The online apparel industry faces a significant challenge with a return rate of 24.4%, which has surged by over 50% since 2020. A substantial 39% of these returns are attributed to sizing dissatisfaction, while 13% result from customers purchasing multiple sizes to find the best fit. Laws of Motion is an AI-powered sizing technology that revolutionizes the shopping experience for consumers and brands by using over 2B data points of body measurement to train its model.  The solution is an API-based platform, originally developed within the founder’s womenswear brand, that offers seamless integration to ensure accurate sizing across various geographies, brands, manufacturers, etc. with a single line of code. Laws of Motion has reduced the return rate to less than 1% for its early adopters. The company’s confidence in its system is reflected in its unique licensing model, which operates on a pay-for-performance basis, rewarding increased sales and reduced returns.  Partners on the platform are given a robust, real-time dashboard to monitor key metrics such as conversion rate, size sampling, and return rate, empowering them to make data-driven decisions.

AlleyWatch caught up with Laws of Motion Founder and CEO Carly Bigi to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…

Who were your investors and how much did you raise?

$5M seed round.

Led by Corazon Capital (a US-based fund co-founded by Sam Yagan, former ShopRunner CEO and cofounder of OkCupid), with participation from Sequoia (Scout Fund), Leadout, and top retail investors including John Howard, Co-Managing Partner of Irving Place Capital and a Board Member of Good American, Skims, and Frame, and Eva Jeanbart-Lorenzotti, Raine Group Senior Consumer Advisor.

Tell us about the product or service that Laws of Motion offers.

• AI sizing technology incubated in DTC brand with 1% return rate
• Virtually predicts body measurements with 99% accuracy
• Licensing to apparel brands to help solve $1T return crisis and understand how to refine and extend sizing to better fit their actual customers

What inspired the start of Laws of Motion?

Laws of Motion is an AI sizing technology company that helps customers know their size when shopping online and helps solve the $1T e-comm return crisis for apparel brands. As more consumers do most of their apparel shopping online, they’re faced with the challenges of sizing inconsistencies – across geographies, brands, and even within brands.  These inconsistencies have contributed to a significant growth in size sampling and returns –  80% of returns are caused by fit issues and 63% of customers are ordering multiple sizes of the same product. Apparel returns are a $1.3T crisis for apparel brands each year and contribute to more than 25B pounds of textile waste annually.

Laws of Motion’s AI sizing technology was incubated in its DTC womenswear brand which has achieved a <1% return rate, which is unheard of in an industry where return rates are typically 35-50%.

How is Laws of Motion different?

Laws of Motion is the first sizing technology incubated within an apparel brand. It’s also the first to provide real-time transparency about the impact of its SaaS offering and back the confidence in its technology’s effectiveness with performance-based pricing (that’s right – Laws of Motion is paid based on the impact it has to its brand partners’ bottom lines).

Because Laws of Motion functions as an API, it only requires one snippet of code to be added to a brand’s site and they’re live within days. Future iterations of onboarding will include self-service with nearly instant implementation. Brands then gain access to real-time dashboards that report the impact to their most important KPIs like conversion rate, size sampling, and return rate, while also visualizing opportunities to refine and extend their sizing to fit their actual customers.

What market does Laws of Motion target and how big is it?

Laws of Motion is targeting the $2.6T market of apparel, shoes, and accessories. In its first year of licensing its AI sizing technology, Laws of Motion is focused on global apparel brands, and then will expand into other categories.

What’s your business model?

We built the sizing technology in a DTC womenswear brand that has a <1% return rate and continues to serve as an R&D incubator

We now license the AI sizing technology to other brands so that customers can determine their best fitting size when shopping online, and brands can understand how to refine and extend their sizing to better fit their actual customers.

We are the only sizing technology that uses a pay-for-performance model.  Our technology features a real-time analytics dashboard that shows brands the impact of Laws of Motion’s tech on their most important KPIs like returns, conversion, and size sampling. These metrics are then used to establish pricing – brands only pay based on proven increased revenue and decreased costs from customers using the technology.

How are you preparing for a potential economic slowdown?

Laws of Motion’s AI sizing technology is uniquely positioned to help brands effectively navigate the potential of an economic slowdown because it helps brands increase their profitability through increased conversion, reduced size sampling, and reduced returns. Moreover, Laws of Motion is priced based on its performance, so brands only pay for value added to their bottom lines.

From a consumer standpoint, Laws of Motion helps customers know their best-fitting sizes when shopping online, which reduces size sampling and saves customers time and money – both of which are important in the event of an economic slowdown.

What was the funding process like?

Laws of Motion views investors as exponents, bringing network and know-how outside of the core team, and the Seed round was an example of just that, including the best consumer tech VCs and fashion industry legends.

What are the biggest challenges that you faced while raising capital?

Despite some initial skepticism about sizing technology as a category, investors were wowed by the KPIs of the DTC brand that incubated it, and noted the power of being able to help other brands achieve similarly impressive results. The return rate reduction combined with the performance-based pricing differentiate our product from any other previous “solutions” in market.

Laws of Motion raised an oversubscribed $5M seed round in one of the hardest fundraising climates in more than a decade – in 2023, startups founded exclusively by women raised 2% of the total capital invested in US-based VC-backed startups. Rather than seeing this as a challenge, Carly embraced being a female founder in tech as a superpower, demonstrating resilience and a growth mindset throughout.

What factors about your business led your investors to write the check?

Differentiated operating model to develop the most cutting-edge sizing technology for apparel brands, which virtually predicts body measurements with 99% accuracy. Proving the efficacy of their solution in their own DTC brand, which has less than a 1% return rate and 86% customer retention.

Amassing over 2B data points of body measurements to custom-train its AI.

Putting their money where their mouth is, developing a performance-based pricing model that aligns Laws of Motion’s pricing for its solution with the value it adds to brands’ bottom lines.

What are the milestones you plan to achieve in the next six months?

• Onboard first 35+ brands by EOY
• Launch beta of avatar functionality for virtual try-on
• Scale licensing operations, engineering, and R&D teams
• Expand into new markets

What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?

1. Ideas are free – stay focused on execution, measure what matters, and remember your reason for being
2. Invest in people – tiny teams can create outsized impact with the right combination of alignment, ingenuity, and X-factor
3. Leverage your network – people get things done, not process. Forge relationships with humans who can help and be specific with asks of them

Where do you see the company going now over the near term?

1. Onboard initial cohort of apparel brands
2. Make key hires for licensing operations
3. Continue to leverage Laws of Motion’s DTC brand as and R&D incubator for additional tech features

What’s your favorite restaurant in the city?

My apartment – I’m always hosting dinner parties with industry leaders, world-changing founders, and phenomenal humans from different parts of life (and I make the best dirty martini in the city). Feel free to reach out if you’re in NYC and fall into the above categories!

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• Source: https://www.alleywatch.com/2024/05/laws-of-motion-ai-sizing-technology-platform-proper-fit-virtual-reduce-returns-carly-bigi/