Fit That Converts: How Magic Fit Turns Size Anxiety Into Sales | #576

Zoltan Csaki has never been one to follow the rack. As Co-Founder of Citizen Wolf, he spent nine years building an ethical fashion brand that produced only what customers ordered. But when sustainability met economic reality, he took a bold pivot: turning his brand’s proprietary fitting technology into a new venture, Magic Fit, now helping retailers across the globe reduce returns and boost conversion.

Today, we’re discussing

• How Magic Fit is transforming Citizen Wolf’s custom-fit DNA into a scalable SaaS tool for retailers
• Why “fit confidence” is the most underrated growth driver in ecommerce
• The economics of sustainability: what happens when good intentions meet hard margins
• The data opportunities hiding inside your customers’ fit preferences
• How Magic Fit gives retailers real-time data on size gaps and lost sales
• The future of pre-purchase personalisation: from fit and fabric to colour and climate confidence

Connect with Zoltan
Explore Magic Fit

Chapters

• 5:45 The Mission to Unfu** The Fashion Industry
• 10:35 The Launch of Magic Fit Technology
• 15:42 Understanding The Customer Experience with Magic Fit
• 17:52 The Fit Problem and Customer Preferences
• 29:20 Size Anxiety in Online Shopping
• 33:32 Exploring AR Fitment Technology
• 35:58 The Future of Made-To-Order Fashion
• 41:19 Leveraging Data for Better Inventory Management
• 46:14 Expanding Magic Fit's Capabilities

Transcript

SPEAKER_03: 0:01

Like the fashion industry is just simply put fucked. You know, way too much stuff gets made, way too much stuff gets thrown away. We just ask you to tell us what makes your body unique, and then we can shift that statistical model to be far more accurate than it otherwise would be, just straight out of the box. One in three pieces of clothing made every year goes to landfill unsold, right? It did not need to be made. How does the customer want it to fit and how does that diverge from what the product team wants or thinks it should fit, right?

SPEAKER_01: 0:35

Hey, it's Nathan Bush or Bushy, joining you from the land of the terrible people here in Brisbane, Australia. About 30% of fashion goes straight to landfill, or the bin or burned. And over half of all fashion returns come down to one simple issue: fit. But what if fixing fit didn't just save the planet? What if it significantly increased your conversion rate? Today's guest has built the tech that's aimed to do exactly that. Today we are chatting with Zolton Chaki, who is the co-founder of the fashion brand Citizen Wolf, that he set up to show how it can be done. And now Magic Fit, which is the technology that's come out of Citizen Wolf, and he's making available to other fashion retailers to help them be more sustainable, but also increase sales. We're going to see how those two work together in this chat. Magic Fit works as a sizing tool for consumers based on just three or four inputs that a customer adds on a product page height, weight, age, and brise size. It was originally part of the Citizen Wolf offering, but it has now been spun off into its own technology company. It's still really early stages, but I wanted to have Zolton on to explain exactly how it works and the potential impact that it can have on fashion brands. Today, we dive into what is an incredibly honest, at times a little bit depressing, but overall exciting if we can mix all of them together. Conversation with Zalton, and we cover how Citizen Wolf evolved from a fashion label into the Magic Fit platform. We talk about how data and algorithms can use averages en masse to tell you about customers' bodies and preferences, which can then save you lots of money in what you order. And we talk about why on-demand manufacturing could rewrite how we think about stock, waste, speed, but it's a huge, huge challenge ahead of us. So if you are in the fashion game or you know others who are in the fashion game, and you not only want to do something that's good for the planet, but also good for your conversion rate and your average order value, this is an episode that you will want to tune into. As always, thank you so much to our partners, Shopify and Clavio, for supporting Add to Cart, not only today, but in every episode that we put out. Their support is invaluable to keeping Add to Cart going. Here's our conversation with Zalton Sharky, co-founder of Citizen Wolf and Magic Fit. Oh, and I will warn you before we get into it, there are some swears in this episode. I kind of encourage it. But if you're in an environment that might not be conducive to a few F-words, maybe turn it down or chuck your AirPods in. You've been warned.

SPEAKER_03: 3:20

Salton, welcome to Ad Descartes. Thanks. It's great to be here, Nathan.

SPEAKER_01: 3:24

How are you? I'm good. I'm good. Even better to have you here. I've been watching your journey for, gosh, I would say three or four years now from Citizen Wolf and now into Magic Fit. So I'm stoked to have you here because we're all about celebrating big ideas. And I think you've got one of the biggest ideas out there.

SPEAKER_03: 3:39

Thanks. Yeah, look, I started Citizen Wolf nine years ago with my original business partner, Eric, and yeah, we did. We started from the position that the world didn't need another fashion brand, frankly.

SPEAKER_00: 3:49

So you created a fashion brand.

SPEAKER_03: 3:52

If we were going to do that, you know, what we decided was that we're going to make sure that we did it in a way that, you know, hopefully just sort of like push the envelope forward a little bit. And like many, many years later, that kind of coalesced into what really is our our mission and and frankly our tagline at Citizen Wolf, which is to unfuck the fashion industry. Took us a long time to get to sort of that level of clarity.

SPEAKER_01: 4:15

Stands out.

SPEAKER_03: 4:16

Thank you.

unknown: 4:17

Yeah.

SPEAKER_03: 4:17

And it's pretty on brand for me. I uh am known to to enjoy a bit of swearing, I should say. My kids are. Okay. Great. Because often I feel like I should hold back, you know. So yeah, like the fashion industry is just simply put, fucked. You know, way too much stuff gets made, way too much stuff gets thrown away. Everybody thinks they're going to do a better job than they do in terms of sales. And yeah, the net result is the planet is literally choking, choking on clothes that we don't need. And so, yeah, Citizen Wolf really began from a point of like, well, if the system's broken, let's change the system, you know. But it's really easy to say it, it's really hard to do, and it's even harder to convince other people to do. And so Citizen Wolf ultimately became and still is a blueprint for how we think the fashion industry should, can, and should operate at scale. That's not to say that everybody's doing it. In fact, very, very few people operate in the way that we do, which is to say completely on demand. We only make what we sell. And, you know, I think if everybody started there, we wouldn't have to unfuck the industry because it it would be largely you know solved.

