By Adriana Lee. Source: WWD.
Fashion resale marketplace Poshmark raised $87.5 million and is using the new funds to sharpen its data-driven edge.
The Series D funding pushed the company’s total money raised toward $160 million. According to Poshmark founder and chief executive officer Manish Chandra, the investment will go toward expanding its product categories and digging deeper into data-connected technologies. Underscoring that direction forward, the company unveiled a new Alexa skill that lets Poshmarkers initiate styling services by vocal command.
“With the introduction of social styling, we’re revolutionizing the way people shop by combining data, social interactions and people-powered commerce to create the fashion mall for the Instagram generation,” said Chandra.
Poshmark’s first voice-tech project, the skill ties into what the company calls its “social styling engine.” Poshmark Stylist Match is the company’s first voice-tech project.
The Poshmark Stylist Match skill lets shoppers with an Amazon Echo smart speaker kick off a social-styling session by saying, “Alexa, ask Poshmark to style me.” The voice assistant then asks about the theme or occasion for which the user wants to dress. The skill launches with nine preset categories, including “Date Night,” “Brunch With Friends,” “Day at the Office” and “Cocktail Party.” The first categories will focus on women’s apparel, with men’s and holiday gifting themes following in days.
“It’s a pretty quick interaction,” said Jenni Kim, Poshmark’s director of product management. “We wanted to make it really lightweight, like you’re just getting up in the morning and you’re like, ‘Oh, I don’t have something for this upcoming event.’”
Behind the scenes, the service uses data to help match the customer with a member of its more than three million “Seller Stylists.” From here, the action moves to the app’s Dressing Room, which houses the stylist’s selections. The user then browses the choices and buys at his or her leisure.
“Since Day One, we’ve focused on building a highly engaged community, enabling our network of Seller Stylists to deliver a shopping experience that’s personal, not just personalized,” Chandra said.
The concept of conversation, as a valuable human element in retail, isn’t new. But the latest communication tools are. Today’s text-messaging chat bots and voice assistants are giving rise to a movement in conversational commerce that has brands and stores reexamining how people experience their businesses.
Using machine personalities to humanize e-commerce may seem antithetical, but as natural-language processing and machine learning mature, they’re offering increasingly viable ways to address a vexing retail challenge: How to offer personalized service on a large scale that still feels personal. The answer for an increasing number of apparel businesses is to offer at-home styling services through an app or talking speaker.
For a socially driven platform like Poshmark, voice interactions are a natural next step. When its customers step away from the screen to survey their closets, and perhaps most acutely feel the need for fashion help, they only need to ask, and the company can be there to assist.
“What’s key is how people will use it, where the limitations are,” Chandra explained. “We’re iterating. Amazon’s doing a ton of experiments with its devices.”
Poshmark, which considers itself a tech-forward operation, appreciates innovation. So do its customers: Users spend 25 minutes per day on the platform, and the community shares seven million items each day.
As many as one in 50 women in the U.S. sells in the marketplace, and with the business expanding into men’s and children’s categories last year, one in five new app subscribers are now men. The company doesn’t disclose the size of its user base, but the ceo described it as “in the tens of millions.”
In general, the resale business appears to be booming. By making designer and luxury labels more affordable, either through secondhand sales or discounted goods from brand partners, operations like Poshmark and competitors Thredup, Vestiaire Collective, The RealReal and others seem to have come up with compelling proposition, and not just for shoppers. So far, investors have been lining up. Each of the aforementioned companies have drawn north of $130 million in total investments.
This summer, The RealReal closed $50 million in funding, its largest amount to date, raising a total of $173 million. Poshmark’s latest $87.5 million may have cemented the category as a major force in the online retail landscape.
“Shopping on Poshmark is kind of like going to the mall with your girlfriends, except you never have to leave your house,” Menlo Ventures’ Pravin Vazirani said during the e-commerce company’s previous funding round in 2016. “Since we’ve invested in the company, they’ve grown 40 times.”
In this funding round, Menlo Ventures jumped in for an investment as well, alongside Mayfield, GGV Capital, Inventus Capital, Uncork Capital, Union Grove Venture Partners and Cross Creek Advisors. But it was Temasek, a Singapore-based investment company, that led the round, which signals Poshmark’s interest in international expansion.
Global aspirations can pose retail challenges with stock, as well as cultural differences in other parts of the world. But Poshmark’s model inherently sidesteps some of those issues. The company holds no inventory, and “one of the beautiful things about Poshmark is that our demand and supply are so co-linked that, as we enter a market and create a local community of Seller Stylists, we sort of enable local fashion to be bought and sold,” Chandra added. “The supply and demand just kind of happens.”