Via The Sunday Business Post: Despite being located right between the two biggest fashion technology hubs in the world, Dublin is only starting to find its feet in a growing tech sector.
A few Irish start-ups have caught attention, but the lion’s share of investment remains in the United States and Britain. The arrival of multinational Zalando could provide a massive boost to the sector here. The Berlin-based business, with more than 6,000 staff worldwide, has opened an office beside Google’s European headquarters on Barrow Street and plans to hire 200 staff.
The consumer-focused brand has driven its growth since 2008 via data analytics. “We looked at what kind of search volumes were there for shoes. We didn’t just go for the big brands, we looked at long search terms; so instead of Adidas, we looked for Adidas Dunbar size 38,” said Robert Gentz, co-founder of Zalando. “This kind of insight you can gather means the business can optimise for inventory, direct payment methods, and drive efficiencies across the entire value chain. “We can understand which kind of customer is going to buy which kind of merchandise.”
The Dublin operation is primarily focused on engineering as Zalando looks to drive more insights from the data it gathers. “There’s a huge amount of variation in the world of fashion. Even what a size means depends so much on when it was made and who it was made by,” said Eric Bowman, Vice-President of Engineering at Zalando. “There’s a lot out there to discover about the buying patterns of our customers and potential customers. We think we can create a rich view of consumers of fashion and how they behave.”
The arrival of Zalando in Dublin has offered a boost to Ireland’s emerging FashionTech start-up scene. Many of the businesses that have tried to break into the sector from here have struggled to find support locally. Opsh, a fashion retail software firm that is easier to pronounce if you impersonate Sean Connery, is a family run business that is making a big drive in Britain at present.
“The more you repeat it, the easier it is to say. We get a lot people asking about it. There was a sea of FashionTech people coming out and we had to cut through the noise,” said Jennie McGinn, co-founder of Opsh. “Our team came up with 40,000 derivatives of the words shop or shopping and the shortlist came to seven. Opsh scored the lowest on pronunciation but it scored the highest on everything else. It had the dotcom free, it was easy to turn into a verb, good branding. Ultimately what did it for us was that we were building a new word,” said McGinn.
Her first foray into the FashionTech space grew of out a blog she ran with her sisters called What Will I Wear Today. “We didn’t even know what WordPress was when we started. It morphed into a place with regular daily content and when we started there was only a handful of Irish fashion blogs.” The site had expanded to organising photo shoots and high profile interviews but, despite broad public interest, it wasn’t generating revenue. “We were winning awards and getting approached by brands, but we weren’t monetising it,” said McGinn.
— OPSH (@_OPSH) June 15, 2015
The group of sisters, from Eadestown in Co Kildare, joined the NDRC Launchpad accelerator where the concept focused on retail. McGinn and her sisters built a company called Prowlster which worked with young designers and boutiques. That business was later sold to Sweatshop Media. McGinn moved away from Prowlster in part because of customer feedback. Instead, the businesses decided to look at the more mainstream high street market.
“People were asking us when we were going to get retailers they knew onto our sites. We starting seeding the idea with advisers and investors we had worked with before. Everybody, resolutely, disagreed with it. There were a lot of flags not to pursue it, but we looked at where we had been working, we intimately knew the problems shoppers experience, so we just ploughed on ahead,” said McGinn. “At the moment the online high street shopping experience is fragmented. The shopper wants the easiest way to shop with different brands.”
Despite the initial setbacks, the firm got funding from the Dublin Local Enterprise Office and later from British investors. Opsh launched in beta in June 2014 with the full launch last February. The company provides a platform where shoppers can access 15 high street retailers with one account and one checkout, with another 50 retailers due to come on board by September. “We are hard launching into Britain in September, the seeding and soft launch is happening now. We are looking to hit 100,000 registered users by December, that’s our big goal,” said McGinn. “We are really drilling down into our analytics to better manage our marketing. It’s all about being really clever with numbers and how to make a reasonably tight marketing budget go far.”
McGinn said Dublin had an opportunity to act as a launchpad for FashionTech in much the same way as other parts of the tech industry. “London and New York are the twin pillars of FashionTech conversation. Our experience up to this point is that there isn’t an appetite for it, in investment terms, in Ireland. Most of our funding came from Britain. It’s an enormous task just trying to find even interest here,” she said. “An awful lot of the start-ups working in FashionTech in Ireland have to deal with the same issues. They either have to go to Britain or the US for investment. There’s a skill set and a market here but there isn’t that investment appetite. “Even prior to developing Opsh, we got the sense that there is a risk-averse attitude towards consumer-focused businesses. So despite that it’s good to see a small but growing range of businesses in this space here.”
