The fashion industry is filled with many hurdles and gambles. In the midst of maintaining inventory, predicting fashion trends months in advance and gaining exposure for your brand or business, there is also the matter of trying to reach out to the right buyers and/or designers. But thanks to Jill Sherman, CEO and Co-Founder of Modalyst, a curated, B2B marketplace connecting emerging designers and independent boutiques, navigating the retail landscape just became easier.
Through the accessory-focused platform (which has also begun to include home décor and gifts), boutiques can search through designers’ virtual showrooms and use collective buying to gain the same purchasing power as larger retailers, reach minimum shipment requirements or receive wholesale deals, while designers can gain access to new buyers and market their brands on a global scale. And thanks to short lead teams and low minimums, boutiques can test different brands and products with a rapid reorder rate and less financial risk.
An in-season, continuous selling cycle means buyers can keep up with the latest fashion trends.
“Boutiques are just like any startup. They need to test to see what works for them, and then enhance on the things that do,” said Sherman.
Shipping rates and times are established per designer and item, but the average shipment takes 2-3 weeks.
Launched in January of 2013, the inspiration for the platform began a few years earlier, when Sherman, while working as manager of a buying team for Harvey Nichols in Hong Kong, became frustrated with the entire buying process.
“I spent 2 months every season on the road going between cities and countries trying to source products. Even today, boutiques go to trade shows 2-3 times a year and are forced to buy all of their inventory during that specific time. It’s a huge inventory risk they’re taking on, without knowing what the trends are going to be.”
It wasn’t until attending MIT’s Sloan School of Management that Sherman met her co-founder and COO, Alain Miguel, and the idea for Modalyst began to form.
Miguel had previously designed a men’s polo collection while an undergrad at Yale. While it was successful on campus and in the surrounding area, Miguel shut down the line after struggling to meet distribution needs beyond the local New Haven market.
As Sherman and Miguel discussed the issues they faced as a buyer and seller, they realized they could create a solution for both problems.
“We both went to school with our hearts set on creating a company, and found a perfect match in each other. Alain actually dropped out of MIT so that he could co-create this with me,” said Sherman.
Within 6 months, the site has acquired boutiques and designers from 114 countries, with representation on every continent except Antarctica. The startup originally focused on New York, but Sherman and Miguel soon found a demand for their services on a global scale.
“We saw that we could create relationships amongst groups of people who wouldn’t be able to do so on their own. We expanded internationally very quickly, but it hasn’t been a hurdle at all.”
Collective buying allows boutiques to add their purchase requests to any existing orders without having to contact the other stores directly. However, boutiques can reach out to each other to form private buying circles.
“Kuwait will join an order from a Chicago store, San Francisco will join into that, and what you end up with is a circle of boutiques that don’t know each other, but all have an interest in the same product…If a group of boutiques meets the wholesale discount collectively, they all get that wholesale discount.”
The 650 boutiques that are currently Modalyst members can search for items by color, design material and category, with price points ranging anywhere from $7 to $2,300, wholesale. Listed next to each item is the wholesale pricing, as well as the suggested retail price.
All that’s required from a boutique is a tax ID number to receive free membership in Modalyst.
Automatic notifications are sent when designers add new items to their virtual showroom. An internal communication system on the site means boutiques can reach out to designers to ask questions or discuss exclusive offers.
Of the 850 designers that have requested an invite, 200 have been selected to join the curated site.
“We ask that our designers have awesome aesthetics, great designs and the ability to fulfill orders with short lead times,” Sherman added.
Once notified of their acceptance, designers sign a 12-month minimum contract, which includes a low membership fee, plus commission. Exclusivity of the lines is not required and preexisting relationships designers have with boutiques results in a free commission. Members can then upload their inventory to their virtual showrooms.
Traffic to the site has largely been driven by word-of-mouth, thanks to designers talking to one another, mentions in classes at FIT and contributions to panel discussions, but the marketplace also actively seeks out designers through trade shows and by contacting other sites.
“Almost 100% of the people we reach out to decide to join us.”
A profile of each designer accompanies their virtual showrooms, where they can upload their backstory and press and mention the stores that they’re selling to, as well as any branding imagery they might want to share.
“It’s a lot about developing the stories of the designers as well as their products.”
Designers are promoted through social media, a weekly newsletter sent to everyone who has contacted the site, and posts on Modalyst’s blog. The site is also creating relationships with other bloggers and will partner with Nolcha Fashion Week, a showcase for independent designers, on September 12th.
Aside from marketing, the platform also provides designers with the chance to receive continuous feedback on their collections.
“Designers can see which items are clicked on the most and which ones aren’t clicked on at all. It’s a way for designers to understand a little more about how and who’s reacting to each product.”
Another added perk for designers is the auto-populated line sheets generated by the site, which are downloadable and exportable for them to use externally from Modalyst.
“That feature is really interesting because it’s something that designers struggle with a lot. If they update their pricing or a description, that’s something we’ll do automatically for them.”
Learning how to create an online business without having a technical background has been a challenge for both Sherman and Miguel, but having the support of their team, which consists of a coder, media and marketing managers, plus office interns, keeps them motivated.
“We whole-heartedly feel that we’re creating tremendous value for customers. We want to help these brands grow and prosper, and for boutiques to be able to stay alive and be a lot more agile with their working capitals.”
And while Sherman wishes there were more tech developers and engineers in the fashion tech scene, she is grateful to have Modalyst headquartered in NY.
“My experience in retail before is not as community-based as the fashion tech scene. We’re all defining it together and we’re all helping each other grow along the way.
The support of the NY scene is evident in the several nominations and honors the platform has received, including being the NYC Crowdfunds Winner for 2013, a Fashion 2.0 Best Fashion Startup Nominee, a Take the Helm Semi-Finalist, a Women 2.0 SF Pitch Competition Finalist and a Decoded Fashion Hackathon Semi-Finalist.
Currently, the company is in the middle of raising their seed fund. As the platform continues to expand, Sherman is excited for the future.
“We plan on being the go-to marketplace for accessories, home goods and soon apparel, and for cool, awesome designers to be discovered.”