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Zozo Scraps Plan to Sell Cheap, Customized Clothing Online

Japanese e-commerce giant Zozo Inc. is ditching its online business based on proprietary fit technology and going back to the drawing board.

In an abrupt about-face, the popular e-tailer announced last week in an Instagram post the closure of its its online operations in the Americas, Asia Pacific and the Middle East.

The post read: “We are sorry to inform you that we have closed our US and European shops and have discontinued services outside of Japan. The ZOZO website, app and measuring process will be accessible to existing customers through May 26, 2019. For mire information, please go to zozo.com. Thank you for being part of our journey. Our mission will continue.”

As Japan’s largest online retail company, Zozo made headlines last year through its foray into custom clothing. The company’s Instagram-worthy polka-dotted bodysuit (dubbed the “Zozosuit”) was designed to create a 3-D model of the wearer’s body, ensuring a tailor-made fit for virtually any garment purchased through the site.

The company treated the Zozosuits as a marketing expense and sent them out for free to three million shoppers. The experiment fell flat, however, with consumers complaining of sizing issues and delivery delays in their subsequent clothing orders. After failing to meet ambitious sales goals, the company began phasing out the Zozosuit in November 2018.

Yuki Kanayama, chief innovation officer at unit Zozo Technologies told Reuters that the Zozosuit endeavor was not a failure, but simply the company’s first shot at a made-to-measure business. The company is reportedly now pivoting to focus on optimizing the user experience for its online marketplace, Zozotown, which has grown from 100 sellers to 1,200 over the past year.

“It’s about search,” Kanayama told Reuters. “When you have more products, search becomes more difficult, so it’s about things like personalization and discovery—not only things you want but things that get recommended and that you discover.”

Resurrecting a made-to-order service is “still under debate internally,” Kanayama said, but will take a backseat to the company’s efforts to fortify its online Zozotown marketplace.

Since last July, blunders and upheaval have seen Zozo’s stock slide nearly 60 percent since valuing the company at 653 billion yen ($5.8 billion). Zozo secured a 15 billion yen ($135 million) commitment line from banks in March of 2018, according to Reuters.

Whether the company can save its image and its finances will be a key focus area this week, when Zozo reports annual earnings and guidance for the current financial year.

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