A Journey into Personalized Luxury Fashion: Editorialist YX CEO Rafael Ortiz (Part 5)

Sramana Mitra: So tell me more about what happened when you launched it?

Rafael Ortiz: The business was an app for digitizing your wardrobe. The thinking was, we would digitize everything in your closet and provide you with styling services. We would create outfits of all the items in your closet and use that as a basis to generate recommendations for what you should then buy. There was a bit of service. We’re styling you as the value-add and then, hopefully, doing great recommendations all in this app.

We started approaching high-net-worth women in Silicon Valley to test this with us. Silicon Valley is probably the only place in the world where it’s cool for a wealthy person to beta-test software. Nobody else thinks that’s cool. We were able to get some of these women to go on this voyage with us. We go into their closets and photograph everything by hand. It was very raw. We learned how to create beautiful images. We created the styling tools.

We thought about how to style both digitally and in person. It was really about finding the fit. We got engagement and had some happy clients. The pricing wasn’t working that well. We were charging a lot because there was such a big labor component to this. The main thing I realized was our clients would go to this app and it wasn’t very dynamic. There was just a closet. Occasionally, we would send recommendations. Other than that, there was nothing they could do.

They said, “We want inspiration, newness.” Long story short, we found a small luxury women’s publication that was struggling called Editorialist. They didn’t have technology, but they had access. We acquired them and transformed the business into one in which we publish luxury goods content, drove e-commerce transactions, and had a more holistic experience in the app. The business is now one in which aspiring luxury shoppers can shop and read our content. The more achieved luxury shopper signs up for a subscription and pays us $500 to $1,500 for high-touch service.

Sramana Mitra: The high-touch service consists of?

Rafael Ortiz: Styling done virtually as if you were working with a stylist who’s coming to your home.

Sramana Mitra: It’s a human stylist; not AI.

Rafael Ortiz: Correct. If you’re operating with true luxury buyers, they’re looking for perfection. They’re willing to pay for high-quality styling. The way we think of this is to use AI to provide decision support to the stylist to make her life more efficient. In the end, she’s going to assess the alternatives and pick the winning one. Fully automating it to a point where it’s so successful, I think we’re quite a ways off.

Sramana Mitra: How many shoppers are you working with?

Rafael Ortiz: Our website has 1.3 million unique visitors. A significant portion of them are purchasing. That’s driving a fair amount of transaction activity. Then we have low hundreds of these private clients who are on our app. Low hundreds sound like a low number, but you have to think about the economic scale per client. The story in luxury goods is that it’s driven by the top 1% to 10% of all luxury goods shoppers. Although we’re interested in that longer-tail of luxury shoppers, it’s really that top 10% of shoppers that we’ve always been focused on and that I feel most luxury e-tailers were disregarding and focusing on long-tail shoppers.

This segment is part 5 in the series : A Journey into Personalized Luxury Fashion: Editorialist YX CEO Rafael Ortiz
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