Retail Events: Fashinvest 2011 Capital Conference
December 14th, 2011 § 2 Comments
Fashinvest Capital Conference
Last week, Reuters reported that venture capital investing in e-commerce rose from $1.06b in 2010 to $2.39b in 2011. That increase in interest and in dollars spent was evident at last week’s annual Fashinvest Conference. The conference was organized by Fashinvest, a platform whose goal “is to create a community of key participants whose goal is to foster the development of the emerging growth companies within the broad consumer sectors of Branded Goods, Retail, Fashion and Technologies related to these consumer opportunities.” Fashinvest co-founders Karen Griffith Gryga and David Freschman (both extremely accomplished venture capitalists and businesspeople themselves), along with their team, did a fabulous job of pulling together top investors, entrepreneurs, retail experts and more to discuss the state of the retail industry and to think about the future of various aspects of the business. The room was filled with men and women in corporate attire, networking and paying serious attention to the existing and new businesses being considered. The conference gave attendees lots to think about, but what it most uniquely provided was a chance for a select group of young entrepreneurs to “demo” their businesses to a panel of industry experts and venture investors. In the technology world, pitch sessions and demo days are commonplace, but in fashion, beauty and branded goods, I believe Fashinvest is the only platform ever to give retail entrepreneurs this chance.
As I myself am embarking on a time-consuming new venture, I didn’t make it to as much of the conference as I wanted to, but I did sit in on the Fireside Chat with Gilt Founder and CEO Kevin Ryan, and the afternoon “Emerging Growth Company Presentations”. I have to admit that I was expecting Kevin Ryan to give a polished, pleasant, but not necessarily Truth Plus- type talk; we’ve all read so much about the Gilt business and its inner workings, I figured there wouldn’t be much new news. I was flat-out wrong. Ryan, who skipped a meeting in Washington DC with President Obama to speak at the Fashinvest Conference, gave one of the most honest, useful, and analytical talks I have heard at a retail event. From his belief that entrepreneurs should invest in public relations at an early stage, to a review of how Gilt tracks its customers through data on a constant basis, Ryan took the group through his philosophies and experiences. He emphasized the strength of the luxury customer, saying “there’s still no recession in the top 1%”. He mentioned that Gilt had recently sold a round trip Virgin America reservation for an entire plane full of people for $60k and said that there was a huge wait list for the purchase, a pretty shocking revelation in these difficult economic times. In terms of social media, he candidly admitted that Facebook commerce is not a strong source of revenue for Gilt or for any e-commerce site, saying “It’s just not happening.”
Personally, I myself haven’t gotten into mobile or M commerce quite yet; something about making a purchase on the fly just seems a little hasty. But for flash sales sites, this way of buying makes sense to a lot of shoppers apparently; Ryan stated that 37% fo Gilt’s traffic comes from this channel (iPad and iPhone, along with other mobile devices). “Anyone who’s buying on mobile is a good customer.”
In terms of international expansion, Ryan said that he “looks for markets that don’t have similar models. I don’t like it if anyone there (in a new potential market) is a year ahead of Gilt.” Currently, Gilt employs 2000 people in 25 countries. Some of the other areas he broached were site analytics (“How we move people from section to section should almost be an algorithm.”) and the value of smart recruiting (“I used to think good employees were 60% of your success, now I think it’s 80 or 90%.”) He even revealed that Gilt wrote off roughly 6% of their inventory in year one, a truly valuable piece of information to newer e-commerce entrepreneurs. Another useful but not surprising tidbit was that Gilt’s female shoppers are more sensitive to shopping costs than male shoppers. Ryan closed by saying that he thinks there will be “fewer flash sales sites in coming years, not more.” If he and his employees keep dedicating themselves to improving discount and full-price product offerings, pricing and service strategies, this may very well be true.
After Ryan’s talk, conference goers headed over to the afternoon Emerging Growth Company Presentations. I should mention that in the morning session (which took place before I arrived), speakers and panelist highlights included Marty Staff (former Chief BDO of American Apparel, CEO of JA Apparel and Hugo Boss), Lawrence Lenihan of FirstMark Capital and fashion law expert Staci Riordan of Fox Rothschild. I also was sad to miss the later afternoon panel on “Entrepreneurs Who Also Invest” with entrepreneurs Steven Alan and Julie Macklowe, and attorney Linsey Bozzelli. The presentations I did catch, and the expert panelists who gave presenters feedback, however, were fascinating. Many of the companies pitching, including Stylitics, Stylyt, Hold for Jane, Pique and Fashion Forward Maternity were social media, custom-clothing, fit technology, rental system, crowdsourcing or analytics based. A few, like Rory Beca and NUMBER: Lab, were more traditional wholesale/retail businesses. Others that presented at the conference include 72Lux, BESPEAK, Fitted Fashion, Have to Have, Modasuite and The RealReal. The VCs and experts made some helpful points and asked a range of questions about financial projections, statistics, and marketing techniques. Their comments were tough but very fair. Admittedly, my favorite part of the presentations was seeing moderator Daymond John, Founder and CEO of Fubu and star of entrepreneur TV show Shark Tank, in action; he made what could have been a tense situation fun and compelling.
Thanks so much to Karen Griffith Gryga for inviting me, and congratulations to Fashinvest on a job flawlessly done, and to all the panelists and presenters. The way that fashion as an industry works is changing, and Fashinvest is making that possible.
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