It’s official: Nobody pays full price for fashion anymore. Whether a consumer calls herself a die-hard discount chaser, a “Maxxinista” or outlet obsessed, few things have her reaching for her wallet faster than a sign boasting 40 percent or more off everything.
Off-price retail is hot, and the water feels so fine that the country’s biggest department stores are diving in with their own discount concepts. Macy’s is set to debut six Backstage stores this fall, while its sister chain, Bloomingdale’s, started introducing outlet locations in 2010 and now has 13. Nordstrom, Neiman Marcus and Saks Fifth Avenue each have a host of discount emporiums, too.
Even traditional retail brands are investing in the space. When Gap announced plans in June to shut nearly 200 stores over the next few years as part of a cost-saving turnaround plan, it said the closures would not impact its Gap Outlet or Gap Factory stores. Similarly, J.Crew expects to open 21 off-price outlets in 2015.
Furthermore, nearly 8,500 buyers walked the 132,000-square-foot show floor at February’s edition of Offprice in Las Vegas, a 5.5% uptick in attendance from the previous year, as an increasing number of retailers sought out goods at up to 70 percent below wholesale costs.
And the category isn’t expected to cool off anytime soon, according to Moody’s Investors Service, which predicted the off-price segment will grow by up to 8 percent over the next five years, compared to the 4 percent the apparel and home industries are expected to grow in the same timeframe.
With all the B2B e-commerce platforms available for brands and buyers in the full-price arena (UBM Advanstar’s ShopTheFloor and Global Apparel Network’s Pop-Market, to name a few), it makes sense that someone would come up with a similar solution for the off-price world.
Enter InTurn, a global marketplace that launched in beta in August 2013 and aims to efficiently and easily offload end-of-season and excess inventory to retailers in private online showrooms. The brainchild of co-founder and CEO Ronen Lazar, a self-described serial entrepreneur, the tool uses technology to automate the sale of off-price merchandise and boost the bottom line.
“It’s a liquidity solution where sellers of goods have the ability to monetize them in the most efficient way and that translates into the workflow which historically has been extremely manual in nature, hedging from the fact most sellers are still operating off of Excel spreadsheets, combining the data coming from different systems and manually preparing the assortment to send to individual buyers one at a time,” Lazar explained, jokingly noting that InTurn is the first B2B innovation in the off-price space “since Microsoft introduced Excel.”
Since emerging from beta a few months ago, InTurn has big plans for the future, including eventually expanding overseas. And though Lazar remained tight-lipped on exactly how much companies pay to avail of the service, as well as the names of the brands and retailers he’s been working with, he did offer that InTurn generates revenue through monthly subscriptions and revenue shares.
He partnered with Beanstalk Ventures, a seed investment firm launched by Bluefly Founder Ken Seiff, and Silas Chou’s Novel TMT to develop the cloud-based, mobile-friendly solution which allows brands, big and small, to quickly upload their off-price inventory onto a single brand-specific platform.
And it’s not just for finished products. Lazar and his team have come up with a number of innovations up and down the supply chain. “Factories can monetize excess fabric by showing virtual goods that can be made with that fabric,” he said.
The archaic spreadsheet system has been replaced with the precise information buyers need to negotiate deals. “To that extent, if a brand has multiple systems and needs to export bits and pieces into Excel, our platform is capable of sucking that data in from all the systems, combine that with images, assemble it in a content-rich environment, all sitting in one repository, that translates into an e-commerce-like setting where now you can visually see what it is,” he explained, adding that he heard from many off-price buyers that when they receive spreadsheets the information is so limited that they usually end up Googling style numbers so they can see images of the merchandise, which eats into the timeframe.
“In this part of retail, there’s a very short half-life for these goods. Value depreciates at a very rapid pace,” he pointed out, adding that what usually starts out as 40 percent off wholesale pricing becomes 70 to 80 percent off as time proceeds through the season. “With InTurn, there are numerous ways for sellers to optimize the return on their goods and for buyers to optimize access to goods and pricing.”