Stylitics, the artificial intelligence-powered visual merchandising platform, raised $15 million in a Series B funding round that brings its total funding haul to $21 million. PeakSpan Capital led the round and Trestle LP, a new venture capital firm that launched just this month, also participated.
Stylitics, whose clients include Gap, Under Armour, Macy’s and Calvin Klein, helps fashion retailers create rich outfitting experiences across a range of channels, from e-commerce and advertising to social, direct mailing and brick and mortar, using a mix of the brand’s product and studio photo assets. Styling suggestions nudge shoppers further along the purchase funnel by giving consumers information on how a particular item of clothing can work for their particular taste and wardrobe, and with other products offered on the website.
And though Stylitics employs AI to do much of the heavy lifting that makes the platform tick, it also incorporates the human touch that can elevate head-to-toe looks. Real-time processing and insights mean Stylitics takes into account weather and location as well as products not currently in stock, or SKUs that aren’t performing well.
The platform is part of the expanding market for AI technology in retail, valued at $720 million last year and on track to grow at a combined annual growth rate of 35.4 percent through 2024, according to data from Prescient & Strategic Intelligence.
Stylitics says brands and retailers using its platform see units per transaction rise 23 percent and conversions trend 1.8 times higher. And a 21 percent lift in average order value has been instrumental in driving an additional $300 million in revenue for its client base.
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“Brands and retailers are really trying to drive AOV increases, upsell, and discovery. It’s really hard to show people a bunch of additional product from other categories in traditional product recommendations,” Rohan Deuskar, founder and CEO of New York City-based Stylitics, told Sourcing Journal.
“But outfitting recommendations done the way we do it—visual, many on the page, five or six items per look, all in stock, etc.—drives cross-sell and AOV without customers feeling like they are being shown a bunch of random stuff,” he explained. “In fact, retailer studies have found customers ‘appreciate’ being shown those products in that format, as it feels like a valuable service, even though now they’re being shown 10-15 additional products in limited real estate.”
The low barrier to entry for starting an e-commerce fashion business means competition online increases seemingly by the day, especially from low-cost outlets out of production powerhouse China. With so many options bombarding consumers, offering a first-rate experience that positions garments in the best light and complete looks can help retail winners stand out from the crowd. Outfitting also can bridge the gap between the two-dimensional online journey and the tactile experience of touching and trying on clothing in stores and pulling together complementary styles.
“More and more people are purchasing products they have never touched or experienced in the real world and retailers are challenged to create digital shopping experiences that provide excitement, context, and inspiration,” Deuskar pointed out. He believes the new $15 million infusion “validates the increased demand brands have for more intelligent and high-performance visual content” that differentiates the shopping experience.
“At a time when the retailer with the best visuals wins, we are offering a new category of content that is on-brand, dynamic, personalized, and outperforms the others with the value it creates,” he added.
“More broadly though,” Deuskar told Sourcing Journal, “this is about elevating and resetting the customer experience. If you’re a retailer or brand today, you need to excite and inspire, even if it’s a black t-shirt. The shopper is going to endlessly browse across dozens of sites, posts, emails, etc. until you give them a reason (besides discounts) to stop, look, think, and then buy.”
Brands and retailers can choose from a number of tech-driven styling approaches, including Complete the Look, Visual Outfit Recommendations, Shop the Model, Outfit Shops, Mix & Match and Gift Galleries.
“With the rapid growth of digital commerce, retailers are scrambling to keep pace with the consumer demand for more visually exciting and compelling shopping experiences,” said Phil Dur, who co-founded PeakSpan Capital, adding “we see Stylitics solving a very real need for brands to extract more value out of their creative assets and scale their content in a fast and affordable way.”
Stylitics said it plans to use the new capital to advance new forms of shoppable content, content-fueled e-commerce and rich in-store experiences.