AI-powered fashion tips: M&S buys Thread to boost personalisation

Are the days of browsing endless rails of clothes coming to an end? An iconic UK department store chain is betting on next-gen tech to help customers find their perfect outfit, hoping to boost sales by £100m in the process.

Thread, a UK-based AI fashion recommendation portal, has been acquired by the clothing and department store giant M&S for an undisclosed sum.

The move comes as Thread recently shut down its web presence. The startup combines insights from human stylists with AI to recommend clothes to match the customer's body shape and style, with the clothes sourced from various fashion brands, including M&S.

Thread’s intellectual property (IP) has been snapped up as part of a pre-pack administration, an arrangement where assets are sold off ahead of insolvency. M&S will bring on 30 staff from Thread, as well as take on its IP and artificial intelligence know-how.

£100m a year sales boost with improved personalisation

M&S believes Thread’s technology can help it boost online sales by £100m per year by improving personalisation.

The acquisition provides the opportunity to integrate the cutting-edge, proprietary tech into the M& platform to accelerate personalisation and deliver a unique customer experience.

The personalisation capabilities will stretch across all clothing products available on M&, including the retailer's third-party brand partners.

In recent years, M&S has generated substantial value through its customer data, personalising offers and language and providing repeat purchase and product recommendations, with 20 to 25% of all its digital interactions anticipated to be personalised this year.

Outfit recommendations have proved particularly valuable; the ‘frequently bought together’ recommendations are estimated to be worth an incremental £20m of revenue over the last 12 months.

As M&S reshapes for growth, the acquisition of Thread reflects the company’s new ‘buy not build’ approach, enabling it to move quicker in its personalisation strategy, integrating the tech in under 12 months versus a likely three-year build timeframe.

Katie Bickerstaffe, Co-CEO, Marks & Spencer commented: “We’re taking personalisation to the next level to inspire our customers with tailored outfit inspiration. We have been working hard to deliver better, more stylish ranges and this algorithm will also put more of our great product in front of the customer, whilst further unlocking the potential of our third-party brand strategy, by adding outfit completing product ideas

“We already know the incremental value personalisation can bring and we anticipate that personalisation will generate more than £100m of annualised incremental revenue for the business.”

New discovery team

Following the administration of Thread, M&S is hiring 30 of the portal’s former data scientists, software engineers and styling and creative teams, who will lead the integration and form a new personalised discovery team within its data and digital function. This includes Kieran O’Neil and Ben Phillips, who founded Thread in 2012.

O'Neill commented: “We have worked for the past 10 years on building the most advanced AI personalisation for online fashion, proven to increase customer conversion and repeat orders. We’re so excited to join forces with M&S; through its infrastructure and support, we’re able to take our market leading technology to the next level, providing a personalised and unique shopping experience for its 30 million customers.”

O’Neill joins M&S this month as Senior Head of Product.