The main reason online shoppers return apparel they purchase online is because items do not fit well. It’s estimated that returns can cost as much as 66% of an item’s selling price when considering processing, inspection, discounting, and liquidating. Anything that can be done to reduce the number of returns assists retailers and brands’ bottom lines. Zelig Technology has developed a virtual try-on and styling technology that uses computer vision, machine learning, and AI to recreate an in-store fitting experience. Shoppers are able to see exactly how clothes, footwear, and accessories look on their own body types. Consumers are also able to seamlessly swap out different combinations as well as save and share different looks. Zelig will be launching shortly and plans to offer the technology as an integration solution into the online channels of both retailers and brands directly.
LA TechWatch caught up with Zelig Technology CEO Sandy Sholl to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
Zelig raised $15M in Series A funding. Hilco Global led the round, which was joined by global luxury investor Bezikian Zareh.
Tell us about your product or service.
Zelig is an AI-powered business solution that offers a hyper-personalized online shopping experience that recreates the in-store fitting room experience. The platform combines AI, machine learning, and computer vision to show shoppers how clothes, footwear, and accessories would look on their own body type. Shoppers can swap out items, instantly change their looks, and save their complete outfits to share with friends.
What inspired the start of Zelig Technology?
We wanted to permanently change the way people shop on e-commerce sites by making the experience more personal, enjoyable, and similar to shopping in real life, where you can take items into a fitting room, try on different combinations to create complete looks, and get personalized suggestions from an in-store stylist or associate.
We’re committed to creating a more sustainable fashion industry using technology and reducing returns is a big part of that. We designed Zelig to help e-commerce shoppers better visualize how items and outfits would look on their own body type to drive purchase confidence, which boosts AOV for brands and helps them minimize returns.
How is it different?
Zelig is the only virtual try-on and styling solution that enables shoppers to change and visualize entire looks as they shop across an e-commerce site. It gives shoppers more confidence in their selections and makes online shopping more engaging and enjoyable. Zelig also allows brands to capture data insights they can use to further personalize marketing and the customer experience, leading to higher customer lifetime value.
What market you are targeting and how big is it?
We’re targeting the global fashion e-commerce market, which Statista estimates will be worth more than $820B this year and grow to more than $1.2T by 2027. Zelig is designed to be used by all fashion brands.
How are you preparing for a potential economic slowdown?
Any slowdown in the economy would likely heighten demand for our solution. If consumers are spending more carefully, they will be looking to purchase only items and outfits they are confident will look great on them. Fashion retailers and brands would be looking for innovative technology solutions that drive conversion, AOV and lifetime customer value while reducing the costs associated with returns. We see Zelig as a solution that help brands recession-proof their businesses.
What was the funding process like?
Adam and I self-funded Zelig for three years before partnering with our current investors. We’ve worked with our lead investment partner, Jeff Hecktman of Hilco Global, in the past and also with global luxury investor Bezikian Zareh. We’re pleased to be partnering with them again, this time on Zelig.
Zelig’s advisory board consists of executives with deep expertise in technology innovation and luxury, including Michelle Lee, former VP of Artificial Intelligence at AWS and Under Secretary of Commerce and Director of the U.S. Patent and Trademark Office, and Kirk Posmantur, Co-Founder of 25 Madison and Chairman and CEO of Axcess Worldwide.
What factors about your business led your investors to write the check?
Adam and I have worked with Hilco Global in the past through MadaLuxe Group, the luxury distribution company we founded in 2010. Thanks to our long history of success, our investors were confident that we have deep knowledge of how the fashion industry works and how to solve some of the biggest challenges retailers, brands, and their customers, face.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
To execute efficiently and be scalable, it takes a proper infrastructure. Simply put, without an infrastructure, you cannot scale. You have to have the bare minimum funding and capital for your people to execute.
Where do you see the company going now over the near term?
We’re focused on signing our first retail partners to officially launch within the first quarter. At launch, shoppers will be able to choose one of Zelig’s models, selecting from a range of photos of people with diverse body types, skin tones, and hair colors. Zelig users will soon be able to upload a photo and virtually try on and style outfits and individual items using their own image. We’re also going to invest the new funding in deepening Zelig’s personalization capabilities and building out additional features.