A strategy team at a major apparel retailer was wrestling with two research tasks. First, they wanted to discover emerging trends in consumer purchasing behavior, aside from fashion trends. Second, they were eager to better understand the expansive apparel retail startup landscape. The team knew gaining a grasp of these areas could help the brand remain a market leader.
But these are complex questions, with no simple answers. Where do you start for researching these topics? It only takes a few pages of traditional search results to make one doubt whether that’s the most productive way of soaking up knowledge.
We used Quid to explore global news media for the first task, and a large database of almost two million companies for the second task.
Here’s a Quid network map of thousands of the most relevant news articles to apparel retail:
From the bottom along the right we find fashion trends and tips, along with fashion weeks and events, altogether comprising a quarter of the network. This information will be valuable to their fashion strategy team but this team focused on the rest of the network.
On the bottom left we learn of a strong shift to sustainable clothing occurring as a reaction to the ‘fast fashion’ trend. While Dominique McMullan of the Irish Times writes about the impact ‘fast fashion’ has made, she does point out how H&M has even launched its “Conscious Collection”, which uses organic and recycled fabric.
Many other topics are visible in the map, but the team is pulled towards the region in the upper right reporting on technology, startups, and apps tied to the fashion industry. They understand harnessing these technologies will help drive business.
In this region we learn about innovative methods startups are developing for businesses to reach out to their current and prospective customers. For example, leverage social media and online shopping behavior to better understand customer segmentation. And a site promoting a community approach to shopping where people can post a photo of items they are shopping for and other site visitors help find those items
At this point, we had quickly digested the concepts from hundreds of articles, reassuring some of our initial ideas, as well as inspiring entirely new trends that we were not aware of. With a short list of articles to read in more depth later, we began to work on the second task — mapping the relevant startup landscape.
In a global database of 1.9 million public and private companies, we found over 2500 private companies in the apparel market receiving venture capital from 2012 to the present. Quid’s network map below identified five high level themes that would further break down into 22 focus areas.
General apparel startups clearly dominate the arena. Entrepreneurs all over the world have raised venture capital in hopes of making their fashion dreams become reality. This theme ranges from online boutique outlets, to children and baby clothing, to footwear.
But it was the second largest theme, Sales Enablers, that caught this major retailer’s attention most. This theme is not comprised of apparel designers and online retailers, but of innovative technology startups whose products and services are developed to help apparel retailers grow their customer base and increase those customers’ purchasing activity. It reflected many of the technology trends revealed in the global news media narrative.
Three focus areas within Sales Enablers stood out to them: Artificial Intelligence, Online and Automated Marketing, and Digital Media Platforms.
The largest focus area of the three is Digital Media Platforms, comprised of 172 startups that altogether have raised $1.3 billion dollars in venture and private capital, with median funding raised of $1.6 million. They offer channel management solutions that distribute and market content on video and social platforms.
Second in size is Online & Automated Marketing, comprised of 138 startups that altogether have raised $540 million, with median funding raised of $858 thousand. These startups offer social insight and content optimization services that help apparel retailers connect and target audiences, as well as track social return on investment and performance metrics.
Third in size is Artificial Intelligence, comprised of 96 startups that altogether have raised $124 million, with median funding of $330 thousand. Advanced artificial intelligence technologies are applied to optimizing online search channels, recognizing images for visual searching, and making recommendations for fashion content powered by big data.
In less than an hour, we had gained a comprehensive view of the key themes surrounding consumer purchasing behavior and the apparel retail startup landscape. Additionally, we had compiled a short list of unique articles to read in more depth, and a short list of young private companies that showed potential for a partnership or acquisition.
With that in mind, we went back to our startup network and changed the view to see the top acquirers in the space, and which startups their direct competitors targeted.
There is plenty more to learn from these networks about consumer apparel purchasing behavior and the startups impacting apparel retail. For a more in depth exploration of this analysis, or a different topic that interests you, get in touch at Hi@quid.com.