A/B testing for physical goods. Customers vote on what they like.
Crowdery is all but monogramming your shirts in its mission to personalize the shopping experience. The platform allows consumers to vote on a brand’s exact designs before they’re produced, empowering shoppers to tell retailers exactly what they want. Crowdery benefits retailers by taking the guesswork out of production, generating pre-sales and providing data on shopper's preferences.
Maran Nelson Co-founder, CEO @ Crowdery
Crowdery is on Wefunder Inc. They are not conducting a Regulation Crowdfunding campaign. You can follow them and get notified of their progress.
“You have [companies] producing physical products, where these people are literally crossing their fingers and blindly making big financial decisions that they can’t iterate on,” Nelson tells me. “So we’re trying to step in and bring the user to the product at a point in the production cycle that’s still relevant.”
Crowdery is redefining the mantra of fashion-forward thinking and applying it to the web and consumer habits. The marketplace platform allows consumers to access designs before they are mass-produced and rewards shoppers for their fashion foresight.
Crowdery founders Aditya Viswanathan and Maran Nelson saw an opportunity and a market need to personalize commerce, help brands generate pre-sales and take the risk out of production. The platform allows shoppers to vote online on pre-production styles, saving retailers money and rewarding consumers with discounts if their votes align with the rest of the online hive mind.
In addition to serving as a marketplace, Crowdery campaigns can also be included on a retailer’s website or Facebook page. The platform has 50 stores signed up and has piqued the interest of legacy brands such as Neiman Marcus and Polo Ralph Lauren.
The online process is much like how a physical store operates already, but it takes the risk out of the equation and allows stores to use their marketing dollars more efficiently. Viswanathan compared it to the way a store such as Zara might experiment with inventory in the front end of the store, seeing what moves and what doesn’t. But on the web, the process can be much more efficient.
"In fashion, you have a design team that does sketches, and then you go directly into production. And you have these emotional decisions being made," he said. "Crowdery is a layer between design and production that validates these decisions being made on a large scale."
How Crowdery Is Tailored To Both Consumer And Brand
A brand submits a set of designs to Crowdery, and users vote on their favorites. Then, shoppers receive a discount on pre-orders if the item she or he selected wins the popular vote. These votes are catalogued and analyzed based on demographics by pulling in user information via Facebook API.
"The idea of personalized commerce is very powerful,” Viswanathan said. “You're able to see what brands are thinking about, you're able to see the design process, and you're rewarded for involvement. That's the way commerce should be. Things should come to you at prices you're excited about."
Viswanathan said he'll get emails from brands discussing their production process that will say, “This is literally the most financially burdensome problem we have. We have massive amounts of product left, and we made poor decisions on the production end."
He wants stores to realize how obvious the solution is.
Why Brands Buy In To Crowdery
Companies are opening their eyes to new ways of marketing and connecting now that crowdfunding platforms such as Kickstarter and Indiegogo have given way to the phenomenon of user engagement, and tech that can glean analytics has matured, Viswanathan said.
The Crowdery platform is a marriage that solves a problem for both consumers and brands. After participating, shoppers will be notified of items based on their personal behavior, habits and price points. Then, Crowdery will provide to retailers data as specific as, "We have a 92 percent confidence rate that they will buy this item, and 85 percent confidence they will buy from this price point to this price point," Viswanathan said.
He pointed out that Crowdery’s appeal also lies in big-picture advertising potential.
"For example, these T-shirts appeal to guys his age who like these brands, so let's go find blogs or magazines that advertise to them. That granularity doesn't exist right now,” he said.
The Founders As Trendsetters
In high school, Aditya Viswanathan was an early-adopter of the TOMS-inspired model and launched a company called Jatalo, which sold backpacks and allocated some of the profits to provide school supplies to underprivileged children in developing countries. Viswanathan learned the greatest lesson in tailoring his designs for consumers after he realized he was producing Jatalo designs inefficiently when he had excessive amounts of stock left over.
