Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Schmults says the 31-year-old company plans to eventually sell only custom products, eliminating excess inventory and meeting the exact demands from consumers and other retailers. "It takes a lot of the risk out," he says. "I'm not holding thousands of colors in my warehouse." Nor are retailers holding excess stock of Wild Things inventory in their stores and warehouses, he adds. But that bright future brings about thoughts on limits. If Wild Things overwhelms consumers with too many choices, shoppers might not make any.
While the number of available colors depends on the product and the fabric selection, several jackets offer shoppers 10 color options; Schmults says he worries about overwhelming consumers with too many choices, though he's not ready to say how many is too many. Then there are the costs—the on-demand tool costs about $100,000 annually for Fluid to host and update because each product addition requires significant development work, Neil Patil, chief product officer at Fluid, says. Retailers also come up against the borders of proper sizing: Wild Things is working to add inseams and sleeve lengths to the tool, which could better help tall, skinny, or shorter-than-normal customers to find the best fit. Those groups account for some 10% of the company's customer base, Schmults says.
Suitly.com, an approximately 7-month-old retailer of men's suits, dress shirts, jackets and pants, is betting that the value it brings to consumers will balance out the time required to shop for and receive its products. It is in effect allowing consumers to order clothing made exactly to their specifications, just as they would if they bought bespoke suits or shirts from a high-end tailor.
"Consumers are so empowered to find better deals and prices online, so you have to create value for them," Matthew Krizsan, CEO of Suitly Apparel Inc., says. "But the biggest challenge for us is you have to convince them to jump across the chasm and spend time and effort."
Among the main challenges is having the shopper use his own measuring tape and then enlist the help of a friend to spend the 10 minutes needed to take about 14 body measurements required to build a custom shirt. That data, when combined with the shopper's height and weight, enables Suitly.com's algorithm to produce the fit. A video on the site educates shoppers about how to take the measurements; shoppers can save their information after creating profiles. Shoppers also select among various options for their clothes, such as the types of sleeves, collars and cuffs.
Suitly created its site and customization tool from scratch, Krizsan says, with help from what he calls a "boutique firm." He won't disclose the costs, but says he could have found a cheaper way. "I was a little nervous at the outset so I decided to just take it the easy way and hire a firm, which was not necessarily easier," he says. "I like to be in the loop and control of things, so I would urge anyone who has knowledge to create their own team. It will end up being more cost effective, and you'll have more control."
Once a consumer places an order on Suitly.com—about one to 10 per day, depending on season—the order is sent to a factory in Thailand, with garments made from the raw material found in local markets. A Suitly employee based there supervises production. In all, Krizsan says, he needed a year's worth of testing and international travel "to make myself comfortable with the process and vendors" involved in the production process.
Suitly offers a $75 reimbursement for local tailoring should the apparel not fit. And it will remake the item should alterations not work, or offer a refund. Krizsan says the alteration rate is about 8%, with no remakes yet requested, as of early 2013.
Even so, he says that online apparel customization still has a way to go for the truly perfect fit. "We are limited by the amount of measurements we can take," he says. "I'd like to change that in the future. The things we are looking at, for instance, are 3-D imaging and body-imaging solutions."
Suitly.com isn't the only retailer trying to expand the limits of customized e-retail by making shoppers more confident in their relatively expensive purchases. So is Gemvara.com, a web-only e-retailer of customized jewelry that launched in 2010 and has an average ticket of $1,000, according to the 2012 edition of the Internet Retailer Second 500 Guide.
Consumers on Gemvara.com can design their own jewelry, choosing the type of metal and the gemstones. Merchandising tools built by the e-retailer enable customers to see instant renderings of designs, while a recommendation tool suggests similar designs.
In fact, a big part of the appeal of the Gemvara customization process is the fine detail in the product images and the relative ease of creating a piece of jewelry, Norwest's Goldman says. His company in June led a $25 million Series D funding round in Gemvara.com, the capital won in part because the site seems easy for shoppers to use. The key for e-retail sites selling customized products is the user interface, he says. "You have to make [shoppers] feel comfortable. If the interface is complex, consumers don't feel capable."
Part of that comfort level also comes from the ready availability of customer service. Gemvara.com prominently displays its toll-free number and encourages shoppers to call, live chat or e-mail with customer service agents about their design. The e-retailer introduced 24/7 customer care last year, and extended its returns window from 30 days to 101 days. "There wasn't a ton of science behind the 101 days," CEO Matt Lauzon says. "We just wanted to make it clear we stood behind the product." He declines to share details about the impact of the changes, but says he expects the changes will help create loyalty among his customers, including the 80% of his customer base that had never bought jewelry online before coming to Gemvara.