headphones to get value out of Jacquard. I almost never wear headphones in public, but I used it to quickly tag where I parked my car, for example, and when I used it with headphones, I found using my jacket’s cuffs easier to forward to the next song than doing the same on my headphones. Your mileage may vary, of course, and while I like the idea of using this kind of tech so you need to take out your phone less often, I wonder if that ship hasn’t sailed at this point — and whether the controls on your headphones can’t do most of the things Jacquard can. Google surely wants Jacquard to be more than a gimmick, but at this stage, it kind of still is.

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Syte snaps up $21.5M for its smartphone-based visual search engine for e-commerce

Visual search has become a key component for how people discover products when buying online: If a person doesn’t know the exact name of what he or she wants, or what they want is not available, it can be an indispensable tool for connecting them with things they might want to buy.

Now, one of the companies building technology to do this has raised a round of funding to expand its business further into the U.S., and not just across digital platforms, but to tap further into the opportunities of bringing visual search into the world of physical commerce, too, by way of smart mirrors and apps for store assistants to better help customers.

Syte, a Tel Aviv startup that works with fashion retailers like Farfetch and River Island, as well as those that sell a wider variety of goods like Argos, Sainsbury’s and Kohl’s, has raised $21.5 million in funding. The Series B was led by Viola Ventures, with participation from Storm Ventures, Commerce Ventures, Axess Ventures and Remagine Ventures.

Syte has now raised $32 million, including a previous round in 2017; it’s not disclosing its valuation but is projecting 300% revenue growth this year.

The use of visual search — using computer vision to “read” a picture, match it up with its metadata and then find pictures of products that are similar to it — has become commonplace in e-commerce in recent years.

Among the many other companies that have this kind of tech — including visual search platforms like Pinterest and social media platforms themselves — Syte’s approach is notable in how it engages shoppers in the process of the search. Users can snap pictures of items that they like the look of, which can then be used on a retailer’s site to find compatible lookalikes. Retailers, meanwhile, can quickly integrate Syte’s technology into their own platforms by way of an API.

Lihi Pinto Fryman, Syte’s CMO who co-founded the company in London with husband Ofer Fryman, Idan Pinto and Dr Helge Voss, said in an interview that the company spent about three years developing its technology — spurred initially by her own surprise, when she was working as an investment banker, at not being able to find a particular dress she spotted in a magazine — and only launched a product about 18 months ago.

Since then, she says Syte has seen “super hyper” growth because of the gap the company is filling.

The crux of the problem goes something like this: Retailers both online and offline have found that a new generation of shoppers are less interested in visiting their storefronts.

They are instead shopping by browsing social media platforms like Instagram and buying from there, which essentially opens those retailers to whole new set of competitors, and puts them potentially at a great disadvantage, as they are not as well-equipped to speak to that audience or anticipate what interests them to trigger sales.

“Young people are on Instagram for hours each day,” Fryman said. Indeed, Instagram is one of the only big social networks that’s seeing usage rise at the moment. “Retailers need to find a way to compete with that and remain in the market, and they can’t just continue what they’ve always done.”

On the other hand, while there are a number of visual search tools out in the market, not all of them are useful enough. “If you are searching for a ruffled floral yellow dress but you get a blouse, it just doesn’t cut it,” she noted. “And if it takes seven seconds to get an answer, that’s also not good, because people will give up after two seconds. Millennials and Gen Z shoppers have a very short attention span, so you need to be accurate and fast.”

The idea is that a product like Syte’s addresses both of these issues, and then some. In addition to its camera-based search service, it provides a recommendation engine to retailers, plus tagging services for its back catalog to complete the service.

“Rarely do we find companies that have managed to solve a technological problem that tech giants have been working for years to solve without success,” says Ronen Nir, general partner at Viola Ventures, in a statement. “The feedback from the market is clear and swift and the rate of adoption of Syte’s solution is unparalleled. We are excited to lead a significant funding round that would be able to take the company to the next level.”

