Fixing Fitting Rooms (and Startup Pitches) with Olivya Munro

0:02 Alan Jones: Suzzallo is a fitting room assistant for fashion retailers.

0:06 Olyvia Munro: So you're just swiping through inventory, finding the blouse.

0:09 Alan Jones: I left the fitting room, I left the store actually, without buying anything.

0:13 Olyvia Munro: The person who actually uses the service is always like a really important place to start.

0:17 Alan Jones: We've already got 5 of Australia's biggest retailers in our pipeline.

0:21 Olyvia Munro: Cross my arms like a skeptical middle-aged white man. Give me your best pitch. Welcome to another episode of Pick My Brain, the podcast where founders pitch their startup and I try to give them some useful advice on how to improve their pitch so that they can connect better with potential co-founders, investors, media, and customers. My name's Allan Jones, and I was a founder myself for about 15 years, and after that, an angel investor for another 15 years. So yes, I'm very old. Some of my inventions have been successful and some have failed disastrously, but perhaps I've learned a thing or two along the way. And maybe some of that can help you here on the Pick My Brain podcast. On today's episode of Pick My Brain, we'll be joined by Olivia Munro of Zello Studio. But before we begin, I'd like to acknowledge that I'm recording on the lands of the Gadigal people of the Eora Nation, and I'd like to recognize their leaders and innovators past, present, and emerging. Always was, always will be Aboriginal land. Olivia, thank you for joining me on Pick My Brain today.

1:25 Alan Jones: Hello, thank you for having me.

1:27 Olyvia Munro: Can I ask you a couple of warm-up questions before we begin?

1:31 Alan Jones: Of course.

1:32 Olyvia Munro: When you were little, what did you think you'd be when you grew up?

1:36 Alan Jones: I actually wanted to be a fashion designer in Paris. I'd actually designed my own fashion studio called Oliviana's Designs. Yeah, bit diff, never imagined that I'd be in the tech space, but here I am.

1:49 Olyvia Munro: Here you are. Well, I thought I wanted to be a long-distance truck driver. Way off brief, way off brief. Um, I, I have another question, um, and then we have a third question we'll come back to at the end of the episode. What were you doing before Zillow Studio, and how did that lead to this?

2:06 Alan Jones: Yeah, well, I was actually working in PR and comms for a range of B2B tech startups, um, and I just became obsessed with the space. I spoke to a lot of founders, interviewed a lot of founders for my job, And I just really, I just felt called to the startup ecosystem. And when I came up with the idea for Zello, I just knew it's where I wanted to go.

2:28 Olyvia Munro: That's awesome. Now, I saw you on stage at Startmate Demo Day, most recent cohort that graduated.

2:34 Alan Jones: Thank you.

2:34 Olyvia Munro: So I know for a fact that on the big stage, under all the lights, in front of a room of 1,500 people, you can acquit yourself very capably indeed. But I'm hoping that maybe if we work through the kind of pitch that you have when you're having a meeting with someone, that maybe I might have some advice or support for you in that area too. Would that be cool?

2:56 Alan Jones: That'd be amazing.

2:57 Olyvia Munro: Thank you. No worries. Now let's think about who ideally, you know, who's this pitch for? Like, who do you most want to connect with in your near-term goals?

3:08 Alan Jones: Yeah, we really want to connect with people working in fashion retailers and anyone on the operations side of things. So heads of retail, chief operating officer, national operations manager, anyone in that space.

3:21 Olyvia Munro: Cool, great. Okay, with, with that, um, framing in place, let's, let's, let's kind of go. Maybe I'm going to sit back and cross my arms like a skeptical middle-aged white man. Um, give me your best pitch.

