Japan's Zozo embarks on hiring spree to shore up online mall

For Japan's Zozo Inc, a brash online fashion retailer, 2018 marked a turning point, but not in the way that anyone had hoped.

Its body-measuring Zozosuit, which was supposed to put the firm at the cutting edge of made-to-order fashion, failed to drive sales. Executives came under fire in the media for wildly optimistic targets and the company said in November it was phasing out the product.

Adding to its woes, fashion brands that helped make the reputation of Zozo's billionaire founder and CEO Yusaku Maezawa became increasingly unhappy with what they saw as excessive discounting at its core Zozotown online mall. Japanese apparel firms like Onward Holdings Co Ltd and Right On Co Ltd left the site.

The turmoil forced Zozo to slash its profit outlook in January. Soon after, publicity-loving Maezawa, known for signing up to be the first private passenger on Elon Musk's SpaceX voyage around the moon, said he was taking a hiatus from Twitter to concentrate on his "real job".

According to Yuki Kanayama, chief innovation officer at unit Zozo Technologies, the Zozosuit was no failure - just the first iteration of the company's made-to-measure business.

To bolster its mall business, Zozo is recruiting engineers to make shopping online more tailored to a user's preferences.

The next stage for made-to-order services "is still under debate internally" while Zozo concentrates on shoring up its online mall, he told Reuters in an interview.

The dropping of the suit, however, underscores the challenges in making mass-customization a fashion industry reality. Numerous retailers, from startups to giants like Amazon , are pushing forward with body measuring technology including in-store scanners and apps that capture data via the smartphone. None have had break-out success.

UNSUITED

Michael Causton, an analyst at JapanConsuming, describes the Zozosuit as a nice idea but "very badly executed."

The first version, launched in late 2017, used embedded sensors to upload data via a smartphone but was afflicted with high costs and production problems. Zozo quickly abandoned that approach in favour of an easier-to-manufacture polka-dot version that used a smartphone camera to capture data.

But a bigger problem soon became apparent: customers who received one of the one million bodysuits distributed for free did not order many clothes and some did not even upload their data in the first place.

"Zozo will not mature," he said, dismissing the idea that 2018 represented a rambunctious teenage period for a firm that needed to grow up. "We are still punk."

Reuters