How retail startup Thread is using AI to solve the ‘choice paradox’

Menswear startup Thread believes it can revolutionise the way people shop by applying an algorithm to clothing choices, raising questions over the future of fashion retail in a world where consumers are increasingly overwhelmed with choice.

Would you let a machine choose what you wear? If so then meet Thimble: an algorithm built by a startup on a mission to make dressing well easier and more accessible for men. Think of it like a personal stylist but without having to leave the sofa or endure any awkward chit chat.

The startup behind the algorithm is seven-year-old Thread. Its service works like this: sign up (for free), look through a selection of different style photos and choose which you like, then give details regarding age, fit and price range. Thimble is then able to search through Thread’s wardrobe of 500 partner brands – ranging from high street retailers such as River Island and Marks & Spencer to luxury brands like Burberry – quicker than you can say ‘thimble’.

The more information you give the machine, the more tailored and personalised the experience becomes.

In much the same way ecommerce took away a lot of the pain points of high street shopping (e.g. actually having to go out on the high street), Thread has been designed to take away the pain points of online shopping – the endless choice, and wasted time scrolling and searching.

It feels like we are poised to create something that doesn’t feel like a normal retail experience because we are not a normal retailer.

Alex Allcott, Thread

“A lot of brands know the choice paradox is a real problem and are thinking of ways to overcome that. It’s quite difficult if you’re not underpinned by tech to properly revolutionise how your shop functions,” Alex Allcott, Thread’s head of brand, tells Marketing Week.

“Traditionally stores have their own merchandiser [whose job it is to decide] what customers see first and that what people see first is going to be the thing they want in order. Thimble does that on an extreme personalised scale and takes the humans out. It doesn’t replace this role but it means the merchandisers in our company can look at different things.”

Upon signing up, each user is assigned a personal stylist – a real person that works in Thread’s office in East London – who is responsible for curating individual user homepages each week with clothes and outfits they think they will like. Again, recommendations can be improved by clicking to like or dislike items.

Sewing the marketing seams

2018 was a big year for Thread. It hired its first CMO – who has since built the marketing team up to eight (including Allcott) – secured a £16.7m investment from H&M and launched its first major brand campaign, ‘A clothes shop just for you’, with Lucky Generals, in October.

Like many startups, Thread had been doing a lot of digital and performance marketing but Allcott says the business had got to the point where it really needed to scale up and build more of an emotional connection with its customers.

“It’s quite functional at the moment which makes sense – it’s a functional tool and it should always have function at its heart – but we need to elevate that and add more personality,” she says.

“We are still a small retailer and there is still a huge amount of growth to be had in this market and that’s the role of brand and doing more broadcast advertising. It’s a bit of a salience thing too: how do we make sure Thread is a shop that people consider? While performance marketing can individually target people, brand can make a product more salient.”

Thread’s target audience is broad but tends to skew towards 25- to 55-year-old males. “He’s grown up a little bit, feels like he’s graduated from Asos and doesn’t quite know where to go and doesn’t yet want to go to M&S,” Allcott says. “That market is vast and quite under-served.”

It has one million users at present – all of which have signed up – with sales growth rising by 79% each year for the last three years. Allcott says 25% of its customers shop exclusively at Thread.

But Thread’s model brings with it an unavoidable marketing challenge, as Allcott explains: “Thread is a bit of a closed door as a retailer at the moment because in order to make sure we can personalise this experience and understand each customer as an individual, we ask for details.

“Most of the time you can peer in a shop, or get people on site, and they are able to shop immediately, whereas people can’t see Thread – you have to sign up – which allows us to make the service good for everyone because we can personalise it. But it does present a different challenge when it comes to marketing.”

While performance marketing can individually target people, brand can make a product more salient.

Alex Allcott, Thread

While Allcott says Thread will “probably” open the site up eventually, it will need to be done in a way that doesn’t compromise its core proposition: that it is a shop that “gets you” and knows the needs of its individual customers at any given time.

There have been discussions around doing a subscription model too. “But we want to retain the accessible feel of the brand, we don’t want to feel exclusive,” Allcott adds.

What about opportunities to bring Thread to life beyond the digital realm? Could the tech-led Thread experience be translated into a pop-up shop, for example?

“I don’t think it’s impossible. It feels like we are poised to create something that doesn’t feel like a normal retail experience because we are not a normal retailer. But it’s not in the pipeline yet.”

As high street stores continue to close apace and ecommerce takes a growing slice of the retail pie, a future without humans isn’t that hard to imagine. But Allcott maintains there will always be room for both.

“Stylists are the ones with taste and they are there to keep Thread stylish, which is why they work closely with the data science team, to make sure that Thimble is up to date on different styles and ideas.

“It will always be a relationship.”