SPEAKER_01: 5:27

Do you think we're closer to unfucking the industry from when you started to where we are today?

SPEAKER_03: 5:32

I want to think so, but you know what? I think if I'm being honest, no, not at all. Worse? You know, we were we were living in the future nine years ago when we started, and I think we're still living in the future. And frankly, mate, it's really fucking lonely. Honestly. It's really lonely. But like we are convinced that it is the correct way to operate, certainly within the fashion industry, because it is so destructive. But at the same time, it's almost impossible to get people to change, you know, the way they do business, to re-engineer their supply chains, because there is a better way it can be done, a more planet-friendly way, I would argue, a way that's closer to the customer in turn and faster in terms of like loops through the product cycle. There's so many benefits to working on demand, but it's just not the way it's been done. And so if you're running a legacy brand, it's almost impossible to get them to change, I think.

SPEAKER_01: 6:22

So you you've reinvented a fashion brand as you would want to see it in the future to unfuck the fashion industry. You've got on-demand stock. What else are you doing differently that you'd like to see other fashion brands be doing?

SPEAKER_03: 6:36

I mean, the core value prop of of Citizen Wolf is custom made, custom made to fit your body, I should say, or made to measure, as they as they say in in the industry. And again, we're convinced that's the correct way for a fashion brand to operate. And it's possible now in a way that it it simply wasn't maybe a generation ago. Like we can have scale and full customization simultaneously now, thanks to basically the digital revolution. And when you put all of that customer data into a factory, but it isn't easy and it does require a mindset shift. You know, we are as the made-to-measure brand, we're unable to have a wholesale business, for example. And that makes it really, really, really challenging to scale the brand quickly. We run our own factory, and I can talk at length about why that's a good and a and also a bad decision. But yeah, ultimately, I want to think that lots of other brands would go down that route. But um, unfortunately, there's a I think there's a reason why most brands run traditional sizes and their customers and and the brands themselves, you know, they're fine with all the compromises that that that entails. And I think, you know, if I'm being honest, after nine years at Citizen Wolf, there's only a small percentage of the population that really truly deeply cares about, you know, the incremental benefits of perfect fit across every dimension. I think we live in a world that doesn't really it rewards speed. And that's true of any industry and certainly in the fashion industry. So yeah, like I think we're fighting, like Citizen Wolf and everything that we stand for, we're fighting against so much of probably of culture, which is not a honestly a great place to start for a business.

SPEAKER_01: 8:19

Has that got harder too as cost of living has got tougher? It feels like five years ago it was probably a little bit easier to have a sustainability messaging when you kind of look at the Maslow hierarchy of needs. And when everyone's got lots of money and everyone's feeling good, it's like, yeah, I can be good for the environment, I can be sustainable, and then things get a bit tough. And you're like, actually, don't worry about sustainability. I'm gonna look after myself for a little bit. Have you found a bit of that?

SPEAKER_03: 8:44

100%. Yeah. I mean, it's been incredibly difficult. You know, we've done everything under the sun for the last four years, I would say, in terms of trying ways to grow the brand. And we can't, or we haven't. And I think a large part of that is I can't entirely put it on the macro context because that's just being unfair, I think, and not honest with myself. But a huge part of it is that, to your point, when the times are good, people can make decisions and do make purchasing decisions that are larger than themselves, and you can take into account the planet or ethics, labor ethics if that's what motivates you. I think when times are tough, you know, it's incredibly difficult to do. And when you got to make rent, you've got to make rent, you know? And so we did find that people who are trading down. And yeah, that it's it's hard to hard to fight against that. Because you know, I think luxury, like super luxury, yeah, was never a problem, right? The the top 1% are getting richer and richer and richer, right? So like true luxury brands haven't struggled so much, I don't think. And then the brands at the at the mass market end, like Kmart and stuff, they're doing great guns because yeah, people are trading down. And but Citizen Wolf sits in this funny place in the middle, you know, like we're not luxury, we're not designer, we're not high street either. And so, yeah, we're just sort of we're getting squeezed on both sides, I think.

SPEAKER_01: 10:02

So we've started off the uh conversation on a good news story.

SPEAKER_03: 10:06

Yeah, gee, I want to listen to this, it's so riveting.

SPEAKER_01: 10:09

No, it is well, it's it's realistic, right? It's exactly what you're up against. You've got you have a big mission and you are unapologetic about it to unfuck the industry. That continues on. But I love the twist that you've made around releasing the technology behind Citizen Wolf in Magic Fit to be available for more retailers. And I assume that's to help scale your impact beyond Citizen Wolf. Tell me about the moment that you decided to spin out that technology and make it available to everyone.

