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With AI playing the roles of CD and MD, Dali Hotel achieves 100 million KRW in weekly sales with zero marketing expenses
Dali Hotel, an office wear brand acquired by co-representatives of AI generative company Designovel Woo-Sang Song, Ki-Young Shin successfully achieved a comeback in its revenue after most of the fashion staff resigned.
Dali Hotel was launched in 2018 in an effort to bring romantic style to office wear. It recorded daily sales of 10 million won for a while, but was hit hard when people started working from home during the COVID-19 pandemic. It was acquired by Designovel, with whom it was in a partner relationship for AI solutions, and this eventually led to the revival of the brand.
One of the reasons may be the increase in the number of people who started looking for office wear as the pandemic eased, but the main reason for Hotel Dali’s recovery is the change of direction in the operation of the brand using generative AI – Designovel’s core technology – going forward the resignation of most of its staff who specialized in fashion after the acquisition.
The fashion staff who worked at Dali Hotel in the past spent over half of its sales revenue on marketing, but they failed to reach 100 million won in monthly sales. After they left the company, Designovel turned its business direction to data-driven branding operations.
For the sales plan, they decided on products that were growing based on the analysis of the last three to four years of trends. Using Vector Search developed by Designovel, the company developed key products that will drive sales by controlling the change in consumer demand. Products were created based on trends and patterns predicted and suggested by generative AI, and thus, they were able to produce and sell goods that catered to people’s tastes before others. It was AI playing the roles of CD (creative director) and MD (merchandising) that are at the core of the fashion business.
Well-known brands usually spend 10 to 20 percent of sales revenue as marketing expense, but Designovel only spends 2.5 percent of Dali Hotel’s monthly sales on marketing, which means there are many products that sell well without much advertising.
The data not only reveals trends, but also helps determine when, to whom and at what price to sell. One of the roles of AI is to discover the price range that consumers respond to and set the optimal price. The key differentiator is data-driven decision-making, as opposed to decision-making based on human intuition in the past. New features that apply deep learning, including Vector Search that allows fast searching of such data, are offered to accommodate market expectations.
CEO Ki-Young Shin of Designovel commented, “We have to wait a little longer until the generative AI model can make money. We could see that by using AI, we could make money faster and more efficiently. We also confirmed that our AI model worked accurately in the market and that it had marketability.”
Designovel is a startup that started studying the generative model – which has attracted attention in the AI industry – early and is trying to commercialize it. It launched fashion products made on the basis of a generative model in cooperation with a large Korean fashion company in 2018, which was just before Amazon’s announcement of product design based on the generative model in the US, and thus, created huge ramifications in domestic and foreign markets. . It won excellent results in the Fashion IQ Challenge at ICCV in 2019 and is progressing with the commercialization of the generative model based on its advanced deep learning technology. The incredible growth of Dali Hotel can be seen on its official website (dalihotel.co.kr) and Instagram account (instagram.com/dalihotel_official/). Successful fashion brand recovery through Designovel’s fashion market analysis services in the retail market, etc. and generative AI, heightens our anticipation for more news on business development based on generative AI.
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