When Ambika Singh, the CEO and founder of the online clothing rental company Armoire, began exploring AI applications, she had to thread the needle between embracing cutting-edge tech and deploying it mindfully.
The Seattle startup has always been “a very human-powered business,” Singh said, with a strong sustainability mission to curb clothing waste through rentals. Consequently, employees were anxious about turning tasks over to bots and troubled by the environmental impacts of data centers and AI computing — despite its potential to remove tedium and boost the company’s finances.
In Armoire’s first big AI splash, the company recently launched a virtual stylist to support customers in their search for the perfect tops, pants, jackets and dresses.
The AI initiative is just the latest challenge Singh has navigated since founding Armoire nearly a decade ago. The company survived the pandemic, pivoting from professional attire to leisure wear during lockdowns, before returning to its roots as in-office mandates took effect. She has responded to an evolving customer base, louder calls for resort and après ski outfits, and demand for an in-person storefront for trying on clothes.
Now, the business is weathering the current economic uncertainties driven by layoffs, fluctuating tariffs and rising prices. But while these conditions could raise expenses for Armoire, they are expected to bolster its customer base as clothing rentals become a cost-saving strategy to maintain professional and personal wardrobes.
“Renting your closet is another way to maintain the lifestyle that you want under different budgetary constraints,” Singh said.
‘No chatbot energy here’
The new Armoire AI app helps customers quickly find curated recommendations in a sea of apparel. The assistant asserts itself quietly with a prompt woven into the display of blouses and pants, asking what it can help find. Once a user clicks on it, the tech suggests items to search for and also allows for user-generated questions.
The app takes a few seconds to cross-reference the customer’s preferences — based on past rentals and items she’s liked or voted down — with clothes currently in stock and ready to ship. The AI provides chipper dialogue and refines selections based on feedback.
In pitching the tech, the company said the AI “talks to you just like a real stylist would (no chatbot energy here) and helps you discover the best pieces for your style in seconds — no scrolling required.”
Shopping assistants fueled by generative AI are proving an increasingly popular trend for online retailers, including Amazon’s recent introduction of Rufus to dig up product recommendations. The chatty tech is also showing up on sites like Redfin and Zillow to aid in home searches.
Armoire is developing additional AI technologies, such as a tool to help standardize clothing descriptions across different brands. It might sound trivial, but companies can have significantly different definitions for sleeve length, for example, whether short, long, capped or three-quarter.
The startup has worked to distinguish itself from larger competitors by offering consultations with stylists via phone and email, and Singh said this human touch will remain a core feature. And the AI, of course, isn’t perfect. In our own test, the assistant landed on a solid blazer suggestion but went on to pair it with an absurdly frilly blouse that a human stylist would not have picked.
And some components of the business simply can’t be automated. Armoire has a brick-and-mortar space south of Seattle’s downtown for trying on clothes. It regularly hosts in-person events for networking and fashion shows, including a collection of up-cycled athletic wear from former pro-soccer player Lu Barnes and an annual South Asian fashion event.
Trending upward
Armoire’s multi-faceted approach to clothing rentals and connecting to customers has found success, albeit with a some snags along the way.
The startup has raised $12 million from investors, including a $3.5 million round in 2021 that included backing from Microsoft CEO Satya Nadella, GoDaddy CEO Aman Bhutani and others. Armoire reached break-even this quarter, a first for the business.
While the pandemic shrank Armoire’s payroll from more than 60 workers down to 25, it has since rebounded to 100 employees. Last April, the company won Workplace of the Year at the annual GeekWire Awards.
The online clothing rental market is worth an estimated $2.6 billion worldwide, according to October data from Future Market Insights Inc., and it’s expected to grow to $6.4 billion over the decade, with China, India and the U.S. leading the expansion. The sector could benefit as cash-strapped customers look to rentals and secondhand.
“Services that can offer consumers the opportunity to keep their wardrobes fresh on an ongoing basis are really benefiting,” Sky Canaves, an analyst at market research firm eMarketer, said in a recent NPR story about online rentals.
Armoire remains a smaller operation than competitors such as Rent-the-Runway and Nuuly, which is part of a conglomerate including Urban Outfitters, Anthropologie and Free People. Her customer base is thousands, Singh said, but not hundreds of thousands.
The success of the bigger outlets are useful as they demonstrate that the model works, she said. “Rental continues to grow and so we’re benefiting from that.”
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