In this third installment of our series introducing you to the New York Fashion Tech Lab 2016 class, we’d like you to meet Closet Collective. Closet Collective has created a marketplace for women to rent designer fashion. We caught up with Seema Gohil and Claire Allison, Closet Collective’s co-founders, to learn more.
Describe Closet Collective.
Closet Collective is a peer-to-peer community where women can discover and access everyday designer fashion at an affordable price. Through technology and advanced logistics, we are connecting any woman to any closet or emerging designer across the country. Women actually started the sharing economy when we first raided the closets of our friends and sisters–Closet Collective is just bringing that age old behavior into the age of Airbnb.
What was your inspiration behind starting Closet Collective?
The inspiration for Closet Collective came about very organically. The co-founders, Seema and Claire, have been friends for over a decade. When Seema was graduating Columbia Business School she realized she had nothing to wear and as a typical broke student, she turned to her friend, Claire, to borrow something. As it was the day before graduation, Seema didn’t have time to go over to Claire’s and try everything on so she was trying to convince Claire to take pictures of all the potential options so Seema could tell her which pieces to bring that night to drinks. As much as Claire was very happy to lend her closet to her friends, taking pictures of everything to facilitate that was just too much work. But it started a conversation over a bottle or two of wine that evening. In the age of Airbnb and Rent The Runway, why didn’t something exist that made the process of borrowing clothes easier? And could they actually take it one step further and expand the community that women can borrow from, from just their friends to any woman whose style and size they shared?
Also, by creating a rental platform, they could incentivize girls like Claire to list their closet online. Over the years, Claire has spent a small fortune on her closet but she’s never sold any of it. The small resale value was just not worth giving up the option to wear it again one day. So even though she only wears probably 10% of her closet, she’s just not willing to part with her pieces. But the idea of monetizing her closet through rentals made so much sense!
What value does Closet Collective have compared to other companies in the fashion tech space?
Closet Collective has a unique position and role in the fashion tech space as it’s a marketplace and not a product or a SAAS platform that can be sold in or to a retailer. We’re offering a tool for the consumer of the retailer to help them get more value from the pieces they buy. We believe that the sharing economy is not about access or ownership, it’s about combining the two to help consumers get more overall value. Like many companies in the fashion tech space, this is a new idea and a new technology but we aren’t addressing the process of buying and selling smarter but rather the actual consumer behavior shift towards renting and the changing value of ownership, especially among the Millennial generation.
Tell us about your journey to get to New York Fashion Tech Lab Class of 2016?
Closet Collective is very much a start-up story. When we first came up with the idea for Closet Collective we took a Lean Launchpad class at Columbia University with Steve Blank and Bob Dorf. We left the class with the “just go do it and go talk to your customer” mindset. We basically accosted women on the streets of New York to see what they thought of the idea (we would stand over women trying to sunbathe in Bryant Park and block their sun until they talked to us). We put up an absolutely terrible website overnight and got our first order the next day from one of those girls in Bryant Park. After the class, we thought we would need a better website so we built wireframes and went in search of a development team. We were completely unprepared and underfunded for the quotes that came in (funding being what we had in the bank). So we decided to teach ourselves how to code to get the site up and we launched a few months later. In between building the site we would host Tupperware type parties with friends and all of their friends to tell them about what we were doing and to get them to list their closets. These were the first products on the site (many of them are still renting today).
We have since pivoted to focus on everyday designer wear. Not only were our customers asking for it but it matched the inventory women have in their closets. One of the reasons Rent The Runway has done so well is that it fills the holes in a woman’s closet. Women don’t have dozens of cocktail dresses and evening gowns but they do have wrap dresses, leather jackets, coats and pants. And since on average women only wear 49% of their closet, a lot of these beautiful designer pieces are left just hanging unworn.
As we’ve watched our customers interact with the platform we were noticing a trend with our lenders; they were taking the income they made by renting their pieces out and buying more pieces to rent. They were asking us which designers were renting more and what pieces there were a lot of demand for and the would go out and buy them. Our top lender last year made $5,500 on her closet and she used that to justify buying 300 new pieces to put on the site because she knew she could subsidize the price by renting the items out. This behavior is what led us to the NYFT Lab. Retailers are benefiting from our platform and we want to bring them into the conversation.
What has been one of the most challenging parts of getting started? How did you overcome this and what did you learn?
The biggest challenge of a two person team is prioritizing because there is always so much to do and everything is important. We learned that we had to divide and conquer and assign roles based on our strengths.
What has been one of the most rewarding aspects and why?
We often don’t have time to sit back and think about the achievements but when we do it’s pretty great to reflect on the fact that we took an idea to a platform with over $1.5 million in virtual inventory and over 500 designers (including emerging designers that are exclusive to our community). This was a totally new concept and we built something that we have loyal customers who return every month for new pieces.
What’s next for Closet Collective?
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