At the close of October, Founder & CEO of Invertex, David Bleicher had a lengthy chat with our Editor, Lydia Hanson. David spoke very openly about the business, and the transformations it has undergone in the last few years. Invertex’s powerful 3D technology is working towards combatting fit and sizing issues in fashion – predominantly in footwear. During this zealous conversation, David shared exactly how Invertex works for brands and retailers as well as for individuals, the importance of the consumer experience (an overriding factor for the business), and just how far the industry has come in recent years.
Name: David Bleicher
Occupation: CEO, Invertex
Likes: Sports, Outdoors, Family time, Podcasts and Audiobooks
Words to live by: ”Life’s a journey, not a destination”
Lydia Hanson: David, to begin, can you give me a quick overview of Invertex, in your own words?
David Bleicher: Sure, I’ll take footwear – which is our main vertical – as an example, and maybe towards the end of our discussion I’ll explain how this refers to other sectors as well. But I’ll focus mainly on footwear.
The problem we’re trying to solve is the way people shop for shoes, which hasn’t been working very well lately. While online sectors likes consumer electronics have come close to (and sometimes over) 50% of shopping, in shoes it’s much less than 10% typically. This is because there’s a huge problem with fit. Most people I talk to just don’t have the confidence to by shoes online; they say they’ve had bad experiences, they’ve bought things that don’t fit, they forgot to return something. Basically, there’s zero standardization in this industry. Even within a specific brand you can get two shoes with a ‘10’ label on that look and feel very different, and you may end up buying one in a size 9 and a half and the other in a 10 and a half, even though your feet are the same. This problem becomes even larger when you speak about cross-categories – where obviously a size 10 football shoe is not the same as a size 10 running shoe – and between brands – where a size 10 in ALDO is completely different than a size 10 in Timberland, in Nike, in adidas, in New Balance etcetera.
The only real way to do the matching is to take your feet geometry as a basis, which is something very scientific and start the matching process from there. For a fully-grown adult, for the majority of your life your feet aren’t going to change. So, we take this as a reference point and we use those feet geometries and dimensions to recommend to you which shoes to buy, and in what size. For us, there is one ground truth, your size is a pair of shoes that fits you; it doesn’t matter if the label says 7.5 or 8.
I mentioned to you the low numbers of people buying shoes online, which means the majority of people still buy shoes in-store. When we came to develop solutions for this market, it wouldn’t make much sense to bring a solution only to those people who are already online – because then we’d be ignoring the 92% of the industry who still buy shoes in-store. So when we developed the solution we developed one branch that works in stores, and another that works at home for scanning your feet – both of which are connected to the same match-engine, or fit engine, that gives you the correct sizes. So basically you could start your process in a store using one of our products to get scanned and get recommendations or in another example you would go onto an online retailer like ASOS and see a new brand of shoes you like– where you have no clue what your size is – you download the app, get yourself scanned, and get all of the size recommendations. So those are two examples of how it works; there are quite a few different combinations available. All of which create a seamless transition from the physical to the digital world and back.
Lydia Hanson: Great. So you work on an individual buyer level, as well as a brand / retailer level? You mention an app there – that would be the individual consumer level…
David Bleicher: Yes, so I mentioned the app – let me give you a little more on the brand level.
In numbers, 8% of shoes are bought online, and less than 1% of shoppers convert to buying when they’re on an e-commerce site for shoes. It’s less than half the average in other categories. Return rates are outrageous – I just spoke with a big retailer this morning and they gave 25-40% as the average return rate. Take into account that in 73% of cases the return is financed by the business and not by the customer, which costs on average about $20 to ship, return, and re-package the shoes. Zappos, for example, spends around $100 million a year on this problem alone. It puts companies in the place where they are making a very minimal profit, or no profit at all.
All of these companies are addressing this right now. They’re each understanding how much this bleeding wound is costing them, and every one of them is seeking solutions.
