As online purchasing soars, Israeli start-up MySizeID aims to help online shoppers and e-retailers find the right size.
We are all familiar with the less-fun side of clothes-shopping online: After choosing a design and a color, we reach “size, ” and the deliberation begins… Which size to choose? Are the sizes US or European? And what are the odds that the sizes in an Asian store will be at all similar to ours? Generally, this quandary drives us to take out the measuring tape, and embark upon a tedious process of torso, neck, hip, and bust measurement. Or we just gamble, and trust that even if we’re off, it’s okay, we didn’t pay that much anyway. And we can always send it back.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at firstname.lastname@example.org.
These are the very reasons Ronen Luzon decided to found MySizeID, a Bank Leumi -“Globes” Innovation Nation program participant. After a few experiences shopping for clothes online, he decided to found a company to find a solution. The company has developed an algorithm that measures the body, and finds the optimal match between the sizes on the site, and the shopper’s size. The company says that its algorithm knows to calculate variables such as fabric type, cut, and how the garment holds up to wash.
In March 2014, “Globes” surveyed how much Israelis shop online. Based on the data gathered, as of 2013, online purchases skyrocketed (based on credit card company estimates) to $1.02 billion. The number of packages from overseas more than doubled in 2013.
Most impressive is the rate of growth: According to estimates, in 2013, total purchases increased by 25% relative to 2012, when online purchases totaled $820 צillion. In 2011, online purchases totaled an estimated $564 mllion. In other words, in two years, sales nearly doubled. If this double-digit growth-trend continues, online purchases can be expected to account for a significant portion of the Israeli-consumer market share.
Israel Postal Co. data also point to an increase in purchases: In 2013, there was a 117% increase in the number of incoming packages from abroad. There were sharp increases in previous years as well, though somewhat less dramatic; in 2012, the number of incoming packages increased by 445, and in 2011, by 59%. Israel Postal Co. said that 2014 could register an impressive 100% increase from the previous year.
These figures are in line with international trends: Online sales totaled $291 billion in 2014, yet only $48 billion of that was for clothing – a mere 15% of purchases. In other words, this market has the potential to grow significantly. The main problem in the market for retailers is the high-return rate, which in 2014 was no less than 30%, 70% percent of which were returned due to a bad fit.
This is the very fertile ground on which MySizeID is growing. “We’re talking about vast sums of money that the retailers pay just to the shipping companies, and they also absorb the returns. The retailers understand that there is a problem here, and they try to minimize losses, ” says Luzon.
The company is currently in the process of integrating its solution and connecting to the systems at In Situ S.A., which owns the rights to the Spanish fashion brand Trucco. Under the terms of the agreement, the company’s measurement technology will be integrated in the Spanish company’s computerized information system, in order to assess MySizeID’s results with regards to In Situ S.A.’s sales, and the customers’ satisfaction rate.
“They gave us their size chart, ” explains Luzon, “And we provide the customer with the best fit for their measurements based on it. In other words, the customer will measure himself quickly using our measuring tool, and the result will be automatically translated into the closest Trucco size. In the future, we hope to create a sort of ID for each company, so there would be an Adidas ID, a Ralph Lauren ID, etc.”
The company ultimately hopes to create a buyer profile, which will be fitted to each company based on its size chart. The business model is based on partnerships with various companies, at each of which the customer will have a unique ID, like a barcode, that will allow them to buy on the site without wasting time deliberating about the size. The company says that the sizes are calculated based not-only on length and width, but also factors in whether the fabric is stretchy or stiff, in order to calculate the perfect fit for the wearer.
In later stages, the app will be able to recommend specific cuts. The resolution of the tests will be extremely precise, to the point where the characteristics of the water in a specific country, which affect how a garment reacts to being washed, will also be factored in. Incidentally, if you gain or lose weight, you will be able to re-scan yourself, and re-size yourself accordingly.