SPEAKER_03: 10:40

Yeah, so it was at the start of this year, so we're in October now, um, January 25. And it's not a fantastic story. Like it's I'll I'll give you the honest story, but it's kind of it's hard for me to say it. We got to the end of last year and you know, we looked at the numbers in the brand, and and I think up until now, what we've done, every time we've done this process and go is go, oh well, we just need to raise more money again. That's fine. Let's go and do that. And so then, you know, we do, and and we've raised a little bit of money over the years, spent it all. And I, you know, I think our business, the Citizen Wolf business, is in a better place than it ever has been. But it's incredibly tough to raise money, certainly within the fashion industry in particular. Like, no, we've we've met a lot of investors over the years, and we've and one thing we've heard time and again is like, I'll invest in pretty much anything, but I won't touch fashion. Just because it's so it's it's such a tough business. You know, you can be hot as shit one day and growing like a weed, and there's that's like a good problem to have, but plenty of brands go out of business when that happens because they hit gold and then they can't keep up and you know, whatever. There's a there's a thousand reasons that can go wrong. And then, you know, the next day you're not so hot. And so, you know, it's a challenging business, I think. And so yeah, we we were like, fuck god, and like I don't really want to do that again. I don't want to raise money again. And so the reality is that Citizen Wolf throws off enough money for one co-founder and we're three, right? And after nine years, that's a very, very bitter pill for me to have to swallow because we put everything, like absolutely everything, in into that brand and that business and and the mission. And I believe in all of it, but the reality is that the numbers speak for themselves. And so there was myself, Eric, and Rahul. Rahul was the tech guy who built all the technology for Citizen Wolf. And so him and I basically decided we had to get off the books. We had to get off the Citizen Wolf balance sheet somehow, some way. And we'd always talked about spinning off the technology into its own separate company. We always knew that, you know, there's scaling software that's really hard to achieve when you're making real garments in the real world. And we always knew that what we built for Citizen Wolf, whilst it was, you know, at the time, it was very hyper-specific for that one use case. We always suspected that there was utility for other people in the industry. Honestly, we were always too scared to make the decision, though, because in in terms of like chasing it, because we were just deep in the weeds of trying to build a direct-to-consumer fashion brand. And, you know, we're a small team, Citizen Wolf. There were three co-founders. There's we've got a half-time video guy, half-time customer service person, and then everybody else is in the factory, basically, right? So we're we're a very small team, and it was never enough time. Like we're always trying to do more than we possibly can. And so then the idea of like trying to launch a software business on the side was just always in the too hard basket. But yeah, it was sort of like at the then this year came around and we needed it was either raise more money, which I decided I didn't want to do, or I didn't think we could do, because the last two times we raised money was through virtual and it was crowd equity, and that was awesome. I've only got good things to say about that. But like we couldn't go back to that well again. Like I can go into into why I think that's true, but like I just didn't think we could do it, and then we've never been able to raise institutional money because it's fashion, and then we're not even rigged like a normal fashion brand, right? Because we carry all this headcount in the factory.

SPEAKER_01: 14:11

That essentially be buying you guys as co-founders.

SPEAKER_03: 14:14

Yeah, exactly. So we were like, you know, we've d we've just got to do it. Now's the moment.

SPEAKER_01: 14:18

So had you had any interest from other fashion brands who were like interested in being more sustainable, fit to measure beforehand that kind of validated that decision?

SPEAKER_03: 14:29

We'd been having conversations with the uniform industry, actually. And that was sort of that was all bubbling away in in the background. And so, because the technology that we built for Citizen Wolfits, you know, the full stack, we built it all ourselves. Magic Fit sits right at the top, and that's the bit that the customer sees. In the middle is a piece of pattern generation software, which basically takes those measurements from Magic Fit and dynamically creates the thing, the pattern ready to cut for that particular garment. And then underneath that is like all of the operational software that runs the factory, you know, what's getting made today and which colours and what's light and blah, blah. So we we built all of it. And I think just out of naivety, slash at the time that it was, you know, shit nine years ago. Like it just wasn't like it is today, where everything kind of already exists and it's very much more plug and play. I think there were certain things around when we started, but we couldn't afford them, I think. And so, and like Magic Fit's a good example of this. Like, we're not the first people to have created a 3D digital twin kind of solution. But at the time, the people we were, yeah, there were there were other people, but we couldn't, we couldn't afford them. So we we were sort of forced into building a lot of this stuff ourselves. So anyway, whatever. So Magic Fit exists, and then there's a pattern generation software in the middle, and that's the bit that the uniform people were really interested in. Gotcha. There's a, you know, if you make in police or military or fire or whatever, uniforms, there's a certain segment of the population that just doesn't fit the standard size breaks, but like you can't be police without the uniform. And so, you know, they have to do made-to-measure, they're forced into it, but everybody hates doing it.

SPEAKER_01: 16:07

And so I had the wildest experience, just to go on a little tangent there. I was over in NRF APAC in Singapore, and there was someone who had a 3D model of your body, uh, the one on it you spin around and it gives you a scary-looking figure of what you really look like. Um ever wants to see. I never want to see it again. It was horrendous, especially after three days in a conference space. Then they were saying that they are actually used by Disney to get specific measurements for their characters. Because if you're Tinkerbell, we've got to make you exactly right for Tinkerbell. And they actually go, All right, cool, come in for an audition, get on this thing, and we can tell you if you can be Buzz Lightyear or you can be Mickey Mouse. Yeah, really. Wow. So like different use case, but I can definitely see where you're heading in terms of uniform.

SPEAKER_03: 16:55

Yeah. You know, we were fairly advanced in talks with the the biggest uniform manufacturers in Australia. And there was even talk of like turning our factory into a short run manufacturing facility for those guys because some of it's made in Australia still. But in the end, it was, you know, a lot of people over the years have said, oh, why don't you just make for other brands? You know, you've got all this infrastructure. And it's true, but being a factory is a shit business, you know, like it's high volume, low margin, and it's part of the reason why all of the problems in overproduction exist because factories chase high minimums because they want to make, you know, they're making so little on the garment that they need thousands of garments to to make any money.

SPEAKER_01: 17:36

Where are you manufactured at the moment? Sorry, just to give us context.