3:35 Alan Jones: Yeah, done. Um, so Zalo is a fitting room assistant for fashion retailers. And the way we originally came up with this idea was at the start of 2024, so around Christmas time last year, and I was shopping in store and went into a fitting room, couldn't find any of the items that I wanted when I was in the fitting room. I tried on items, they weren't my size, and it was just a really messy, messy experience. I couldn't get assistance from anybody when I needed help, and I was just stuck in the fitting room. So I had to put my clothes back on, go back outside of the fitting room, when I did find the items that I wanted myself, I, I went back to the fitting room and realized there was a huge line and I just couldn't be bothered trying anything on. So I left the fitting room, I left the store actually without buying anything. And it just got me thinking, how many other shoppers feel this way? How many other shoppers do this? And how much money is it actually costing the fashion retailers? And that's when I started speaking to a whole heap of fashion retailers and shoppers. And we found that 91% of shoppers are dissatisfied with their fitting room experience in one way or another. And given that 70% of purchasing decisions are made in the fitting rooms, I found that this is— this just didn't add up. Why, why was it such a messy experience? And why do we use tech in every other aspect of our lives, but yet when we go into a fitting room, we still do it the same way that we did in 1920? And it really got me thinking, and that's how we came up with the idea for a fitting room assistant. But then when speaking to the retailers, we learned that they actually have no way of getting data of what goes in and out of the fitting rooms. Ultimately, the fitting rooms are a black hole for them. And so yes, we are a fitting room assistant, but we're a fitting room assistant for fashion retailers because we provide them with the data of what's going in and out, what's most popular, what items are least popular, what items have been tried on, but then not converting into purchases. Because at the moment they get that data just from store managers sending an email at the end of a shift. And it's, it's, it's really anecdotal and they use this data for a whole heap of decision-making. And so we provide an admin dashboard to them that essentially gives them this data in a really easy to understand form and everyone can access the same data. And how it works. So what Zeller is, it's an app that's downloaded on a tablet and essentially the tablet is mounted onto the wall inside a fitting room. So let's just say you walk into a fitting room with a blue t-shirt and you go in there and you realize that the size you've tried on, that you've brought in, isn't correct. You can then scan that blue t-shirt into the Zalo tablet and it'll pop up on the screen and you can then request a size medium, essentially. That will then send a notification to the staff members who are on the floor to a device that they're carrying around. And it'll pop up and it'll say, "Alan in fitting room number 1 has requested this blue t-shirt in size medium." And so while you're inside the fitting rooms and you're wondering, "Oh, I need a new size," you're not thinking, "How am I going to get the new size?" You're thinking, "What else do I need to buy? What events do I have coming up that I need an outfit for?" And that purchasing decision-making is happening rather than the anxiety of, "I'm standing in the fitting room half naked." Mm-hmm. That anxiety thought's happening. And that's essentially how it works. There's also a styling feature which acts as an upsell feature as well to get shoppers to try on as many items while they're in the fitting room, which then as a result increases the basket size for the shop, for the retailers, and then as a result they make more money out of the shoppers from there.

7:16 Olyvia Munro: Great, thanks Olivia.

7:18 Alan Jones: Yeah, that's essentially how Zalo works.

7:20 Olyvia Munro: I get how it works. Should I be a fashion retail operations person? It's not something I've ever done before, but a few questions arose in my mind.

7:31 Alan Jones: Yeah.

7:32 Olyvia Munro: And first, you know, I just want to score a cheap point and say, you know, find yourself a boy or a girl who loves you so much that they'll go and fetch those different sizes for you from the rack. I mean, that's true love, right?

7:44 Alan Jones: The boyfriend seat.

7:46 Olyvia Munro: Yeah, you know.

7:47 Alan Jones: Yeah, yeah, yeah.

7:47 Olyvia Munro: Yep, yep. I have a photo of like 3 boyfriends all sitting on the bench. Outside the change rooms.

7:52 Alan Jones: It's funny you say that. Retailers are actually creating their fitting rooms around having a boyfriend seat now, so that— because they know how big of a problem it is in the sense that boyfriends come in and they've got nowhere to sit, so they just stand on the— in the corner on their phones. Whereas— so it's actually funny, it's funny you say that. There's definitely a thing.

8:11 Olyvia Munro: We need good free Wi-Fi.

8:13 Alan Jones: Exactly.

8:13 Olyvia Munro: Whether it's boyfriends or girlfriends, we need good free Wi-Fi because it takes a while in between requests to go and get a different size. Um, but, but I imagine, um, putting, uh, screens on walls in fitting rooms. I mentioned that the fashion retail industry at the moment doesn't spend an enormous amount of interior design budget on, you know, like a lot of fitting rooms seem to be just some cheap chipboard and a couple of cheap curtains with a string. In the conversations you've had so far, people are ready to put tablets up on the wall?

8:44 Alan Jones: Yeah, so it's not that— it's to a lot of people's surprise, it doesn't actually involve that much damage to the walls. All it basically is— so we, we partner with a company who pop the tablet in a theft and damage-proof case, and then it gets mounted to the wall through just a simple connector which puts like a small hole into the wall, and it just gets screwed in that way. And it can be easily plastered up or removed if the store's been changed around. Um, it's also not that expensive. So you're right, retailers don't want to put a whole heap of money into the interior design of their fitting rooms, and it's only about $150 to install the theft and damage-proof case on the wall.