Another advantage of the ID is that if you want to buy a gift for your partner or kids, you can do so without hesitation. In the future, the customer’s ID will identify preferred cuts and styles, and will automatically point you towards those items. “Let’s say tomorrow is my girlfriend’s birthday, and I want to buy her a present, ” Luzon explains. “I know she likes to shop at Ralph Lauren, and I know what her measurements are, and even what she likes, because she shared her company ID on Facebook, without disclosing any of her measurements, of course, just the ID.”
Does it work also in a brick and mortar store?
“Of course, the next step is that you arrive at a store in Israel or abroad, with your phone, and you have the sizes. You go up to the salesperson, and ask for these clothes in these sizes – also as gifts for your kids and your husband or wife. It saves time and a lot of trouble.”
It doesn’t ruin the shopping experience?
VP Products Billy Pardo: “I really like going to shopping malls, and also sitting in office and shopping online. The two are not mutually exclusive. If I want something and I’m online, I can easily buy it in one click and have it even that same evening.”
And where will the profit come from? The partnerships will not require an investment in the company. The company’s business model, which is currently being assessed by Trocco, is for the company to profit from each sale made using the ID.
MySizeID was founded by Luzon, a serial entrepreneur, who has a technical background from the high-tech industry. The patented technology is based on navigation capabilities – instead of navigating between roads and streets, it navigates the human body. The algorithm is able to track the body’s movements and to measure it.
The company – My Size Inc. (TASE: MYSZ; Pink Sheets: KNWT) was established two and half years ago, and is traded in the US, after having bought a stock-market shell. Since early 2014 it has been traded on the Tel Aviv Stock Exchange (TASE) as well, and has raised about $1.53 million. The current aim is to raise $20 million to begin marketing.
Why should a small company like yours be publicly traded?
“First of all, it’s much greater exposure. And, of course, it’s easier to invest in a public company, which must disclose all its activities and endeavors, than in me, Ronen Luzon. But I am exposed to more criticism, and it costs a lot of money. We gave it a good deal of thought, because there are many complicated aspects, but because we are targeting a huge market, we will be more comfortable approaching large companies as a publicly-traded company.” When will you begin marketing?
“The development of the product is not yet finished. There are still details that must be finalized and developments that must be carried out in order for it to suit everyone. The partnership with Trucco makes it possible for us to assess whether our product can be integrated with retailers. Every new product of ours that is to be released will be tested by Trucco, in order to receive a sort of a seal of approval.”
Where will you market?
“We are talking about the US, Europe, and the Far East. It is a vast market. It requires a lot of money because it entails many trips by the team, for focus groups, and getting to know the mentality. We work hard to make the product easy-to-use, fun, and uncomplicated, and it needs to suit every user, anywhere in the world, perfectly.
“Another market of ours is the second-hand market, where the same problem exists. For example, someone wants to sell a batch of clothes on eBay. We will make it possible to measure the clothes using our technology, upload the products to eBay with the sizes, and will do the matching between the sizes of the clothes and the size of the customer.”
Any other goals in the realm of fashion?
“We are currently targeting the casual market, but we’re not ruling out entering the haute couture market in the future, ” says Luzon. There are Israeli designers who manufacture abroad to cut costs. If they have a tool this accurate to measure all the little parts, a designer here on Bograshov Street In Tel Aviv will be able to trust the tailors overseas and to sell anywhere in the world.”
The company says that, in the future, it will be possible to apply the technology to architecture, furniture, and perhaps other markets as well. The goal is to develop a tape measure as a smartphone app, just like there is a flashlight and calculator.
The joint Bank Leumi – “Globes” Innovation Nation initiative presents companies that have introduced a significant innovation.The judges who selected the companies are: Technion Innovation Center manager Miriam Erez; SodaStream VP Innovation and Design Yaron Kopel; Bezeq VP Marketing Ran Guron; Fox owner Harel Wizel; and “Globes” Chief Editor Hagai Golan.
Published by Globes [online], Israel business news – www.globes-online.com