Lydia Hanson: Indeed. Return rates are a major pain point for Fashion. If you go onto ASOS – to use your earlier example – and bought a size 10 pair of jeans from Levi’s and another size 10 of ASOS’ own brand, you’d likely be sending at least one of those pairs back (if not both), because they just wouldn’t fit the same.
David Bleicher: Exactly. Our statistic is that for every 3 models of shoes picked up by a customer in a store, at least one of them will be a different size to the others. We’ve never seen a time where that wasn’t the case. And I’m talking about studies within a brand – when we talk multi-brand it becomes even more confusing.
Lydia Hanson: Sure, and that’s what you’re trying to combat.
David Bleicher: Indeed. As I was saying about omni-channel before, we have the at home scanning solution, and the in-store scanning solution – which are very important parts of the system. So once a customer gets scanned, at this moment, we know his/her size in any shoe that exists in our system. The next step is to make this information available to you in an easy-to-use way, which is why we have a plugin on e-commerce websites – similar to TrueFit Fit Analytics and others– that pops up with your information the moment you need it, when you can’t figure out your size(s). The difference is in the accuracy and in what information this popup provides to you and how well it fits the reality.
We also have a very nice feature, which is where you scan shoes in store to get your size recommendations there. This also makes your in-store experience much more enjoyable.
Lydia Hanson: I may be jumping ahead here, but does the recommendation work based on the data knowledge you have of a particular retailer or brand? For example, if I had the app and scanned in a pair of shoes from Nike, would it know what my recommendation would be for Nike because it knows how Nike’s sizing works in relation to standard sizing?
David Bleicher: It’s even more sophisticated than what you’re describing. We have tens of thousands of feet scanned into the system in what we call our feet repository, which means whenever you get scanned – either at home or in a store – you already have hundreds of people who have very similar feet to you. On another hand, we have a very big database of shoes, of all of the brands we’ve ever worked with – all the SKUs, all the models.
What happens is that whenever a person is scanned and continues to buy a pair of shoes and he’s happy with the fit and what he bought, and we’ve automatically created a new bridge between the foot repository and the shoe repository. Multiply that by tens of thousands and you have a very good mapping of how each model of shoes relates to the feet anatomy. It could very well be that they relate very differently from each other – even within a specific model it could act linear on the middle sizes, and then start behaving differently on the very large or very small sizes, which has been the case in many shoes.
So basically we map the way the shoes are built based on the people who bought them, and not based on the physical build of the shoes. What’s good about that is that first of all, it gives much more accurate results. The alternative method is just scanning the internal volume of the shoe and doing a volumetric comparison between the foot and the shoe; this is something we used to do until 2015, and I can say today that we’ve proven many times in experiments how our new approach – which we’ve been developing for almost two years now – is much more accurate and gives much more often the exact recommendation, compared to alternative systems.
Another great upside about this is that it’s much more scalable, because we don’t start gathering information about a new shoe. Let’s take a new brand that joins the platform – they upload a new shoe into their website, and this shoe is automatically uploaded into our system, already gathering feedback on people’s feet. The alternative would be that we’d have to order the shoe in all the sizes, and scan the internal volumes, which would be less scalable and less accurate. So it’s actually a win-win the way we’re doing it today.
Lydia Hanson: The recommendation factor is of course a huge part. As well as Invertex being able to tell an individual what size shoe to wear or what size will fit them in a particular brand, are you also working with retailers and brands to help their sizing in the first place?
David Bleicher: Yes, although that’s kind of a byproduct of what we do. This information is invaluable. There’s so much you can do with that information, and you just gave a great example for design and development teams.
We did an experiment almost two years ago with a women’s footwear brand and they were surprised that their best-seller model was running off all of their sizing charts. What they were designing as a size 7 shoe was more like a size 8 and the whole model was designed on an offset. This is the kind of insight they can learn from just a limited scope test. They can also gain a lot of other insights, like, “what is the perfect size 7? The perfect size 8?” and “how should we change our lasts and shoemaking techniques to make the sizing much more consistent?” And these are all design and development benefits.
There are also benefits on the marketing side: now I know all of my customers’ feet, and if at the end of a season I want to discount all of the size 14s of a basketball shoe, then I know exactly who those shoes will fit and I can market directly to those people.