9:30 Olyvia Munro: I know the, the camera and the tablet is, is just taking a photo or video to, to tell what garment I'm currently wearing, but in your customer research, is there any hesitation from, from fashion consumers about pressing a, you know, a, a photo button? Something's going to take a photo of me while I'm standing dressed in the change room?

9:52 Alan Jones: Yeah, so actually we don't actually take any photos of the shoppers. The way Zelo works is it doesn't actually show you what the items look like on your body yet. Um, we did plan to go into augmented reality in the future, but at this stage it's more of a browsing and a styling tool. So the cameras aren't active and the tablets are locked, so people can't go in there and take photos of themselves like you do when you you go into an Apple Store, it's very secure, very locked. You need a password which only the retailers have to access that.

10:22 Olyvia Munro: So you're just swiping through inventory, finding the blouse that you've got, and choosing a different size?

10:27 Alan Jones: Yep, it essentially looks like the retailer's website, and you can just browse through the items as if you were in your bed at home.

10:32 Olyvia Munro: Gotcha. And then the device that the sales assistant is carrying around, is that, uh, um, just their own mobile phone with a, with a phone version of the app?

10:41 Alan Jones: No, so a lot of retailers actually use devices already and have the retail assistants carry around devices. So for example, Cotton On use their devices, which they called a Mobi device, and essentially it's just an Android phone, and they use it for inventory and stock count and stock management. And Zello just fits seamlessly into there by— it's just an app that's downloaded onto the phone, and then the notification comes through that way. Cool.

11:06 Olyvia Munro: How much progress have you made towards bringing this to market? Where are you in developing the product and commercialization?

11:15 Alan Jones: Yeah, so at the start of August we had no product. We then built out our MVP in 4 weeks and launched in store in Kavari, which in— at the start of October, which has been really exciting. That's in their Pacific Fair store, so in the Gold Coast. And we are also in talks with a couple of other large retailers, which unfortunately I can't say here on the podcast, but, um, we are working with one of Australia's largest retailers at the start of 2025, which is super exciting. I think they're also a huge brand that, um, is in need of a shake-up when it comes to their store experience and digital innovation and targeting the younger generation. So that's really exciting, and to see how that goes, uh, with them.

12:02 Olyvia Munro: Cool, thank you. Well, um, so Olivia, thanks very much, um, with me role-playing a operations executive. That's about as deep as I can go. I bet they'd have way, way more questions than me. But I wanted to give you some feedback on your pitch, which I think is great. You're off to a cracking start. So one challenge that a lot of people who start up have is that it's hard for them to get out of the product part of the story. They want to tell you more and more about what's in the software or what's in the hardware, how these pieces communicate with each other, and way too much detail about all the data that's being collected and, you know, the ARPU and the TAC and all that. Yeah. LTV, right? You connect immediately with the problem of the end consumer, right? And without that customer, you know, they're not paying to use the service, but the person who actually uses the service is always like a really important place to start because unless we understand and we believe that we're solving a valuable problem for them, then none of the rest of it stacks up, right? So I think that's a really great place to begin the story. I think another really great thing about your story is when I started asking you questions, even though I'm clearly not a fashion industry executive. I'm wearing a t-shirt that I printed myself.

13:14 Alan Jones: Yeah.

13:18 Olyvia Munro: So even though I was just role-playing, like you didn't, you know, sometimes people can be a bit combative when a startup investor, for instance, is, you know, throwing in some questions to kind of test some of your assumptions. Oftentimes a founder can be a little threatened by that or a little defensive about that or a little aggressive sometimes even. And there was nothing about that in the way that you answered the questions that I had. You were, you know, confident, you know, really great balance of confidence, industry knowledge, and clarity and conciseness. All of that stands in your favor, and I think that probably comes from your background in communications.

13:56 Alan Jones: Thank you.

13:57 Olyvia Munro: So a lot of people could learn a lot from how you manage that. I think for me, the one thing that I'd love to add to the next version of this pitch would be those things around where I delivered the question. So there's a delicate balance between anticipating all the questions that are likely to come up and answering them in advance. We don't wanna do too much of that because oftentimes our audience won't have thought of those questions themselves. And so if you answer them, they'll basically go, whoa, well, uh, maybe, you know, there's other questions I should be thinking of. And that can make some people, you know, paranoid and start digging deeper than they really otherwise would. Um, but at the same time, I, I think it would be helpful, you know, fashion retail's not on the bleeding edge of, of, of technology most of the time. And, and. It might help to tell those people, to give them a quick highlight view of where you are in terms of bringing this to market. You know, so towards the end of your pitch, we're already in store on the Gold Coast with retailer.

14:56 Alan Jones: Hmm.