SPEAKER_03: 17:38

In Sydney. So we so but the original question was like, how did we end up like rolling out Magic Fit to other brands? So originally we thought maybe there was something in the made to measure space for uniforms, but there is something there. But at the same time, we we basically we launched two products effectively at the same time around about January. One was that, the 3D patents or the made to measure patents stuff, sorry, for the uniform market. And then the other thing was what we're now calling Magic Fit, which was a size recommendation solution for other for existing fashion brands or apparel brands, I should say. And so we we just did both of them, and there was only two of us, it was me and Rahul. And so he took the patent stuff and I took the fashion, the size stuff, and we were just basically like, well, let's see where we get the traction, and then we'll just focus into that. And so we are still doing stuff in the uniforms market, but basically all of the traction we saw was was with existing brands. And the the original pitch was like, listen, we've run a brand for many years, albeit made to measure. We know enough about the fashion industry to be dangerous at this point. And we know that you're probably having some struggles with returns. And, you know, bracket buying is a behavior that everybody understands and most people do. You know, we've built something that we think can help get your customers in the correct size, sort of before they make the purchase. And in doing so, we think what we've what we're going to give you is a returns reduction solution. And so the first couple of brands are like, okay, yeah, sure. I mean, maybe I've got a returns problem, maybe I don't. But let's give it a go. And then, you know, thankfully what we ended up seeing was that is true. You know, we were able to reduce returns for these brands. But more importantly, what we found is that people who are size confident end up spending more money. And so their conversion rate went up for new customers in particular, and their existing customers were just given the confidence, I suppose, to spend more money. And so conversion went up, AOV went up, and returns went down. And so suddenly we were like, shit, maybe there is something here.

SPEAKER_01: 19:40

I love that. And I want to come back to the results, but why don't we take a bit of a rewind so that our listeners, if they haven't experienced Magic Fit or Citizen Wolf themselves, understand exactly how it works from a customer's perspective. So I'll set it up. I'm I'm on Citizen Wolf and we'll use Citizen Wolf as an example. But as you said, it could be any brand now, any apparel brand. I go on there and I'm in the market for a new t-shirt. I get on there and instead of just adding directly to cart, it's gonna ask me a bunch of questions, right? To help me understand the ideal fit. Can you take it from here? Tell us what that process is for the customer.

SPEAKER_03: 20:18

Yes, thank you for asking. I'm so glad you did because I always sort of forget and just like gloss over it. But yeah, so Magic Fit asks you only three or four questions. It's simple biometrics that you already know, and that is height, weight, age, and for women, we ask for bra. And with those three or four pieces of data, we build a mathematical model of your body that's approximately 96% accurate. And it's all of the dimensions, it's everything from your neck circumference to your biceps to your hips and your max, your max hip, your bum effectively, and all the way down your body. And so we we end up creating this this mathematical model. Now, it's a statistical model, which means it's accurate at the population level every time. It's not always accurate at the individual level, right? And so what we do at Citizen Wolf is ask you to tell us about your body. And so you say, Well, I've got wide shoulders because I swim a lot, or I'd say I've got a donkey body.

SPEAKER_00: 21:14

I've got a long torso, short legs, big. Exactly. Yeah.

SPEAKER_03: 21:18

Exactly. We get that all the time. Long torso, short torso. All of the things that you know you grew up having your mum tell you because that's a whole other episode. I'm totally right. And you don't for you know, you don't forget these things. And so if you have long arms or short arms or whatever, you know it. If you've got long legs, you know it. And so we just ask you to tell us what makes your body unique, and then we can shift that statistical model to be far more accurate than it otherwise would be, just straight out of the box.

SPEAKER_01: 21:47

And that's just plain text, isn't it? Because you've got the inputs, the numerical inputs for height, weight, age, but then it's just a freestyle text box.

SPEAKER_03: 21:57

Yeah. And we get we get super crazy responses in there.

SPEAKER_01: 22:00

I could imagine you'd get some wild answers there.

SPEAKER_03: 22:02

But you know, it's all it's all good. You know, women who have had, you know, mastectomies or just people that have been in accidents and you know, they've lost an arm or whatever it might be. And we obviously get all of the results. And we've done this at for about a hundred thousand bodies now, and it's all Australian data. And so we've seen, you know, the tiniest of tiny little ladies all the way up to very, very large men, generally, you know, t-shirts that are twice as wide as me, easily, and everybody in between. So we we literally have over the last nine years seen pretty much everybody shape that exists in Australia. And I think that's one of the core things that sets us apart with Magic Fit as a technology solution for other brands, because there's two sides to the fit problem, right? There's your body and the measurements and the accuracy of those measurements. And don't get me wrong, the more accurate, the better, for sure. But there's a balance between accuracy and simplicity. We could ask you many, many more questions and increase the accuracy of that mathematical output one, two, three percent, maybe. But it would be at the expense of the simplicity of the UX, which means, you know, the more questions you ask people, the higher the drop-off. And so over nine years of refining and tweaking and split testing at Citizen Wolf, we landed on the experience as it currently is.

SPEAKER_01: 23:23

Because I can imagine there's also that balance of if you don't ask enough, will customers actually believe that it's tailored to them.

SPEAKER_03: 23:29

Yeah. And look, this is the first thing that everybody has always said since day one. Like, I'm a special snowflake. You cannot reduce me to three or four mathematical variables. It's just not possible. I'm not an average. Yeah, exactly. Right. The unfortunate reality is mathematically, you can. You we can reduce every single person to three or four pieces of biometric data. And then with that, really with that important caveat whereby we tweak the model based on you telling us what makes your body unique. So, yeah, the fit problem is there's the the body measurement side of it, but then there's also how do you want to wear that garment, right? And I think this is where a lot of the other fit solutions fall over because they're coming at it primarily from the comp site sort of data side of things. And, you know, they're all about increasing the accuracy of that model. And all of the other, you know, competitor products in this recommendation space, they'll ask you six, seven, eight questions until you get to the result, including, you know, like here's three shoulders, choose the shoulder that looks most like yours. Here's three guts, you know, how big is your gut? Choose the one that looks like here's three bumps. Yeah, here's three bumps, you know. And so I don't know about you, but like every time I go through one of these, I'm do I just choose the middle. I'm like, well, I I think I don't think I'm skinny, I don't think I'm fat, you know, just like I'm in the middle. And so if I just choose the middle, I'm not quite sure what you've gleaned out of this. I don't know how more accurate that's gonna make the data.