Another group that can benefit is the operations group – the buyers who have to prepare for the next season. They know which shoes were tried on, which were bought, and which were returned. They get a lot of insight into how to plan the next season.
For some companies this is all that interests them – much more than the customer experience. We built the whole thing to improve the customer’s experience, and as a side effect we got all of these additional advantages.
Lydia Hanson: So, brands purchase your software to use in-house?
David Bleicher: We have an ROI calculator that explains to you how much you’re going to save for every profile created. When someone creates a profile there are two things that happen: first you’re potentially going to gain additional sales by marketing to this person and upselling. We aren’t taking this into consideration; this is just a bonus. But what we are taking into consideration is that one out of three customers is going to return the shoe that they buy, and so for every profile that is created we’re cutting significantly the chances of returning the shoe, which can be directly calculated as a saving in dollars. The connection here between the bottom line and our solution is very clear and very close. In order to simplify it, instead of charging for every time a customer buys shoes with the system, we actually consolidated all of that into a single payment for customers. When a customer creates his profile, we charge only once regardless of how many shoes they go on to purchase, and the brand is not going to pay any additional costs.
Lydia Hanson: And to onboard your technology for a brand, is that relatively easy?
David Bleicher: Yes, we have two ways of integrating: one is through the ERP system and the other is through the e-commerce system. The nice thing is that once we’ve done this integration, there is no maintenance because our system doesn’t need constant updates. The business updates their own things – their e-commerce or ERP – and our system is connected to that to get all of the information directly.
This is on the back-end integration. On the front-end integration, all of our systems are white labeled so there’s no application called the Invertex app other than our own testing and development applications. It can very easily adapt to a brand’s colour schemes, logos, and inventory. And depending on which e-commerce system they’re using we have different integration tools. We’ve done everything to make the integration very easy, but it still requires a few weeks to get it fully integrated. The nice thing is that once it’s integrated there’s no maintenance – which is the thing that scares everyone. We focused a lot on reducing this factor.
Lydia Hanson: Indeed – and it can be a huge cost. You say there are a couple of ways to integrate. In the future would there be a way to integrate into PLM?
David Bleicher: Of course. It really depends on the brand and not on us, and where the brand is holding it’s most up-to-date and full database of items.
We found that, typically, in fashion businesses there is a clear separation between the e-commerce division and the ERP division – and probably the PLM division as well – and we found that it’s easiest to connect to the e-commerce division where there are already software people and modern systems to connect.
Lydia Hanson: We’ve mentioned your clients, and those who use your software. What is that like in terms of a global reach? Are you predominantly European, or North American based, or do you have a truly global client base?
David Bleicher: Our main market is the U.S. – not necessarily because this market is more important than others, but because U.S. companies are very aware of this problem, and very open and seeking to solve the sizing and fit problems. This is why we have focused a lot on working with U.S. companies. In terms of the types of brands, this solution is for any footwear brand; because of the approach we’re taking it can work for boots, sandals, heels, sports shoes and so on. Since it’s an artificial intelligence, machine-learning system the way it works is that, depending on what other people have bought, it’s going to recommend to you the right size. It doesn’t matter if the reason that it’s recommending that is a volumetric reason, or an aesthetic reason, or perceived size reason. For us it doesn’t matter at all, and that’s what makes it work so well in all sectors of the footwear industry.
I can say that adoption rates are much nicer in athletic and performance footwear, because these are companies who have technology orientation. Nike, adidas, New Balance, ASICS – they all have technical divisions, they have engineers working there, they have software groups, and they have innovation. It’s very different when you go and speak to luxury fashion brands, which we also do, as typically if they have innovation groups they are made up of only a couple of people, and they don’t really have any internal tech capabilities. Or many times, they don’t have the desire to innovate; they have a different state of mind.
Lydia Hanson: You mentioned at the beginning of our conversation that we may get onto discussing other industry areas later on. So, do you work exclusively with footwear?
