Amazon’s Prime Wardrobe has been a critical way for the e-commerce giant to expand its reach selling clothing and other apparel: giving shoppers an easy way to try on several items, return what they don’t want, and pay for what they keep has helped it cross the virtual chasm by bringing the online experience a little closer to what it’s like to shop for fashion in physical stores. Now, a startup that’s built “Prime Wardrobe as a service” to help smaller competitors offer its shoppers the same experience is announcing some funding to expand its business.
TryNow — which provides technology to online retailers that use Shopify Plus to let their customers receive and try out apparel, return what they don’t want, and pay only for what they keep — has raised $12 million, funding that it will be used to continue expanding its business.
Based out of San Francisco, the startup already works with around 50 up-and-coming online retailers doing between $10 million and $100 million in revenues, with Universal Standard, Roolee, Western Rise, and Solid & Striped among its customers. In an interview, founder and CEO Benjamin Davis said that it has seen the business grow six-fold in the last year as more shopping has shifted online from brick-and-mortar due to the pandemic. TryNow claims that using its service can help brands grow average order value by 63%, conversion rates by 22%, and return on ad spend by 76%.
Fashion has been a primary focus for “try before you buy” services online, but the model is not limited.
“Apparel is a core category for us,” said Davis, but he also said he believes that the model can be applied to improve the unit economics of selling online to other categories, like cookware. “Prime Wardrobe has solidified the power of that fashion model, but we believe it’s much larger. We think that any discretionary purchase should be tried before it is bought.”
The funding, a Series A, is coming from an imposing list of backers that speaks to the opportunity in this space. Investors in the round include Shine Capital, Craft Ventures, SciFi VC (the venture firm co-founded by Max Levchin, founder and CEO of buy-now-pay-later firm Affirm), Third Kind, and Plaid co-founders Zachary Perret and William Hockey.
As-a-service, at your service
TryNow sits as part of a more significant wave of commerce and finance services that have emerged over the years to provide technology to entrepreneurs where the commerce technology they are using is not the core of the business they are building.
The thinking goes: building payments or related features is complex and not something that a company not focused on charges would build itself (much like most businesses would not develop their own accounting software or the computers they use). And as the most significant competitors — e.g., Amazon — continue to grow and build their own technology in-house to keep their competitive edge, a demand for more tech-enabled tools only grows and becomes more sophisticated with the competitive threat. These, in turn, get delivered as a service since smaller competitors will lack the funds and human capital to build these themselves.