SPEAKER_00: 24:53

Don't tell me I'm average, but I'll take the average answer in the middle.

SPEAKER_03: 24:56

Yeah, exactly. Right. Because people don't want to be confronted often with the truth. And like to your point before, you know, you see that 3D model of yourself and it's accurate, and you're like, ooh, I'm not quite sure that's Ah, Jesus. That's like I didn't it's like I didn't want to know that. I don't I didn't want to stand in the mirror naked, you know?

SPEAKER_01: 25:13

I'm not shopping for clothes today.

SPEAKER_03: 25:14

Yeah, that's exactly right. I'll wait till next week. And so I think that's another one of the core problems with a lot of the other fits sort of solutions where, you know, it is vision-based, and not us, but others, you know, they'll say, put your phone against the wall and stand there with your arms out and twist around and make sure you're in tight-fitting clothes, or better yet, take off all your clothes and leave your knickers on. I mean, I think, again, that's all in service of getting the most accurate model you possibly can. And there is a, there's good reason for that, but it puts up so many barriers, I think, in front of the customer that it's it's ultimately like, you know, it's cutting off your nose to spite your face, kind of thing. And so we consciously decided not to do any of that stuff and relied just on on the mathematics. But the flip side of that is because we've made so many clothes, made to measure clothes for so many different body types and shapes and sizes, we really understand intimately how the two sides of the coin. So one is the mathematics, the other side is preference. How do people want it to fit? And really importantly, when we're talking about putting magic fit into other brands, how does the customer want it to fit and how does that diverge from what the product team wants or thinks it should fit, right? Because not everybody wants to wear it like the designer intended it. One of the a great example is one of our clients is Koto. They're a Kiwi brand, mostly women's wear. Really great brand, really successful. She's been, you know, the the co-founder was right back at the start of sustainability, doing amazing things for the industry and for the planet. They've got roughly four silhouettes across their range of women's wear, from really form-fitting, tight ribbed singlets and stuff, all the way through to super oversized jackets. And so the problem that their customers face is that they often don't know what size to get. Because if they get, you know, if they're a medium in the form-fitting stuff and they buy a medium in the super oversized jacket, it's so big they might just feel silly. And so maybe they're in the jacket, they're an extra small. And the problem, therefore, is that their customers are wearing multiple different sizes across the range. And so every time something new comes out, they just don't know which one to buy. Like, should I buy the medium or should I buy the small, or maybe it's the extra small? And so that's like it, that's a really tough place for a brand to be in, right? And yeah.

SPEAKER_01: 27:31

So it almost becomes a service product rather than just a product product.

SPEAKER_03: 27:35

Yeah. Well, what we've been able to do is effectively open up a channel of comms between the product team and the customer that probably wasn't there before. Or it might have been there like in the thousands of words on the PDP that no one reads. You know? But we've been able to do it in a really direct way, which says, like, if you want it to fit like it does in the photos, this is the size for you. But if you don't, if you want it smaller, choose this size. But you know, if you go down a size, obviously, you know, in the jacket example, the sleeves are going to get shorter. So just be aware that that might might happen. So that's, you know, because we've we've lived in both of these worlds in the made-to-measure space, in terms of talking to people and understanding how they want it to fit and then understanding their body measurements. I think that's one of the things that sets us apart.

SPEAKER_02: 28:22

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SPEAKER_01: 29:20

I can imagine too that it also becomes a little bit of a competitive edge. So as brands are worried about maybe traffic going towards marketplaces or potentially even to ChatGPT to transact in the not too distant future, having that ability to still deliver that experience on site, knowing that they know their product inside out and they've got a tool to help their customers find the right fit the first time. Because a lot of the time it's not so much about the money, it's about the pain in the ass of having to return items when you think you've ticked something off your list, right?

SPEAKER_03: 29:51

Right.

SPEAKER_01: 29:52

So there could be something there emerging for you as well around well, we're actually going to make the website useful for you and give you a point of difference that you can't get. On other channels.

SPEAKER_03: 30:01

Yeah, absolutely. I think, you know, the ChatGPT example is it's really salient. Obviously, everyone's talking about it at the moment. I do see a world in which, you know, you could have your Magic Fit passport and irrespective of and like ChatGPT knows this, and irrespective of which brand you shop, if they're integrated with Magic Fit, then then we can facilitate size within within that experience. And I think moving forward, that's going to be really important. But, you know, one of the key advantages I think that we're ultimately selling to brands is fit as a strategic differentiator, which is, I think, you know, what we're dancing around here. And because the the thing that we we're doing is Magic Fit exists on other brands' websites. It's it's in the pre-purchase experience, right? And so if you're anxious about size, traditionally you've had to interface with a size guide. Now you're looking at me like someone who has looked at a size guide and gone, I don't fucking understand. Like what? It's just tables and numbers and like is it garment measurements or are these body measurements? I wouldn't even know where a tape measure is. This is the thing. How many people actually have a tape measure to hand? Like I have one here because of Citizen Wolf, but like most.

SPEAKER_01: 31:08

I'd hope you'd have a few around.

SPEAKER_03: 31:09

Yeah. But even if you do, Nathan, nobody knows how to use it. Yeah. Right. And that was exactly the starting point for us at Citizen Wolf nine years ago, trying to create the Magic Fit algorithm was that, you know, rubbish in, rubbish out, if if we're doing made to measure and somebody tells me their chest is a hundred centimeters, and then I make them a garment that fits a 100 centimeter chest, but actually they got it wrong and their chest is 103 centimeters, then who's going to be responsible for the garment that doesn't fit? They're not going to own it. They're not going to say, oh yeah, you're right. Sorry, that's on me. I measured myself poorly. No, they're going to be like, you suck, your service sucks, your product sucks.

SPEAKER_01: 31:44

Yeah.

