$36 Billion Trend Forecasting business

Source: Signature9, Jun 2011
(see related Telegraph,  May 2011 article)

EDITD, a London based startup, has raised $1.6 million from the same VC firm that invested in fashion success stories like Net-a-Porter and ASOS to do something substantially different in fashion trend monitoring. {TechCrunch Europe}

Fashion trend forecasting is a big business; the Telegraph estimates that it’s $36 billion big, in fact. For the last few years though, it’s been a market dominated by two major players. A quick search will turn up conversations from people who’ve worked with both debating which has the easier interface or better image archive, but it’s typically the details that differentiate the sites.

WGSN made waves by moving trend forecasting from books to online reports and briefings: an early version of fashion in “the cloud,” if you will. That shift made the two brothers who founded the company millionaires when they sold the company for £140 million in 2005 – roughly $245 million at historical exchange rates. If you’re wondering what makes the company, who many outside of the  fashion and retail industry have never heard of, worth so much, it’s probably the fact that upwards of 30,000 business pay $30,000 per year for access to WGSN’s photos, reports and forecasts. Stylesight has emerged as a lower priced alternative, but essentially offers very similar services.

If you’re a retailer trying to decide if you should take a bet on stripes, EDITD can tell you exactly how fast striped garments sold out, which sizes sold fastest and at what price. It’s based on publicly available information, so there is the limitation of not knowing how many pieces were available in the first place, but even with limitations that’s information above and beyond anything else we’ve seen. Curious to know how people really feel about a particular shade of green that was all over the runways? Get an early idea of positive or negative sentiment as measured through tweets and Facebook likes, and see how that changes over time. Fashion at every level moves much more quickly than it did in the past – there are no longer 2 collections (Spring/Summer and Fall/Winter) but 4 (including pre-fall and resort, where a growing portion of sales happen) when it comes to designer clothing, and fast fashion has become a completely new category.

Then consider that the two industry leaders can offer predictions of what will happen in a year an a half, but nothing around what’s happening right now, in real time, with real data and we’d say EDITD is the company to look to as the next big fashion trend behind the fashion trends.

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