14:57 Olyvia Munro: And I can't tell you who right now 'cause we're under NDA, but we have a major retailer about to come on board with us or a letter of intent stage or something like that. And maybe you could talk about, The fact that they are national, if they are national, or international, if they are international, or maybe how many, you know, roughly how many outlets they might have. You know, like if you said greater than 200 outlets, that would kind of give other fashion industry people a sense for— most people would assume you're starting with little retailers, then getting big. If you're already talking to big retailers, then that's either a sign that you're really good at this, or that you're solving a really valuable problem and big players in the industry already see potential for that. Either of those two signals would be great.

15:38 Alan Jones: Yep, yeah, no thank you.

15:41 Olyvia Munro: Was that helpful? Do you have any questions for me about your pitch?

15:44 Alan Jones: No, that was really, really helpful. Um, if you were an investor, what would be the number one thing that you would want to know from me after that pitch?

15:54 Olyvia Munro: Uh, so, uh, the number one thing was, was literally, um, uh, progress towards commercialization. Yeah. Often, um, I, I probably wouldn't do this, but most, many investors will want to know something about the commercial value of these relationships. So what do you think the commercial model's going to be? Are you gonna be charging per screen or per venue or per number of lookups, you know, or—

16:21 Alan Jones: Oh, I gotcha.

16:22 Olyvia Munro: Whether you make, if you increase the, what is it, the shopping basket, if you increase the average shopping basket when somebody uses your product, you could structure the revenue that, you know, you structure the charges based on, you know, a percentage of increase of basket or something. So they'd probably be asking some questions around that.

16:42 Alan Jones: Gotcha. Yeah, no, interesting. At the moment we charge per month per fitting room on a subscription basis. But yeah, what you're saying there about the basket size, that's a very interesting one. And that's our sole value proposition as well. So yeah, that's a good one to think about.

16:58 Olyvia Munro: When you're selling to tech-resistant industries, And so like fashion and a lot of other retail right now is really under pressure. As we know, there are, you know, brands and retailers shutting down all the time and they're just kind of trying to squeeze out as much value as they can out of whatever budget they have left to spend. Sometimes the risk of spending a little bit more in order to make more is just too great. And so sometimes if we can find a way to kind of structure our pricing so that if they win, we win. It makes them feel like they're taking less of a risk, or at least that our risk and their risk is aligned.

17:34 Alan Jones: Yeah.

17:34 Olyvia Munro: So if it works for them, it's gonna work for us too.

17:37 Alan Jones: Yeah.

17:38 Olyvia Munro: Another way to go is to get it out there in field on a free pilot basis for a little while, but that's gonna be prohibitively expensive for you probably. And it's also, there's a risk there that when people get something for free, they tend to either massively overutilize it or massively underutilize it. And both of those distortions mean that they get an unrealistic expectation of what— of the value that the product brings. And also, you get to learn much less about the true use of a commercial product when it's been charged for. Yeah, so I wouldn't recommend that in this case.

18:12 Alan Jones: Yeah, no, interesting. No, thank you.

18:14 Olyvia Munro: So maybe you could go out, you know, with a— is a fixed price for per fitting room, and people go, yeah, you come back, okay, look, this is something I'm going to do just for you just today, don't tell any of your rivals, but could we work on a model where if I increase your average basket size, I'm able to charge you a percentage of that increase?

18:36 Alan Jones: Yeah, yeah, no, that's a good idea. No, I never thought about it like that, so thank you.

18:41 Olyvia Munro: Oh, no worries. So I have one more question for you.

18:44 Alan Jones: Yes.

18:45 Olyvia Munro: And that is, if we invested $1 million in your company to start building a team, what kind of employee would you hire first?

18:52 Alan Jones: Oh, I think for us, we would really wanna hire a killer software developer who's got some experience in like design and UX as well. We are going to be on a massive growth journey next year. We've already got 5 of Australia's biggest retailers in our pipeline. So someone who's also worked in the fashion retail or with fashion retailers before would be great. But yeah, anybody who has got some really strong experience working in startup or scale-up space would also be really ideal.

19:27 Olyvia Munro: That's a great idea, Olivia. I like that a lot. Olivia, thank you so much for coming on the show today. Anybody who's interested in finding out more about Zello Studio can go to zello, Z-E-L-L-O, studio.com. So that's Z-E-L-L-O-S-T-U-D-I-O dot co, ZelloStudio.co. Olivia, thanks so much for appearing on the show today. Really looking forward to following your journey in the months ahead.

19:56 Alan Jones: Thank you, and thank you for having me.