David Bleicher: Ah, that’s a good question, and I did say that. First of all, to simplify what Invertex is about into a single sentence is “to capture the human body in three dimensions and use it as a marketplace to sell products that are going to fit”.
The second thing you can do when you have this very accurate model of the human body is to also customize products for them. You can make a pair of shoes that will be custom for that pair of feet, and they won’t be an 11 or even an 11 and a half, they’re going to be specific to that customer’s arch, size, and preferences. Just like a cobbler used to build shoes 150 years ago.
In our early days, we did both of these things: fit and customization. We actually started with customization until we understood how big the fit problem was/is, and how much the industry is desperately seeking a solution. We still have some legacy from customization, and one example is custom 3D printed eyewear. An eyewear customer wanted to produce eyewear that works for a person specifically, and approached us to see if we could do the exact same thing for this sector as we do with feet. So we developed, almost two years ago, a system that does exactly that. You can also see how that works on our website.
So this answers your two questions. Is fit the only thing we offer? No, we offer fit and customization, but with a bigger emphasis on fit today as we understand this is the most burning issue in the industry right now. Are we dealing with other body segments than footwear? Yes, we have a lot of knowledge in eyewear as well and, until about 18 months ago, we were doing both of these areas. For reasons of focus, we aren’t offering both of these at the moment. I know there is great request for similar systems for what we do in footwear in eyewear – we have been approached several times by large-scale eyewear companies seeking these solutions, and one of our plans for next year is to get back into this sector, and close the gap that’s been opened over the last year and a half from where we are in footwear today.
Lydia Hanson: That brings me nicely to something I wanted to ask, and that’s whether you have any upcoming developments – bar those you’ve already mentioned – that you’re able to share with me? Be it the next year, five years, or ten years.
David Bleicher: I can tell you first of all – in the beginning we had sort of a euphoric vision where every person should have a full avatar, a full digital representation of their body, and use that as a digital marketplace to buy everything – shoes, clothing, eyewear, a helmet, gloves, coats, everything. Once you have this model, this could have been the case. But we learnt a few important facts along the way, and the first is that people are not that open to having all of this information about their bodies on the Internet. Although other companies do this and have taken this challenge in apparel, we feel very comfortable inside our niche, which is saying let’s take a specific part of the body and a specific part of the industry and perfect that. We want to bring that to a very high level of accuracy, a great user experience, and make this the gold standard in this sector before we move onto another sector. And it was quite a bold and, frankly, not easy decision to close these big markets like apparel. But at the end of the day, we’re the number one experts in doing this for footwear and feet and our solutions are unmatched by any competitor. And people seem to be adopting this solution much more easily than they would do on a full body.
If you asked me in ten or fifteen years if everyone would have a full body avatar for shopping, I’m almost completely confident that the answer would be yes. But are they ready today? No.
It’s more correct to start small, excel in one segment, and grow from there later on.
Lydia Hanson: And well done for making that decision, and not trying to master too many different things too soon. It’s not an easy thing to do, to turn down business in that way. Stick to what you can master, and then go from there.
We’ve discussed this huge issue of fit within fashion. Are there any other major issues that you think need to be addressed in our industry – either by yourselves or by other businesses and applications.
David Bleicher: That’s a very good question, and it really makes me think. I think the most obvious answer for me –would be about ease of use. It seems to me that people – including myself – are more and more looking for ease of use as more important factor than some other parameters. So, if I used to choose a company where I make purchases based on product quality and price, today it’s based on product and experience, and price comes in third many times.
For example, I still buy my flight tickets using Expedia, even though I know there are better tools online to do so. And the reason that happens is that, through customer engagement, they already have so much information about my preferences, like sitting in a window seat or next to the aisle, what my credit card is, what my passport is, and the ages of all of my children. This makes it so easy to buy tickets with them. Even though it’s not the cheapest or the most versatile engine, specifically for me it’s the easiest. This is what Amazon did amazingly with Amazon Prime; it’s not always the most competitive place to buy things, it’s just the easiest. I think that one of the things we’re doing is to basically make it easier for people to do their shopping, specifically for shoes.