To figure out how to scale his lessons learned and apply it to Crowdery and the fashion industry, he did everything from hit up trade shows and boutiques, to studying the inner-workings of stores such as Zara and H&M. He poured over their business models and profit numbers, and instead of looking at the problems, he studied what made these brands frontrunners.
Viswanathan met Maran Nelson through a mutual friend in Plano, Texas, where they both grew up.
Before Crowdery, Nelson founded Interact ATX, which united entrepreneurs at SXSW Interactive and personally raised $50,000 to fund it. She joined Viswanathan to work on digital strategy with Jatalo and was his first call when he started Crowdery.
Something that excites both of them is the idea of democratizing trend-watching with Crowdery in the same way the focus on street fashion, blogging and social media has leveled the playing field for style aficionados.
“We want customer to interact. We want them to be exploratory,” Viswanathan said.
Why did you pick this idea to work on?
With our past venture, an e-commerce brand called Jatalo, we faced challenging production decisions every season. Because of limited market insights before we went into production, we were forced to guess which designs would resonate with our target market. As a result, if (and more often, when) our picks were incorrect, we were forced to absorb the inventory costs of the unpopular products and eventually push them out on massive discounts. On the flip side, because we hadn't ordered inventory optimally, many of our top products sold out in weeks. In talking to others in the industry, we discovered that the problem of de-risking production is quite universal, from small boutiques all the way up to the behemoths. From these conversations, we developed a way to streamline the collection of customer feedback to power data-driven production decisions while providing value to consumers by giving them access to next season's designs at a discount.
How big is the market?
On average, nearly 50% of a brand's bottom line costs address inventory procurement and management, and e-commerce apparel/accessories in the US alone is a $50 billion market. Fashion, however, is only a starting point for us. Predictive analytics has relevance in several other verticals such as consumer electronics and home furniture (each multi-billion dollar markets by themselves). Our goal is to become the de-facto analytics layer in a brand's production workflow, and the more we grow, the more insight we have on different slices of the customer markets these brands sell to.
Who are your competitors? How are you different?
Our primary competitors are focus groups and macro-level demand forecasting solutions like EDITD and WGSN. Both competitors are enterprise solutions that are only addressing the top 10% of the industry players as well as have different approaches to solving the demand prediction problem. While most existing solutions focus on historic trends or limited opinions, our solution engages a large cross-section of customers at the most relevant point in the design process (right before goods are manufactured) and opens the conversion funnel to them before the production cycle even begins.
What do you understand about your business that others just don't get?
We understand that demand prediction isn't just a math problem. Our platform needs to be as much a beautiful consumer experience as it is a robust analytics platform, and for that reason, we're focusing on building out a novel way for consumers to discover products and be involved in the design process. One important component of this is identifying the channels where consumers are already vocal, namely social media. With our platform, brands are able to leverage their communities on Facebook and Twitter to generate valuable information about their designs while simultaneously engaging their customers with interesting content and incentives. Our integration model across brands' existing digital properties coupled with the data we're generating organically provides for a rich consumer experience in addition to tons of new data never been mined before.
What's your biggest risk? What keeps you up at night?
Our biggest challenge is integrating our platform and technology across both the marketing/user-facing department and the supply chain department of the brands we work with. Although the implementation of our product deals with a brand's website and social media properties, much of the data generated only has relevance when it's pulled full circle into the production process. Because of the novelty of our solution and the way we're gathering data, it's crucial that we educate our customers on how to use our platform to make production, marketing, and assortment planning decisions. Therefore, we do user-testing on both end consumers as well as our brands to make sure they're leveraging our product to the fullest.
How will you make money?
We will generate revenue by taking a commission of the pre-sales as well as for premium features/integrations for enterprise customers.
How do you acquire customers?
We have been selective in the early stages of our product to work with brands that we believe we have the ability to help and whose products and digital presence would provide accurate data on how to shape our product for future iterations. In doing so, we have built very close relationships with our brands and are able to see how they're interacting with our product. As we grow, we will focus more on working with industry leaders (publications, media, etc.) to acquire customers and lower the barrier to entry as much as possible to onboard brands of all sizes and types.
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