All sewn up: online fashion platform Thread scoops H&M funding

A Thread.com stylist at work.

Thread, the menswear fashion e-commerce company that offers a bespoke shopping service to its customers by combining AI with a personalised stylist service, is on track to become a major player on the fashion landscape after securing £16.7m in funding from the H&M group.

Established six years ago by Kieran O’Neill and Ben Phillips, CEO and CTO respectively, the brand has spent much of its early stages in development, fine-honing its algorithms and perfecting its offering. Customers are asked to subscribe and register their personal details and preferences, which thereafter are used to tailor the fashion items presented to them, aiming to cut down on exhaustive scroll time and target what individuals are looking for. The tech side of things is complemented by real personal stylists, rather than robots, who are on hand to offer advice and help customers consider options they might not have previously thought of, essentially acting as a membership service with no membership fee.

“If you try to do it with one, it doesn’t work,” says O’Neill. “With just humans, it’s not scalable unless you charge a lot of money for it and then if its just algorithms, they don’t understand creativity and taste… by combining the best bits, we create an experience that we think is better than either can [provide] alone.”

Early approvals boded well. The brand was selected by Y Combinator – the Silicon Valley-based investment company that provides funding and mentoring for innovative new businesses – as one of the 20 most promising start-ups and attracted $10 million seed funding by Balderton Capital in its first round. Now, with this second round of funding, the partners are looking to expand on the omnichannel experience they offer and and take the brand from the start-up sphere and into a household name.

“We plan on investing in data science, AI, and engineering design so we can do a bunch of things that customers want and that aren’t possible in e-commerce places, so, for example, seeing the clothes on a model who looks like you, or having the description of the item know that you are tall, so say that these shoes will look good on you,” says O’Neill, who has identified Thread’s “sweet spot is [men in their] late 20s to late 40s” – men who, he says, don’t follow fashion influencers but still care about fashion. “We want every last touchpoint highly tailored so it is like the shop has been built for you.”

So far, Thread has succeeded in securing a comprehensive offering. Among the 536 brands it stocks, there is a healthy mix of luxury (Burberry, Boss and Belstaff), contemporary (Reply, Superdry, All Saints) and high street (New Look, River Island and Marks & Spencer) options.

Encouragingly, statistics have started to show that because of the way that the site presents and suggests its products, its brand partners have started to see a spike in new clientele. “We saw that for one of the big high-street brands we stock, 94% of the people that were buying their products on Thread were new customers,” reveals O’Neill. “They are people who are a little but older and didn’t think it was for them based on its window dressing, even though the product itself was great. Because they had a stylist who they trusted who was saying them you should try these things, they paid attention to it in a way that they never would have if they had walked into the store on gone online.”

O’Neill and Phillips consider themselves being “a good partner” by sharing the anonymised data they capture from their customers with the brands they stock as it helps them understand who their incognito customers are. They have also been invited into the offices of heritage fashion houses, who are eager to know details about how they have bridged the gap between traditional fashion and technology. The founders have kept this service they offer their partners free, and – despite a subscription service seeming like an obvious way to finance the business – plan to keep their model gratis too.

“The original plan was to charge a fee, but I think that the majority of clothing sales will go online eventually. These will all be a personalised experience meaning it will be hard for [existing brands] to offer it really well, because it requires a deep technical understanding,” explains O’Neill. “Most e-commerce companies in fashion use third-party software [which makes it] really hard to integrate them. Because personalisation, AI and technology are at the core of our culture, we are able to do more of these things. If we make our service free, we can get to a point where the majority of people buying clothes are buying them through us or a service like us.”

Then, says O’Neill, Thread can start “to change how the whole industry and market works”.

[“source=theguardian”]