Lydia Hanson: You’ve hit the nail on the head there. The rise in new technology and new business models is making everything that much easier for customers, and that’s so important. And, in turn, this is creating that idea of customers being ‘used to’ that level of service and convenience. Take your Expedia example, where the fact that all of your preferences are already stored has turned you into a true Expedia customer, despite the fact it might not be the ‘best’ or the cheapest engine. And you mention Amazon as well; their recent Dash buttons are just another way of making life that much easier for customers.
David Bleicher: Very true. Just this morning I came to work in a taxi; I typically use applications like Uber for this but this morning I had to use a regular taxi, and I almost forgot to pay the driver! Because I’m not ‘used to’ having to take my wallet out at the end of a ride. We get used to everything being easy, and the more that happens the more efficient we get. I’m not sure if that’s a positive or a negative trend for humankind.
Lydia Hanson: I’m sure there are numerous compelling arguments for both ends of the spectrum there.
David Bleicher: I saw an article on LinkedIn just this morning that was ‘things that didn’t exist in 2006’, like iPhones Google. And that’s not so long ago. But we’re used to it all so much we take it for granted.
Lydia Hanson: It is absurd to think just how much we’ve advanced in a decade: contactless payments, Apple Pay, and even chip and pin in America wasn’t a well-used thing until fairly recently. Most people these days don’t tend to carry around any cash, because it’s not needed; we pay for everything electronically even in person – just like your taxi anecdote.
David Bleicher: It’s making everything seamless, and easy, and it’s in every industry. It’s all about the customer and customer service, and all of the technologies – even ours – are actually just enablers at the end of the day. The idea with us is to give the consumer something good that they want and, by that, competitive advantages to the customers that use this technology to capture this audience. Today I can buy the same pair of Nike shoes at Nike.com as well as a thousand other places, for the same price, so the differentiators are going to be ease of use, convenience, and where I’m most confident buying – where I know the shoes will arrive on time, they’ll be the right size, and any problem that there may be will be rectified quickly and efficiently. This is the great thing that Zappos have done: they built a brand that is recognized for service and accuracy, which gives you a comfortable feeling. That’s hard to do, and not many businesses have actually successfully done that.
Lydia Hanson: It’s that issue of retaining customer loyalty. That customer needs to have confidence in your brand and what you supply as well as how you supply it. That’s what will make them stick around.
Before I let you go, is there anything else vital about Invertex you’d like to share?
David Bleicher: Just one thing final thing that really furthers all the points we’ve made, actually. If you look on our website, with our older version, you’ll see some hardware kiosks and all sorts of expensive and complicated solutions for scanning feet and giving size recommendations. About six months ago, or even less, we came up with a new product called ScanMat, which gives you all of the features you had in the hardware solutions: doing a scan in 5 seconds in a very easy process. We do that without hardware now!, and this mat is something that costs less than $2. That was, for me as an entrepreneur and founder of the company, a really important lesson. It seems like a very simple upgrade in our product, moving a lot of our hardware into telephones and then into software only. The fact is, once we did that, it wasn’t a big change in technology for us but it was a big change in the perception it created for our customers.
When we did this, everyone we might have lost a deal to previously came back and said, “We have 1,300 stores and none of the hardware solutions you or your competitors were selling us are feasible for us.” The value for money for putting hardware in stores, not to mention the retail floor, is something they’re very careful about. Instead they want more product there, of course. With this small change in technology, we were able to make a huge change in the way we were perceived and the overall success of our company.
For me, the lesson in that is that you need to focus on what is the value you are creating for the customer, and not on what your technology is. The technology we have now is in some ways simpler than some of our previous generations, but the customer experience has been further polished to become something really attractive.. Thinking back to our hardware products I can very much understand why it was not scaling up as we wanted it to, and why now it is.
The ScanMat works close to 100% of the time. The lesson here is that the combination of simplicity, speed and accuracy once product is well polished can go a very long way.
Lydia Hanson: And that’s a great lesson in business and in life.