Syte’s more recent foray into physical commerce is an interesting turn as well. Smart mirrors have been more of a wishlist item than something that has seen critical mass adoption so far in changing rooms.

If the idea does catch on, I wonder what kind of a digital divide it might create among retailers, though, since the cost of refurbishing changing rooms to include these, along with all the backend changes that would need to be made, will likely be only the kind of service that bigger or high-end boutiques will be able to shoulder.

More interesting, perhaps, is the idea of app-based tools for assistants, many of whom already carry a smartphone and would likely be grateful for recommendations to help sell better to customers.

“We have a vision to transform product discovery, and thus the e-commerce experience, for both retailers and consumers.” said Ofer Fryman in a statement. “That vision is what has led us since we founded Syte, and it is what continues to lead us as we enter this stage.”

Nike launches a subscription service for kids’ shoes, Nike Adventure Club

Just in time for back-to-school shopping, Nike today officially announced its entry into the subscription service market with the launch of a “sneaker club” for kids called Nike Adventure Club. The new program is specifically designed to make shopping easier for parents who struggle to keep up with their quickly growing children’s shoe needs. Instead of taking kids to the store and trying on pair after pair to try to find something the child likes, the new Nike Adventure Club will instead ship anywhere from four pairs to a dozen pairs of shoes per year, depending on which subscription tier parents choose.

The club serves kids from sizes 4C to 7Y — or roughly ages 2 to 10.

Club pricing begins at $20 per month which will ship out new shoes every 90 days. For $30 per month, kids get 6 pairs per year. And for $50 per month, kids will get new shoes every month — a choice that may be excessive except for the most active kids who were their sneakers every day, play sports, or have a tendency to wreck their shoes in short order.

However, even the minimum of four pairs per year may be too frequent for some parents of older kids.

According to the American Orthopaedic Foot & Ankle Society, toddlers under 16 months grow more than one-half a foot size every two months. From 16 to 24 months, they grow an average of one-half a foot size every three months. From 24 to 36 months, it’s one-half a foot size every four months. Then things slow down.

Children over three years old grow one-half a foot size every 4 to 6 months. That means some older kids only need to replace their shoes twice per year, outside of excessive wear and tear.

That said, Nike allows parents to upgrade or downgrade their subscription at any time, or even put it on pause.

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Once signed up, parents will receive an email with a selection of over 100 styles of Nike and Converse shoes to choose from, which they can review with their kids. They then pick which shoes they want to receive, and these are shipped to the home in a box with the child’s name on it. This box also includes an “adventure kit” filled with activities and games for parents to do with their kids, stickers, plus a small gift. The kit is created in partnership with the nonprofit KaBoom, which is focused on encouraging kids to lead healthy lifestyles.

If the shoes are the wrong size, exchanges are free within a week of delivery.

Perhaps the best part of the program is the recycling component.

Twice a year, Nike will ship out a prepaid bag where parents can send back their kids’ worn shoes, which will either be donated to families in need if in good condition or recycled through Nike Grind, a program that separates out the rubber, foam, leather, and textile blends, grinds them into granules, and incorporates those into new products including footwear, apparel, and play surfaces.

“We see Nike Adventure Club sits as having a unique place within Nike, and not just for it being the first sneaker club for kids,” says Dave Cobban, VP of Nike Adventure Club, in a statement about the launch. “It provides a wide range of options for kids, while at the same time, it removes a friction point for parents who are shopping on their behalf.”

Nike has been testing the program since 2017, when it was known as Easy Kicks. The test reached 10,000 members, the company said.

Nike isn’t the first to launch a subscription focused on kids — and big retailers have taken note. This year, Foot Locker took a minority stake in kids’ clothing subscription Rockets of Awesome and Walmart partnered with children’s clothing startup Kidbox.

Stitch Fix also offers a kids’ styling service. And Amazon offers a try-before-you-buy shopping service without a subscription, Prime Wardrobe. Amazon’s variation offers both girls and boys options where parents can fill a box with apparel, shoes, and accessories for home try-on and easy returns.

Nike’s Adventure Club is launching today but is easing in new customers via a waitlist option.