“We see ourselves as a tech company that’s working in the fashion and lifestyle goods sector,” says Sander van Bladel, the UK country manager for the German online retailer Lesara.
And the tech startup approach is working: the online only retailer is in the middle of a dizzying commercial ascent. In three years, the brand is available in 23 countries (with six core markets) and the last year has seen sales increase by 175% to a “high double-digit million”.
“When you grow this fast, you need talent that can take responsibility for this growth,” says van Bledel. “Berlin has been a good base for us in this regard. There are lots of people who are here, looking to work in a startup environment, wanting to take that responsibility.”
At the centre of Lesara’s success is the company’s emphasis on data analytics. The company’s “trends analysis tool” scrapes data from Google, social media and blog posts. “It identifies, for example, velvet dresses are currently trendy,” says van Bledel.
From there, the information is fed to Lesara’s merchandise manager for female fashion who sends a sourcing request to a team in China. “The team in China will find a supplier who can provide this product within ten days, basically.”
This ten day turnaround means a trend is identified, communicated, manufactured and brought to market in that timeframe. The product portfolio is constantly swelling, too. According to van Bledel, around thirty new products go online every day.
Data wasn’t always the axis around which Lesara turned, though. When the company started, the trends analysis tool wasn’t quite ready yet, so the initial emphasis was just on offering affordable clothing online in the ‘fast fashion’ format.
Lesara ignores what influencers and celebrities are wearing.
“It was all based on the fact that our founder travelled quite frequently in Asia and saw all the factories could operate very efficiently,” van Bledel explains. “That’s where the sourcing started. And in the meantime, we created this tool which really allows us to analyse trends.”
Lesara relied on, like many retailers, expert merchandise buyers to keep its products on trend. But with the tool now fully optimised, data has become the centrepiece of Lesara’s product strategy.
Lesara only reacts to the data and facts extracted through its tool, counter-intuitively ignoring what influencers and celebrities are wearing. The algorithm is the starting point for Lesara’s buying decisions. The human element is rapidly reacting to it. Van Bledel characterises this model as “fast fashion taken to its next step”.
“Fast retail has been around for a while. But as you can see in most industries, the leaders in brick-and-mortar retail aren’t the ones taking the innovation online.” According to van Bledel, the powerhouse’s of fast fashion – Zara, H&M – have left online fairly uncolonised, opening a hole for Lesara to thrive.
For Lesara , tech startup principles have meant a new kind of hyper-reactivity.
The company has now gone through several rounds of investment, receiving money from disruptive VC firms like Mangrove Capital partners. Its success at gaining funding was partly because of founder Roman Kirsch’s entrepreneurial pedigree. But, also, adds van Bledel, “we had a completely different approach – with our production processes – to a huge addressable market”.
It was an outsider’s approach to a firmly established market. “There are also other struggles that come along with fashion. We don’t necessarily come from fashion, so we had to import people from the fashion industry to teach us about the technical aspects of the industry.”
But, Lesara has never immersed itself fully in the fashion industry, choosing instead to invest its resources in tech. The focus is on identifying trends and satisfying them.
According to van Bledel, it’s an approach that’s available to anyone. “Data sources are basically publically available,” he says. “"The trend analysis tool analyses open search data as well as other websites and social media, from example from fashion bloggers, to find out which items are popular with various target groups at a particular moment."
This ‘tech startupification’ of traditional sectors, for lack of a better term, has been noted elsewhere, too. The Guardian recently detailed how tech start-up principles have transformed the mattress industry.
For Lesara, tech startup principles have meant a new kind of hyper-reactivity. The retailer has pretty much eliminated the raw emotion of often associated with fashion, focusing instead on a how the market changes with a sniper-like focus. “We don’t actually know what we’ll sell this summer,” says van Bledel, sounding rather unconcerned. “We make last-minute decisions because new trends might pop up.”
About Francois Badenhorst
Francois is the deputy editor of BusinessZone and UK Business Forums.