Before Joe Shartzer flowed a sea of sundresses in every color of the rainbow.
Jean jackets and ballet flats. Houndstooth coats and derby shoes with aquamarine soles.
Leather, pleather, denim, and lace.
Bobs, braids, bald spots, and man buns.
Shartzer paced the stage, paused, and faced his stylish audience to pose a question: "Who here has been shopping, picked up an item, saw the price, and dropped it and walked away?" He peered past the stage lights and saw braceleted and bejeweled hands shoot into the air. "This is a horrible experience," he said, nodding. "And it happens far too often."
There's a better way to shop, Shartzer concluded. And just as important, retailers need to address the $80 billion in "suboptimal revenue"—a term he says refers to sales that occur without a clear sense of the underlying reasons. Why did a shopper buy that sheath dress? Was she really satisfied with it—or just capitulating because the shift dress she really wanted cost twice as much as she was willing to pay?
These and many other questions were on retailers' minds as they convened for the second-annual New York Fashion Tech Lab Demo Day, held at the Time-Life Building in Manhattan, where eight technology startups showed their proposed solutions to knotty problems that plague the industry. There were apps to address the move to mobile devices (Cloth) and systems for smarter inventory management (SkuIQ). There were tools to help supply chain members collaborate (Sundar) and platforms to mine sales data for optimized operations (42 Technologies). And, of course, there were products to improve pricing—which is why Shartzer, clad in a green-and-gray gingham dress shirt and slate sport coat, prowled the stage delivering marketing platitudes on behalf of the Boston-based company he co-founded, Nyopoly.
"It's demo time," he said, turning to the screen behind him. Take this $100 jacket, he said. What if Sarah, the shopper in question, would rather pay $50 or $60 for it? Instead of her dropping the item and walking away, a retailer using Nyopoly's Engaged Pricing software can suggest a substitute in her price range, then use the data to stock a similar product that meets the target price. "We have a very qualified buyer in Sarah," Shartzer said. Knowing that, why let her walk away unhappy?
"For a small [retail] company, getting the attention of customers is challenging, time-consuming, and causes a bit of brain damage," said Maria Gotsch, president and CEO of the Partnership Fund for New York City, the investment arm of the nonprofit organization comprised of CEOs from local firms and tasked with boosting the city's economy.
Thus the twelve-week Fashion Tech Lab program. The effort—which is backed by Springboard Enterprises, the Partnership Fund, and various retailers from The Estée Lauder Companies to the Fossil Group—gives early-stage startups access to the city's well-known fashion retail companies (among them Kate Spade and 7 For All Mankind owner VF Corp.) with hope that it will accelerate the adoption of technologies that will advance the industry.
"The discussions that happen after the lab are as encouraging as the ones that happen during the lab," Gotsch added. Its secret sauce? The executives involved, she said.
To that end, the day's proceedings closed with a midday bang: An announcement of an alliance between Macy's (m) and Nineteenth Amendment that would give the larger company access to the smaller firm's stable of fashion designers. (The Brooklyn startup, in the words of co-founders Amanda Curtis and Gemma Sole, aims to "launch the next Michael Kors" by tapping undiscovered talent.) For Macy's, it's a bid to woo millennial shoppers to Macys.com. For Nineteenth Amendment, it's a once-in-a-lifetime opportunity to tap the resources of a $23 billion retail behemoth.
And appropriately, it's a dream attained: One year ago, Nineteenth Amendment was selected for the first class of the New York Fashion Tech lab.