SPEAKER_03: 31:44

I want a refund. And so our starting point was we had to design out the measuring tape in order to make that experience made to measure as frictionless as possible. Actually, although it turns out that that logic holds for standard sizes. And because to your point, even if you've got the tape, and most people don't, but even if you do, most people can't use it properly or accurately. And so plus, it just like it completely interrupts the process. You know, you're on there, you're on the brand website, you're on the PDP, it's the beating heart of the e-comm site. It's beautifully laid out and done, and you know, so many, so much blood, sweat, and tears has gone into making that page just so. And like that's true of every e-comm site, but like the fashion industry is more service level than most. And so, you know, I think it's safe to say that it's probably a little bit more well argued or whatever. And then, you know, you you're like, oh, I don't know what size I am. Oh, wait, I'm just gonna like get up and like root through the bottom drawer to try to find this thing. And then like something happens, your phone rings, or blah, blah, blah. The Amazon guy shows up, and then lo and behold, you abandon the cut.

SPEAKER_00: 32:47

Yeah.

SPEAKER_03: 32:48

And so, you know, that's just that's just reality. And maybe you go back at some point and you might finish that transaction, but you know enough about e-com to know that if you can get them just like end to end, like doing it. Yeah, exactly. So you want to capitalize on the attention you've got. And so I think breaking that experience in any way is just a is a bad start. So yeah, Magic Fit just makes it extremely seamless.

SPEAKER_01: 33:15

What's your take on AR fitment? Obviously, Google have invested a lot and they keep releasing new things that you can measure using their AR tools. I think last week they did shoes that you can measure AR, just measure shoe size just by pointing at your feet. Do you realistically see that as a path forward?

SPEAKER_03: 33:32

I think it's interesting. I think feet is a little bit different to the rest of your body, you know. You might not lub your feet, but you don't see them that much. And if you're just trying to get something right, you snap a photo and and you're done. And like if that gets on the internet, so be it. I think it's different when you're like, when all of the other like fit solution tools in this vision space force you basically to get into your knickers and stand, you know, and do a twirl with your arms out.

SPEAKER_01: 34:00

We're all comfortable with that information going up into the internet to the big four.

SPEAKER_03: 34:03

Yeah. Right. Like, I want everybody to know exactly what I look like, like semi-naked, no thanks. I mean, I'm sure there's a small segment of the population that won't mind, but I reckon most people do. And so I think, you know, this is it's funny because Amazon, like years ago, they bought a solution called, I think it was called Body Map. They paid 80 million US for it at the time. And that that company started as an AR solution for gaming, right? So they were doing real-time AR skins on you so you could pretend to be like samurai's or Voltron or whatever it was, right? And then they were like, oh shit, there's something here. Like if we can do bodies really well, then maybe there's a fashion application. Whatever. Amazon bought them, invested a huge sum of money, and then tried to basically do it on the Amazon platform. Turns out no one trusts Amazon with their data, right? And so, like, I don't want bloody Jeff Bezos to know what I look like naked. And it turns out that most other people don't either. So this is a long way of saying, I think it's really interesting, but I think there's a lot of privacy that concerns and rightly held, I think, that that hold a lot of people back from going all into this kind of AR stuff. I think it's different with the AI, you know, the new AI tools where it's sort of like you here's my face, and yeah, and like tell me what I'm what this jacket's gonna look like and does it match my colouring and stuff. I think all of that has heaps of utility, but I I think the really nitty-gritty around fit and like how big is my gut, I think I think those kind of privacy concerns outweigh the the benefit.

SPEAKER_00: 35:34

Yeah.

SPEAKER_01: 35:35

So the the the AR tools are good for from a look perspective or a style perspective, but not so much from a fit perspective.

SPEAKER_03: 35:42

I think so.

SPEAKER_01: 35:43

Yeah, yeah, that makes sense. Going back to the main mission that we were talking about earlier, around citizen wolf, around unfucking the fashion industry, a big part of that was made on demand. Obviously, you're offering magic fit now to retailers who don't have the made on demand model but are ensuring a better fit for their customers. Do you ever see those two worlds coming together, or do you think made on demand is just too big a stretch for most right now?

SPEAKER_03: 36:11

If I could wave a magic wand, I would force everybody in the industry, in the fashion industry, to change the way they work to be made to made to order. I think it would solve so many problems. In fact, I know it would solve almost all of the environmental concerns with the industry. Not all of them, but a lot of them, most of them. The unfortunate reality is that it's it's just not going to happen. I think over time, maybe many more brands will move to made to order. And I think there's twin pressures, you know, there'll be pressure up from the consumers because the more informed the consumer is, the more they understand that it is the environmentally respectful and protective way to make things. And then there will be the twin pressure of like increasing government regulation. And we're seeing it in the EU now, and it's only a matter of time before it comes here. So those two pressures I think will force more and more people into it. But it won't until basically there's a tax on overproduction, nothing's going to change. Until you someone, the government effectively can figure out how to make it financially irresponsible to have a 30% wastage weight, nothing's going to change. And like, just to be clear, if if everyone doesn't know, one in three pieces of clothing made every year goes to landfill unsold, right? It did not need to be made. There was no part of it that needed to be there. And so until someone can figure out how to make the brands ultimately responsible and financially responsible for those actions, nothing, I don't think anything, unfortunately, is going to change. What Magic Fit does at the moment is gives brands an incredibly great ESG story. If we can reduce your returns 20%, that's great news for your bottom line. But it's also an excellent ESG story. And the bigger the brand, the more probably important this is, you know, and your investors are going to love you, your customers are going to love you, you probably even sell more stuff, right? That's today. I think moving forward, the opportunity for Magic Fit to like start to move the industry a little bit towards better inventory management is the ability to give data that's that's currently invisible, I suppose. So right now on Magic Fit, if you type in your details and that size of that color in that style is out of stock, we log it. And then at the end of every month, we can give retailers a report which says, okay, well, this month, in this style, there were like 1700 customers that that couldn't get it. So next time, if it's a core style, next time you make it, you should probably make more in that size. Those kinds of data inventory things have existed historically. Like style arcade, for example, will look at your data and go, well, this is what you made, this is what you sold, therefore you can tweak it moving forward like this. Yeah. But we we can give them real-time pre-purchase data that that has historically been unattainable. And so that's on the out-of-stock stuff. But more importantly, I think there's a real opportunity around people that want to buy that product but can't because simply they don't fit into the existing size range. And I think brands are always extremely hesitant to extend their size range, but we can give them confidence to do that in the same way. If you put your magic fit details in and you're just too big, because like the size breaks don't go up enough, and we can say to that brand, okay, well, you know, this last month there was 10,000 people who were trying to buy this thing and they were just too they they like they were too big for it. So if you make an extra size or two, not only can you make those customers happy, but you can make more money, right? It's a it's a win-win. Another example is like petite or tall variations. You know, I think brands are normally really hesitant to do that because they're like, shit, if I create a petite range, I'm going to cannibalize my core range. Whereas again, we can give them really clear data, which says of the people that were looking to buy this thing, X percent had a body shape which we would consider to be petite or tall or the inverse. And so just giving people the data to make better purchasing decisions moving forwards that ultimately result in fewer returns and higher sell-through. It's not the same as getting the industry to move to mate to order, but I think it's as good as we can achieve it at this point in time.

