Fashion firms frequently have to ‘guestimate’ demand for their products due to the complex nature of the market, and if they get that demand wrong, they must deal with squandered inventory. Clothes are frequently burnt unnecessarily, increasing their environmental impact.
The startup has now raised $4M in a funding round led by California-based VC Unusual Ventures. The round also saw participation from previous investors Connect Ventures, Moxxie Ventures, and the family office of Indeed co-founder Paul Forster.
Purple Dot, a startup founded by senior Skyscanner employees Madeline Parra and John Talbott in 2019, claims to be able to help eCommerce retailers “sell inventory early as a strategy to maximise sales, establish brand loyalty, and access demand data earlier.” Inventory can be sold before it arrives in the warehouse thanks to Purple Dot’s waitlist solution. According to the company, it is the only solution of its kind on the market.
“By selling early, brands open up a whole new window to capture sales,” said Madeline Parra, CEO and co-founder of Purple Dot. The traditional attitude and technologies imply that you must have inventory in the warehouse in order to sell it. However, because selling and shipping can be asynchronous, you can always be selling using Purple Dot. For our brand partners, this is the “A-ha” moment. A committed approach that gets the customer experience and internal tooling correct is required to get a sell-earlier strategy right. We’re thrilled to be the first to introduce waitlist shopping as a solution for selling early and to give ecommerce firms a platform to rethink when, how, and what they sell.”
Moving away from old-age commerce models
Until now, eCommerce businesses and stores followed traditional brick-and-mortar retail strategies, which required things to be in stock in the warehouse before being sold. With the industry’s supply chain concerns, this is becoming a significant problem for online retailers that are losing money due to stock delays. Pre-ordering solutions in the past have frequently failed to help brands to improve customer experience and inventory management.
Purple Dot’s waitlist solution allows the product to be sold before it arrives in the warehouse, enabling anything from pre-orders to out-of-stock management while putting the consumer first. It resembles Klarna or Clearpay in that it doesn’t encourage consumers into debt, instead offering a ‘worth-the-wait’ price. It lets consumers request a fashion item at a price slightly below the RRP – brands can then determine whether to sell a product at that rate over a 1 to 8 week waiting period.
Purple Dot functioning
Purple Dot assists businesses at every level of the process, from allowing a specialised pre-order customer flow with an embedded checkout to internal and external tooling that manages pre-orders to an advance payout solution that allows brands to access cash flow sooner. Customers can cancel or check delivery dates directly with Purple Dot at any time before a pre-ordered item ships, and these orders are stored outside of the brands’ normal order management system until stock arrives at the warehouse.
Purple Dot’s technology works with a number of popular eCommerce platforms, including Shopify Plus.
“Purple Dot has opened up a huge new revenue line for us,” said Adam Woodhouse, COO of SPOKE London. We sold out of the goods eight weeks ahead of schedule, resulting in a 400% greater sell-through rate than expected. We can launch new product lines faster and never run out of evergreens thanks to Purple Dot’s waitlist technology, all before the product is even in the warehouse.”
“Madeline and John represent the essence of the kinds of founders and businesses we invest in at Unusual Ventures — those that are solving the most pressing problems with a fresh perspective by employing fascinating and game-changing innovation,” said Rachel Star, an investor at Unusual Ventures. Pre-orders and waitlists, we believe, will determine the future of online buying. Purple Dot is more than an eCommerce enabler; they are reinventing how supply chains are managed and how brands sell.”