Global retail eCommerce sales grew by an estimated 27% in 2020, spurred on by the coronavirus (COVID-19) pandemic outbreak, and in 2021, they expanded by a further 16%, reaching $4.94 trillion, according to market and consumer data specialist Statista.
While that’s created opportunities for online retailers and delivery companies, it has also resulted in higher operating costs for clothing retailers due to a sharp rise in returns of garments that don’t fit.
Tel Aviv, Israel-based company My Size Inc (NASDAQ:MYSZ) has developed and released several measurement apps aimed at resolving the issue using patented algorithms and a sizing SDK (software development kit) for eCommerce platforms.
Proactive sat down with CEO Ronen Luzon to ask him about the company’s prospects and its position in the metaverse.
Proactive: You’ve seen a shift in revenue generation over the past year. Does that indicate a shift in strategy?
Ronen Luzon: Back in 2020, our main source of revenue was from one-off projects with tier-one retailers who paid us a one-time fee for integrating our technology. We decided to shift our focus to growing our business with small to midsize businesses (SMBs) and medium-plus retailers who pay us a monthly retainer for the size recommendation that are generated by our engine. We have seen a ramping up of those revenues in 2021 and going into 2022 with more and more retailers joining the My Size service, using our size recommendation service and using it throughout their different domains. Hopefully, this year we will see it gaining even more traction. And with the recent introduction of the FirstLook Smart Mirror for brick-and-mortar stores, we are adding another layer of services.
How much do you attribute the uptake of MySizeID to the coronavirus (COVID-19) pandemic and, as the situation normalizes, would you still expect that growth to continue?
There’s no doubt that COVID-19 has helped My Size because online retail has grown. We can see that the online business of companies like Nike, Adidas and Levi’s has grown dramatically and it's mainly due to COVID-19. I think it will continue to increase as more people get used to buying online. But brick-and-mortar stores are not going to disappear. If you look at the revenues and profitability of publicly-traded retailers, they are improving, and that’s a sign that they are here to stay. That's one of the reasons that we came up with the FirstLook Smart Mirror – to connect those two worlds. So, a consumer who has been buying online can take their profile and use it in a brick-and-mortar store. That's where we see retail going, with a connection between the two growing markets.
Is there scope for My Size to be used in markets outside the apparel and logistic markets?
Definitely. More and more DIY customers are approaching us for our SizeUp application as they also need accurate measurements for online orders. While there has been competition from camera-based and virtual reality (VR) measurement apps, that hasn’t really taken off because of the cumbersome process of using a phone to measure something using a camera and then creating a VR. What My Size is bringing to the DIY market is a simple and straightforward ‘ruler replacement’ that can measure a room or a window, for example, and use it when buying something online in a DIY store, or even in a physical DIY store. We have seen a pick-up in DIY retailers approaching us for our services. This is another market that we hope to penetrate even further this year.
You raised $8.5 million in a direct offering and PIPE investment late last year. How is that being used to grow the business?
Mainly for sales and marketing. We recently hired Javier Brandwain as our chief commercial officer. His background is in the fashion industry, where he has worked for more than 30 years, including in the ‘C-suite’ at Calvin Klein and other retailers. He knows the market inside out, he knows the main problems, and he knows the people. So, it is gaining more people like Javier in the company, who understand the business, trust the company and see the attraction of our solutions for major retailers.
We’re also investing more in marketing and events, in social media with influencers, and in penetrating more markets. We’ve entered France and are entering Germany and the UK because everybody's suffering from the same problem. And again, it's the same garments, but different consumers, different body shapes, different body sizes, and My Size is needed in all those markets.
Apart from the FirstLook Smart Mirror, are you developing any other new technologies?
Technology is like a kind of disease: you always want to develop something new and you always want to be ahead, but you need to know when to stop a bit and concentrate. At the moment, we are concentrating on the current products that we have, which are the MySizeID and the FirstLook Smart Mirror for the fashion retail industry. We're always looking and thinking about these things, but they are on the backburner for now. The main thing is focusing on these two, and the FirstLook Smart Mirror looks very promising. A lot of retailers are looking for this to ease the queues in their fitting room and at their checkouts and to ease the consumer journey in their stores, especially for men, because we don't like to stand in fitting rooms, and we don't like to stand in queues so it's very easy for us to self-checkout. I’ve also met a lot of women who like the Smart Mirror so it looks very promising for brick-and-mortar stores and the fashion industry this year.
Will MySize be a player in the metaverse as technologies continue to converge?
Currently, we are looking at how the metaverse will convert into the physical world and retailers are also speaking about it. When you are building your avatar, when you are building your character in the metaverse and are buying items for it, when and how it will be connected into the physical world is where My Size should be because to convert the fashion garment that you build for your metaverse avatar, you need My Size for the conversion to the physical you. I think that’s how My Size fits in between these two worlds - the metaverse and the real world - and we are waiting for this to happen. So, we are keeping an eye on it and talking to retailers and waiting for the right time.
What's the outlook for 2022 for My Size?
Things are looking good so far for 2022. We haven't made any revenue projects that we can disclose yet, but it looks good in terms of My Size as a technology company and for our solutions. We also recently bought Orgad, an omnichannel eCommerce platform that gives us another arm to generate revenues and to stream between these two worlds. So, hopefully, we can reach our targets in 2022, which will be much higher than in 2021.
Contact the author at stephen.gunnion@proactiveinvestors.com