2020 has been an interesting year so far, states Arthur Bizdikian, co-founder & CEO of Lemonade Fashion, an online marketplace for made-to-order designer apparel.
The year has been “interesting” as much as challenging. While Lemonade Fashion is registered in the US, it is based in Lebanon with an office in Beirut, which was destroyed by the recent explosion. Almost 50% of the designers working with Lemonade Fashion are from Lebanon and have been severely impacted, as their ateliers have been damaged. “We are now in the rebuilding phase, which will take a while,” Bizdikian says.
Aside from the recent explosion and an on-going health pandemic, Lebanon has been suffering due to political instability, further complicated by the revolution that started in October 2019. The country is economically challenged as it entered hyperinflation, with 462% annual inflation rate in July, while food prices soared by 200%. As challenges mount, a lot of entities might even go out of business. “We have already seen a few designers go out of business even before the explosion. A lot of businesses have closed down,” Bizdikian confirms.
There’s always a bright side
The COVID-19 pandemic has reinforced the importance of online shopping. The ‘great lockdown’ has indicated the challenges of a brick-and-mortar-only business model. Brands reliant on shopping malls have suffered greatly, as businesses were mandated to temporarily close. As the lockdown started, fashion designers from around the world were left often with one option of selling through an online channel. Online marketplaces, like Lemonade Fashion, became the lifeblood for these designers. “We’ve seen 3X month-on-month growth in our orders between May and July 2020,” Bizdikian shares.
However, being a made-to-measure concept Lemonade Fashion’s orders were impacted at the initial stage of the lockdown, as manufacturing came to a halt for almost two months. “There was indeed a lot of uncertainty, especially in the beginning as COVID-19 broke out. People didn’t know how long the pandemic would last. They didn’t know if they would have a salary, and cared about fulfilling their basic needs. As things started reopening, and people gained confidence, our orders also gradually started picking up since May,” Bizdikian elaborates.
“Even after the lockdown, people are still wary of ‘contact’. A section of consumers is not comfortable just yet to try on clothes worn by others,” he continues. “That’s why brick-and-mortar retail concepts have not been able to recover fully even after reopening.”
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Leveraging technology to curate fashion
The Lemonade Fashion marketplace is custom-built with its own made-to-measure technology enabled by artificial intelligence (AI) and machine learning (ML) to make the measuring process accurate. A Lemonade Fashion research indicates that almost 50% of fashion items bought online are returned owing to fitting issues. But a made-to-measure online concept has the potential to bring down the rate of return to 7%, while holding no inventory.
Lemonade Fashion is now home to more than 70 designers – from the UAE, Saudi Arabia, Egypt and South Africa to Italy, Armenia, Canada and Kazakhstan, among several others.
“We are increasing the number of designers with a goal to reach 100 by the end of the year and 500 by 2021. And we are leveraging new technologies to unlock their full potential, connecting them with global customers who are looking for custom-made outfits,” Bizdikian explains. “There are around seven million designers around the world. We look for these hidden talents and offer them a platform to sell their creations. When we sign up designers for Lemonade Fashion, we offer them end-to-end support from content creation to marketing, as well as a separate page on our platform that acts as a standalone shopfront for them. Once a designer delivers an order, we charge a 30% commission, which is reduced to 15% if the sale is generated by them.”
“Currently, we are working on a white label solution for designers, which will be specifically branded for them and powered by us,” he adds.
The road ahead amid new market shifts
“If 2020 has been an interesting year, fashion will see some even more dramatic changes in a post-COVID-19 era. As consumption patterns have transformed, the share of online shopping will increase rapidly. This will require solid platforms and technologies, coupled with a better understanding of the new market shifts,” Bizdikian observes. “Currently, on a month-on-month basis, we are seeing a 10-15% growth in retention rates and 20% higher dwell time on our platform. For the past four months, our bounce rate has reduced by around 4%. This is due to a delightful consumer experience, created by leveraging the right technologies and constant newness driven by our designers.”
In order to implement the right technologies that will further strengthen the Lemonade Fashion platform, the brand has received a pre-seed investment from Draper University Ventures in San Francisco.
“This investment has helped us to hire new developers, allocate budget for marketing and generally increase brand awareness for Lemonade Fashion. We are now planning to start the seed round to scale up the company further. We want to give the designers access to cutting-edge technology through our platform. We are also experimenting with different advertising and marketing techniques, implementing the ones that work well,” Bizdikian concludes.