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Upfront
Upfront with Presize
Setting The Digital North Star Right
Needle's Eye Senior International Correspondent Yvonne Heinen-Foudeh Interviews our dialogue partner who is the co-founder and managing director of Presize GmbH in Munich. With digital size consulting, the German start-up company aims to counter the increasing returns problem of up to 50% in online clothing retailing.
To do this, 28-year-old Presize CEO Leon Szeli and his two co-founders, former fellow students at the Technical University of Munich, Awais Shafique (CPO) and Tomislav Tomov (CTO), use artificial intelligence (A.I.) methods.
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Presize Co-Founder & CEO Leon Szeli
Right now Presize business is dominated by the size-recommendation solution. A segment where there are some more start-up newcomers.
Here, individual consumer data is provided by answering questions about body shape and shopping preferences. The differentiator from the already manageable competition – the body measurement solution – in which Presize says it draws the actual body measurement data from a smartphone video of around five seconds to enable individually customized clothing.
The customer list of fashion companies that use Presize.ai for e-commerce is growing. As a browser-based add-on, the 'Find Size' button in the respective web store accompanies the consumer to the appropriate procedure.
Yvonne Heinen-Foudeh (YH-F): What do you consider are the most important trends influencing the near and longer-term future of fashion – in design, manufacturing, and elsewhere – and what do you work on recently that you think is emblematic of where the industry as a whole is heading?
Leon Szeli (L.Sz): Based on our experience of working with more than150 brands and conducting dozens of consumer interviews every month is that (a) 50% of fashion revenue will be generated online in a few years and (b) consumers will expect the key points of an offline buying experience to also be available in e-commerce. Most fashion e-commerce still has a lot of homework to do in this regard. A good shopping assistant is consulting with you on the right fit and size, what looks good on you, and then recommends other products that fit your style, body, and the products you already have in your shopping basket. Also, you will have the option to try clothing on and to check how it looks. With 50% return rates in our German home market and 30% in other EU countries with size and fit being the #1 return reason, this topic is what we focus on at Presize. Virtual try-ons and personalized style consultation will be the next step.
Leon Szeli (L.Sz): Based on our experience of working with more than150 brands and conducting dozens of consumer interviews every month is that (a) 50% of fashion revenue will be generated online in a few years and (b) consumers will expect the key points of an offline buying experience to also be available in e-commerce. Most fashion e-commerce still has a lot of homework to do in this regard. A good shopping assistant is consulting with you on the right fit and size, what looks good on you, and then recommends other products that fit your style, body, and the products you already have in your shopping basket. Also, you will have the option to try clothing on and to check how it looks. With 50% return rates in our German home market and 30% in other EU countries with size and fit being the #1 return reason, this topic is what we focus on at Presize. Virtual try-ons and personalized style consultation will be the next step.
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The Munich-based start-up is taking a multitrack approach. Users to choose between body shape or video scan.
YH-F: Where can the journey for apparel companies and their customers go in the long term? Do you expect completely new players to increasingly enter the global fashion business? From your insight are the classic apparel companies up to all this?
L.Sz: We are seeing a completely new segment emerging. We call it the “performance-driven Shopify D2C brands”. They are very data-driven, conduct many AB tests, understand performance marketing very well, outsource many parts of their supply chain, and leverage Instagram and TikTok for their marketing. Many of them scaled from zero to €10m fashion e-commerce revenue within two years with a team of fewer than 10 people. This will be massive competition for more traditional fashion players who did not scale their e-commerce business despite having a lot more time, manpower, and resources.
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First scan, then order. Determination of body masses by smart phone.
YH-F: You have neither an apparel nor a fashion background. As an alumnus, respectively graduate of Stanford University, the University of Cambridge as well Technical University Munich your domain is in Human-Computer-Interaction. Similar for your two founder partners at Presize. What, in your eyes, is lagging when it comes to the education and training of apparel experts? What is your recommendation to adjust curricula and content also at the required pace?
L.Sz: The biggest shortcoming I frequently encounter is many fashion experts not being truly consumer- and data-driven. Even with the best design, sourcing, or marketing skills in the world one can never outperform someone who truly knows what their end customers want and who they are. There are still too many brands out there that just set this north star of marketing to a certain persona, e.g. “40-year-old men who enjoy sports” and then never make the real-world check. Are these people your customers? What is their age, weight, height, body shape? Which products in which sizes do they keep vs. return and why? Have you run quantitative AB tests on your website to see if your assumptions about your users are true? Everyone says they are customer- and data-driven, but how many experiments did they run in the last quarter? Often decisions are driven by gut feelings which lead to losing customers. There is a market segment out there that would like to buy your products, but they don’t because (a) they don’t fit in your products or (b) your marketing activities are not tailored towards them. Oftentimes it turns out the people who want to buy are neither 40 years old nor enjoying sports. Even though they have been marketing to that target group for decades.
YH-F: Your mutual business idea and its implementation with a view to the underlying data-based algorithms have already attracted considerable investment. But what is the actual acceptance of the users in the marketplace? Is Presize.ai currently growing in single digits per annum or double digits? Will you not rather need a strong, equal industry partner for the breakthrough – for an also international positioning on the market as an innovative tech fashion company? Also, to expand regarding your product and service offering?
L.Sz: Between 8% and 30% of the users on a website use our solution to receive a size recommendation from Presize. A traditional size chart is typically used by around 1%. We enjoy our positioning as a shop- and brand-independent solution provider and have seen multiple acquisitions in the 3D/sizing space from fashion companies in the last year which often leads to the technology becoming proprietary. Presize is currently growing at triple digits every year. We grew from three to 40 employees in two years. In 2022, we are expanding our product offering to provide size advice to users who do not use Presize by leveraging our existing data on “if a product runs bigger or smaller than expected”. Additionally, we want to solve the problem “does it look good on me” after we solve the “will it fit” problem.
About PresizeIn the fall of 2020, German multi-investor Carsten Maschmeyer invested €650,000 in the startup in exchange for a 15% stake. A welcome local marketing side effect: the pitch for the deal was aired publicly on the TV show "Höhle der Löwen" (equivalent to the US format “Dragon's Den”).
With its proprietary technology and business model, Presize had already convinced US accelerator and investor Plug and Play in 2019. The former promoter of Google and Dropbox also participated with a six-digit amount. With a total of €3 million in capital raised from investors, the Munich-based start-up should be well equipped for upcoming product development and marketing. www.presize.ai
L.Sz: Between 8% and 30% of the users on a website use our solution to receive a size recommendation from Presize. A traditional size chart is typically used by around 1%. We enjoy our positioning as a shop- and brand-independent solution provider and have seen multiple acquisitions in the 3D/sizing space from fashion companies in the last year which often leads to the technology becoming proprietary. Presize is currently growing at triple digits every year. We grew from three to 40 employees in two years. In 2022, we are expanding our product offering to provide size advice to users who do not use Presize by leveraging our existing data on “if a product runs bigger or smaller than expected”. Additionally, we want to solve the problem “does it look good on me” after we solve the “will it fit” problem.
About PresizeIn the fall of 2020, German multi-investor Carsten Maschmeyer invested €650,000 in the startup in exchange for a 15% stake. A welcome local marketing side effect: the pitch for the deal was aired publicly on the TV show "Höhle der Löwen" (equivalent to the US format “Dragon's Den”).
With its proprietary technology and business model, Presize had already convinced US accelerator and investor Plug and Play in 2019. The former promoter of Google and Dropbox also participated with a six-digit amount. With a total of €3 million in capital raised from investors, the Munich-based start-up should be well equipped for upcoming product development and marketing. www.presize.ai
