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This article was published on May 20, 2012

How has the digital fashion industry affected your business?

How has the digital fashion industry affected your business?
Scott Gerber
Story by

Scott Gerber

Scott Gerber is the founder of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young Scott Gerber is the founder of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year and have created tens of thousands of jobs. Learn more at

Spring is in the air. We can feel summer just around the corner. To celebrate our love of dresses, skirts and high heels we decided to dive into the world of fashion and find out how technology is re-shaping the industry. We’ve spent the last month traveling the globe, visiting New York, London, Amsterdam, Paris, Los Angeles and Beijing in search of the world’s coolest companies for the May issue of our recent TNW iPad Magazine.

In the issue, we asked 7 entrepreneurs in the Young Entrepreneurs Council about the burgeoning digital fashion industry. Check out their answers below!

How has the Internet changed how people view the activity of buying clothes and fashion? Will the brick-and-mortar clothing store ever become obsolete?

“The Internet has helped the awareness of the ‘small guys,’ as opposed to days when the only brands that would thrive were the ones that could afford to open up a brick-and-mortar in the most prominent locations. Now, brands with a personality that resonates with audiences (e.g., Bonobos) can come to life in an interactive way. The Internet also makes it easier to find reviews about products and learn what your friends have purchased. These two factors combine to allow great products to shine through, whether those products come from established or new brands.

Still, brick-and-mortar is here to stay; the attention, care, expertise and relationships delivered by those who do it right can never be replicated digitally. And of course shopping, like eating a meal with friends, is a social activity best enjoyed with others.”

— Aaron Schwartz, Founder and CEO of Modify Watches

“I have been buying and selling clothes online since 2002 — just tonight, I bought a cute dress for $5 from a Craigslist buyer and love it! The Internet has changed how people view shopping online as a timesaver. It is so much easier to order something online when you know the exact measurements than it would be to browse the mall. For fashionistas who love what celebrities wear, the Internet allows them to know who the designers are immediately.

There are more and more designers who only use the Internet to sell their fashion — new designers can start by using eBay, Etsy, Pinterest, and other sites to help bring new products into the market. Will there be less and less brick and mortars? Yes. I own a brick and mortar and can admit that the rising rent and taxes make it difficult to increase profit margins. However, with the combined use of the Internet and brick-and-mortar, I can achieve sales locally and worldwide. Designers will always use their brick-and-mortars stores for fashion shows, networking events, window displays, and space to showcase their products.”

— Nancy T. Nguyen, Ms. Corporate America 2011 and Founder of Sweet T

What’s one hurdle you’ve found as an entrepreneur associated with the fashion industry?

“As a manufacturer, doing business in the fashion industry has a lot of hidden costs that people don’t realize when they first get started. Retail chains, for example, often ask for various allowances and discounts (such as damage or warehousing deductions), which manufacturers are rarely told about in advance of providing pricing. If, as a first-time supplier, you have not included enough margin to cover these costs in your pricing, you can lose money very quickly, and in significant ways. The same thing can happen if you are not fully aware of which tariff codes apply to your products if you are importing them. The duties can be very different depending on the material or the way something is purchased. The cost of goods can vary by as much as 20%, just based on import costs. Failing to calculate this can create price as well as cash flow problems.”

— Vanessa Nornberg, President of Metal Mafia

“One issue that we are dealing with now is that, since we’ve been going strong with T-shirts for so long, we are viewed as a t-shirt company. We actually view ourselves as a community-based design company — there is this huge community of artists participating on Threadless, sending in hundreds of designs a day. We really want to break free from the t-shirt constraint and create meaningful opportunities for the submitted art on other canvases. It’s been really difficult for us to be able to dive into other categories with as much depth and frequency of releases. And I think that’s true for a lot of fashion companies, if you start out making hats or belts or dresses or pants, it can be hard to expand your brand into other products.”

— Jake Nickell, Founder of Threadless

“The greatest hurdle I’ve found as an entrepreneur in the fashion industry is balancing when and how to approach strategic partners — engineering talent, brands partners and potential investors. There are many people who understand either fashion or technology, but few who understand both at an intimate level and getting buy-in as you build your business is critical.

The fashion industry has somewhat of a ‘herd’ mentality, and getting social proof early can be extremely helpful for a young start up. We initially approached our strongest relationships, and garnered support from executives of well-respected brands first, which helped to secure relationships with top retailers even before we started to build out the product. Incorporating feedback from potential users, designers, bloggers, retailers and PR firms throughout product development was important for our company. However, there’s a balance between how early and raw a concept is when you are sharing your vision with people in the fashion industry. The lean startup mentality doesn’t work well for business development, so there’s an art to crafting your story and product development process.”

— Karen Moon, Co-Founder and CEO of StyleMusée

What does the future look like for tomorrow’s fashionistas?

“The future of fashion lies in co-creation and collaborative design. Trends will continue to trickle down from the runways and trickle up from the street. Brands will continue to search for creative ways to attract fickle consumers and stand out. For Millennials, this means giving consumers a glimpse into the fashion production process. Involving users in the creative process is proven to make them value the brand more, engage with the brand more, and shop for it more frequently.

I take inspiration from the innovative campaigns such as Bergdorf Goodman’s Fendi Frenzy Color Challenge, Derek Lam’s crowd-selected eBay collection, and Polyvore’s Rebecca Minkoff Runway Design Challenge, among others. These influencers all point to the fact that co-creation leads to higher brand loyalty and repeat sales. At Stylyt, we let consumers play fashion designer for their favorite brands. This not only gives consumers a real voice, but also provides brands with a visual, interactive and predictive method to find out what consumers want to buy, before anything hits stores.”

— Nina Cherny, Co-Founder of Stylyt

“My work as founder and CEO of Poshly Inc. hinges on a vision of the fashionable future being all about personalized shopping online. We believe it is inevitable and exciting. Poshly is working on understanding and implementing technologies that better target content and commerce to consumers from brands and e-tailers. This is yearned for by fashionable consumers who are already burdened by thousands of product choices and myriad product literature. Personalization is also imperative for brands and e-tailers — and their agencies — in order to access the elevated marketing ROI possible with personalization solutions. Curation-based systems, such as Birchbox or BeachMint, were just the first step.

Fashion is a massive industry, and e-commerce is even bigger. There will be more hardcore technology coming into the space to cater to the whole ecosystem around style shoppers. I believe that products and services online, on mobile, and in-store must cater to the consumer’s unique sense of self.”

— Doreen Bloch, Founder and CEO of Poshly

.shock via shutterstock