SPEAKER_02: 40:18

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SPEAKER_01: 41:19

I hear you, and I and I the power is in the data in in this play. I think obviously it's fantastic what Citizen Wolf is doing and is set out to do. Obviously, there's a whole second problem there around for that to be successful, you would more than likely need local manufacturing, which is a whole other issue in itself, especially in Australia, right? Definitely. So you're trying to solve that yourself. Big, big battle. But I love what you're doing here with Magic Fit. I will take the moment, actually. Just when you gave that stat, around 30% of inventory goes to waste. I'm currently on a chair of the Threaded Together advisory and the tech advisory board. And you know, we're reaching out to brands at the moment because they've got their gaps in their inventory coming into summer. Activeware basics that they need help from other brands around too. So if you are in that situation around you do have excess inventory, don't take the easy option and get it bent or burnt. Reach out to places like Thread Together and there are other organizations out there as well. Because there's definitely no shame attached to it if you are doing the right thing with it. Ideally, it's not a situation anyone wants. No retailer wants excess inventory. But if it does happen, there are outlets there as well. If we have retailers listening to this and it sounds like you are very open to brands coming on and trialing it and giving it a go for their customers, what's the tech stack or the integration process like to put onto a site? Say we're we're dealing with a standard Shopify site. How long are we talking? How hard is it to add onto product pages?

SPEAKER_03: 42:49

It's incredibly easy. We have a custom Shopify app that you install, and then that basically links to an SDK. So it all just goes like boom and it's ready. That's the easy bit. Yeah. The less easy bit is getting all of the graded garment that we need in order to make Magic Fit work. And to answer your question, how long does it take? I mean, it depends on how many styles we're integrating to begin with. And it depends how responsive the product team is. Because what we've found with, you know, certain or some brands at least is that the e-commerce team can seal immediately right the benefit. Better conversion, better AOV, fewer returns. And that's all of the metrics that they care about.

SPEAKER_00: 43:29

Tick, tick, tick, away we go.

SPEAKER_03: 43:30

Let's go. And then the product team's like, oh yeah, but you know, like I don't want to share the tech packs and all of our IPs in the tech packs and blah, blah, blah, blah, blah. And I get that. And I think this is where it was interesting. When we started back in January, I did a very unscientific piece of research, which was I just went through my email and clicked through every brand that I'd ever signed up to to their website all around the world, not heavily Australian skewed, but like all around the world. How many people had a size recommendation solution? And again, unscientific, but it was less than one in five. And I couldn't believe it. I was like, why? Like it just makes so much sense. If it's true that returns go down and conversion goes up and AOV goes up, why isn't this the first thing that people install after they install Shopify, right? Like I just don't understand why it wasn't, why adoption hadn't got there at the mass. And I think it's because the product team generally is really reticent to let that data go. And I understand. And also all of the just standard apps you can install on Shopify force the onboarding process onto the brand. And I think that's a mistake too, because brands are just like obviously there's never enough time, there's never enough people to do all of the things you want. And so even if the e-com team is saying this is a great thing and we need to do this, the product team's like, yeah, I don't care about your metrics because I've got different things that I'm beholden to, and blah, blah, blah. And so, you know, the left hand doesn't necessarily talk to the right hand. So that was one of the key insights we had at the start, is like, well, let's just make it incredibly easy for and like basically we'll do all the work. All you got to do is give me a tech packs and I'll do everything after that. It's an incredibly like a white glove onboarding experience. And I look over time, we will move to a self-onboarding experience too, and like lower price points and all the rest of it. But I think right now it's about making it easy for brands to say yes. So, yeah, we need graded garment measurements. That's basically the the same tech packs that they send to the factories. And some brands are more hesitant to share than others. But that's all we need. And so depending on how quickly we can get that data, it really drives how quickly we can get live. But we can be live in a week.

SPEAKER_01: 45:42

And once you've got that, that's unique data and unique experience just for you.

SPEAKER_03: 45:46

Yeah, that's right. That's right. And look, some brands have like Koto, for example, has a monthly drop cycle. And so every month we need to update more and more products, and and and that's fine. Zorali, you know, they don't do a whole lot of new products, they just do new colours, and so there's not a lot of extra work for us to do, and we don't really mind. We're happy either way, you know.

SPEAKER_01: 46:07

Awesome. So in the next 12 months, what's the focus areas for you, Zolt? And where do you go with Magic Fit from here?