The challenge of Dublin being under-served as a FashionTech hub is being circumvented by one Irish firm by bringing its technology directly to target markets. Love and Robots uses 3D printing to produce custom-made jewellery which is manufactured close to the end customer. Like Opsh, Love and Robots was founded by a group of sisters. Aoibh, Emer, and Kate O’Daly first conceived the business idea in 2012. The trio, from Rathgar in Dublin, had backgrounds in architecture and marketing before opting to go into the fashion sector.
The aim of the business was to provide quicker and more affordable access to jewellery products for customers around the world. The key selling point of Love and Robots is the facility for customers to design their own products. “The big move was to allow the customers to take the tools to create something unique that they want. We launched the full platform in October 2014,” said co-founder Aoibh O’Daly. The start-up won the DCU Ryan Academy programme in the first half of 2014 which subsequently led to financial backing from Frontline Ventures. In November the business was recognised at the Dublin Web Summit, winning the Spark of Genius award.
Love and Robots closed its seed funding round in March, raising €300,000 including funding from Enterprise Ireland and further support from Frontline. The business now has seven staff and is making a big push into the British market and is looking at pushing for a second round of funding around the end of the year. “The old format was that large quantities of jewellery would have to be produced, get shipped around the world, and you’d hope they sell,” said O’Daly.
The Love and Robots co-founder said the drive now was to use its seed investment to build its sales operations with a goal of being profitable by autumn. “We are concentrating now on sales and marketing. We are still in a growth phase, we aim to be profitable by October which is why the focus has shifted to marketing,” said O’Daly. “We have big goals and we think we can make them. Emer and I are almost exclusively focused on marketing now whereas she would have been much more on the product side before. “The most important thing right now is sales. We want to keep going and take on more employees.”
Despite its relatively small full-time staff, intern partnerships have helped build out Love and Robots’ development. At any one time the company has up to seven interns, from a mix of programmes including partnerships with NUI Maynooth and the EU-USA project. “There’s a lot of research that needs to be done in our area, particularly on the marketing side and they have proven good at using that to provide ideas. Even small stuff like regionalised hashtags can make a difference,” said O’Daly. “The product development side has the longest phase in terms of getting the interns up to speed but it’s a symbiotic relationship.”
The business has recently expanded its market focus to work with precious metals and develop lines for men. “We have a range of jewellery in sterling silver and gold and we have started working on men’s accessories,” said O’Daly. “We studied our customer base, and discovered 40 per cent of them were men. One of the biggest pieces of feedback we have got from both male and female customers is that they wanted more accessories for men to wear. “We do 3D printed bowties and are also releasing laser-cut bowties in time for Father’s Day. We are doing cufflinks as well.”
— Love & Robots (@LoveandRobotsHQ) June 10, 2015
Shipping costs are kept down by having items manufactured with 3D printers in the location where customers are. Right now the business has partnerships in the United States, Britain, and the Netherlands. Designs get sent to these firms and are printed on site before being shipped to local customers. The business is exporting into other markets but those products are made in Ireland, so shipping costs remain an issue.
On the road
“Right now, it is mostly Britain and the US. We have made a few inroads into Australia, France, Belgium, and Spain,” said O’Daly. “At the moment, those deliveries are coming from Ireland, so they take longer to get to those places. Having partners in places where we sell reduces shipping time and costs; it’s also much more environmentally friendly.”
As part of its current sales push, Love and Robots has increased its investment in digital marketing. “Britain is the market we are looking at now. It’s handy because it’s close, and we get better ideas around distribution. We are testing our digital marketing strategies there,” said O’Daly. “Facebook is sort of where it’s at for us. The problem with Google is the customer has to be looking for you and people don’t really search for customised 3D printed jewellery whereas on Facebook you can find people similar to our existing customers. Facebook has more information about people’s personalities,” she said.
The business is also using more direct marketing approaches to put Love and Robots in front of potential customers. “There’s a huge push for digital marketing at the moment but we are also trying a few other routes. We had a pop-up stand in Selfridge’s in London: they are running a series showing businesses who are changing the way work and life is changing, so we showed our 3D printing projects,” said O’Daly.
The Love and Robots staff also wear their products regularly in public, in order to spark conversation. “I was wearing a pair of purple earrings we had printed out, and the woman behind the counter in Boots asked where I got them, so those sorts of conversations lead to getting more people to hear about us,” said O’Daly.
Originally published in The Sunday Business Post.