The conundrum of online apparel shopping is that even if accurate product descriptions and measurements portrayed, shoppers may still not like the sizing, look or feel of a product once they finally receive and try on the garment. And with that, returns become a time-consuming hassle for the shopper and a money pit for the retailer.
TryNow, a software platform that enables consumers to try items at home before buying, raised a $12 million Series A funding round from Shine Capital, Craft Ventures, SciFi VC, Third Kind, as well as Zachary Perret and William Hockey, co-founders of fintech company Plaid.
Shoppers using the service can try fashion items for free, seeing a $0 cart upon checking out, and only pay for the items they keep.
Currently, TryNow integrates with Shopify to assist brands on the Shopify Plus enterprise platform, which is designed for retailers with more than $1 million in annual revenues. Size-inclusive women’s apparel brand Universal Standard, women’s apparel brand Roolee, men’s performance apparel brand Western Rise, and women’s swimwear brand Solid & Striped are all Shopify Plus users that have established Try Now Buy Later programs.
Polina Veksler, CEO at Universal Standard, said in a statement that the platform has “become a key driver of growth and profitability for our business.”
TryNow says its brands see a 63 percent increase in average order value, a 22 percent increase in conversion rates and a 76 percent increase in return on ad spend when using the service.
The startup, based out of San Francisco, already works with approximately 50 up-and-coming online retailers doing between $10 million and $100 million in annual revenue.
TryNow’s integration capabilities are designed to make the platform more flexible for its partner merchants. The platform integrates within Shopify’s checkout, and is compatible with returns management software such as Happy Returns, Loop Returns and Returnly. Additionally, it is compatible with buy now, pay later platforms including Afterpay, Klarna and Affirm, as well as Klaviyo’s email and SMS marketing software.
Retailers can customize the program and adjust settings for trial length, return window, product eligibility and cart limits.
The company claims it has a 100 percent capture rate for kept items that consumers refuse to return, with its own proprietary fraud prevention system.
TryNow also provides analytics to manage the risk around any deal. Procuring the item doesn’t trigger a payment; instead the payment is only triggered when the shopper confirms it is either keeping the item or when returning other items.
Because shoppers are not charged until after their trial, there is a delay until cash is captured and revenue is recognized. A gross sale is not recorded until a shopper has been charged, which means that returns processed during the shopper’s trial do not show up in the returns line on financial reporting. These “during trial” returns are considered re-racks—brands cannot process a refund on an item that has not yet been charged for, the company says.
“Only around 3 percent of online shoppers convert to purchase,” Benjamin Davis, TryNow’s founder and CEO, said in a statement. “Can you blame them? Could you imagine an in-person shopper having to swipe their credit card before taking items into a fitting room? It is completely unnatural, yet this is exactly what we are asking of online shoppers.”
Because the platform can help boost consumer confidence in a purchase once they’re able to try out a garment before committing to its purchase, TryNow says this means apparel sellers should be able to reduce their reliance on discounts as a means to spur conversions.
Additionally, TryNow’s consultative approach helps to ensure brands have the support they need to launch and grow their try-at-home programs. The company says it offers full-time support from experts in e-commerce strategy, analytics and customer experience.
Alongside the funding announcement, TryNow also named two key executive hires from two companies with business models that have helped shape the platform’s offering. Former Stitch Fix strategy leader Jessica Baier joined the company as vice president of growth strategy, and Jonathan Kayne, who led product partnerships at Affirm, is TryNow’s new vice president of platform.
The company is up against competition in the space, with the most obvious being Amazon’s Prime Wardrobe, which allows shoppers to try up to eight items before the weeklong trial period runs out. But Amazon has limited the service to its own apparel brands and hasn’t rolled out the service to other sellers on its platform.
BlackCart, which raised $8.8 million in January, also provides “try now, pay later” as a service for apparel and other goods, and its plugins integrate with other storefront platforms beyond Shopify including Adobe’s Magento, BigCommerce, and WooCommerce. This platform takes a different approach to offsetting risk, as kept and returned items are reconciled automatically and charged for accordingly, transferred directly to the retailer’s bank account.