SPEAKER_03: 46:14

Yeah, it's just about building out the product, you know. At the moment, Magic Fit basically eliminates size anxiety for the customer pre-purchase. I think the opportunity for us and sort of like the vision, I guess, for the product is to eliminate any anxiety pre-purchase within the fashion verticals. So, you know, size is obviously the biggest one, but there's there's anxiety around color, there's anxiety around style. Like, does this style fit my body shape or suit my body shape, I should say? And then there's, you know, even there's ultimately use case-based stuff like, you know, I'm going to run a marastani in Boston. I've never been there. It's in February next year. I don't know what the weather's doing. I don't know what I, you know, tell me what I need to wear kind of thing. Like, so I think we have license to extend out from size, keeping that as the foundational kernel, really, but extend out to allay any anxiety that the customer may feel pre-purchase. And there's obviously a thousand things in that, in that sort of journey for us. And then the other side of it is really the data side, which is, you know, everything I was discussing before about inventory and giving very, you know, good signals to the retailers to that they can, you know, either invest more in or less in or whatever it might be in in product moving forward. Yeah, they're the they're the two big things I see.

SPEAKER_01: 47:32

Well done. You didn't even mention AI.

SPEAKER_03: 47:35

Damn, should I? Let's rewind.

SPEAKER_01: 47:37

No, it's all I love it. I love it. And I think I'm hope that I'm sitting here with you in nine years' time with you saying, we're getting closer to unfucking the fashion industry. You know what I mean? Like you're incredibly open, incredibly honest, you've got a big mission, and it's not easy the task that you've taken on. So I've got so much respect for what you and the team are doing here in challenging conventional wisdom around how we manufacture and we consume fashion in Australia and worldwide. So, congratulations to you for that. I'm really excited to see Magic Fit and where you go with this. As you said, great for the environment, but also great uplift across some of the key metrics that we look for in e-commerce. So if we've got retailers that are keen to explore this with you, what's the best way for them to get in touch?

SPEAKER_03: 48:25

Magicfit.ai is the website, and you can get me Zoltan at magicfit.ai or Zoltan at Citizen Wolf still works. That's the one I check the most. So yeah, I either way, I'm around.

SPEAKER_01: 48:39

Well, thank you so much for joining us today on Add DeCar Zultum.

SPEAKER_03: 48:42

Yeah, thanks, Nathan. It's been a pleasure.

SPEAKER_01: 48:47

I'm not gonna lie. At the start, I was actually really worried about pulling it back from a doom and gloom story, which I think we needed to hear from Zalton because it is the truth around running a fashion label that is environmentally conscious and tries to rewire the way that the fashion industry works. If it was easy to do, someone else would have done it. And so I'm so glad that Zalton gave us the reality and the pain of how hard it is to do what he's doing. But I especially love that he's taken the piece that's probably the easiest, as in the technology, and given it to other retailers to try and scale their impact in that area. And again, not only is it good for the environment, but it could be good for the bottom line as well. That's a language we all love. All right, here is three big ideas that I took out of that conversation with Dalton that I think you should be thinking about. Number one is fit as a conversion lever, or even more than that, as a USP. Now, we know that the world is opening up, that while websites are still the main way that customers are shopping online, it's not gonna be that way forever. Apps, marketplaces, social media, GPTs, they're all gonna open up the checkout. However, if we're thinking now around how do we make our own websites that unique experience that you can't get anywhere else, fit is an invaluable part of that, especially if you're a fashion or apparel label. So if you can create an experience online where customers feel confident that they'll get the right fit the first time, because remember, customers don't like returns either. As much as you hate them, they hate them as well. If customers can feel confident that they'll get the right fit and the right style for them the first time, all of a sudden your website has a point of difference. We're going to need to think about more and more of these differentiators if we want our websites to remain part of that customer journey. Number two, when we're talking about collecting customer data, I love the point around making it as simple as possible. We are always going to want more customer data. Every time, if someone said, Can I give you more customer data? you'll always say yes. However, there is that fine balance between asking for too little, in which case the customer goes, Well, what good is this going to be? How are you going to personalize anything? And asking for too much, in which it becomes laborious, that it becomes a chore that customers give up and they never return it. Zalton talked a lot about that, especially when fit is only one part of the journey. One part of the customer data we're asking for. We're also going to ask for payment, we're going to ask for loyalty, we're going to ask for all these other areas. So go through your customer journey and have a look at where you're asking for customer data and where the drop-offs are. Are you asking for too much or too little? Getting that balance right at key points throughout the customer journey is going to be crucial for making sure you get the actions that matter. And the last idea that I want to call out is sustainability as a commercial outcome. While I have been accused of putting forward a lot of left ideas, a lot of big picture, a lot of environmentally sustainable, ethical, inclusive ideas, I strongly believe that they all have a commercial outcome at the bottom of them. As you heard from Zolden, he's able to justify this through conversion rates and average order value that he sees by brands who implement magic fit. That is going to be the secret for any ethical, sustainable solution that goes onto an e-commerce experience. At the end of the day, we've all got to be profitable, but they don't have to be separate outcomes. Oftentimes, doing the right thing and having a commercial outcome go together. If you're a service provider or a technology provider, being able to articulate that, or if you're in e-commerce, being able to explain how it provides an uplift will be the way to make a change by putting it through that commercial lens. They don't have to be separate things. Alright, that's everything today from Add to Cart. Thank you so much for joining us again. If you liked what you heard, make sure you hit that subscribe button on YouTube, on Spotify, on Apple. We'd love to bring you these episodes every week. The best ideas and the best innovations in e-commerce to help you be better. And if you want to go that extra step in being better, come on over and join the Add to Cart community. It's free to join, and we have over 500 e-commerce professionals in there who are constantly sharing tips, ideas, questions around what they can be doing better in e commerce. We would love for you to join us, head on over to adducart.com.au to join up. All right, see you next week.