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“Call me crazy, but I’m hoping we can build something standalone,” “The e-commerce business is really challenging, and we feel like with this online-offline eq

“Call me crazy, but I’m hoping we can build something standalone,” “The e-commerce business is really challenging, and we feel like with this online-offline equation we’ve really unlocked something that can scale,” “I have a long vision for the company, one that could take decades to unfold, and I didn’t think that my running the company day-to-day was necessarily optimal to getting there.” So after 8 years unable to scale, they now want to scale by building brick-and-mortar stores where you can try a product that you can only buy online? Am I missing something here?

bonesinger 11y ago
I agree, I think its weird. I went into one of their stores and the employee was working with someone else. Since I can't buy anything, I just walked out. I did end up buying their clothes on their website and the cost was pretty good after coupons. The clothes themselves are awesome and fit me perfectly. I also like their website, especially the filter they have, it's very responsive.
jraines 11y ago
I walked into their store in Manhattan (unaware it was this model) because I'd heard of them, and knew from their ads that their pitch is about how great the fit is. The salesperson was busy with a customer who was confused (and a bit rudely angry) that he couldn't just buy something now. He walked out, and so did I. To continue this sample of one anecdata: my shopping usually goes: "hey, there's a store that sells pants -> I could use some pants -> let's get this over with"
- DanBC 11y ago
  And also: -> I better buy two or three pairs if I like them, because in 4 months they're going to stop selling these and they are a comfy fit.
- AndrewKemendo 11y ago
  "hey, there's a store that sells pants -> I could use some pants -> let's get this over with" Interesting because mine is "I could use some pants -> where is a store that sells pants? -> let's get this over with" I wonder how different your or my experiences are compared to the population.
  - jraines 11y ago
    Mine would be the same as yours except that I live in Manhattan and often walk around Midtown / Union Square where there are tons of clothing retailers.
saosebastiao 11y ago
It is a genius move. Their real estate leases and operations are surprisingly cheap when it comes to brick and mortar because the footprint is so small. And they have completely eliminated the most dangerous and costly aspect of B&M: inventory management. The more stores you have, the more fractured your inventory is. Every location adds incremental safety stock. Safety stock in fashion, where each color/size combo is a unique sku, tends to be at least an order of magnitude greater than the mean forecasted sales...much higher for the high end stores where an out of stock situation is a major hit to your brand image. Pure e-commerce fashion companies have a huge advantage in inventory management because they aggregate their inventory in a single warehouse instead of spreading it out amongst hundreds of retail stores. But they have struggled because of concerns about fit. People tend to fall into two categories when it comes to buying clothes online: 1) Buy it anyway, try it on, and return everything that doesn't fit, and 2) Don't buy at all. #1 is extremely costly because reverse logistics is extremely costly (personal experience is 3-10x more expensive than equivalent forward logistics). #2 is a no-revenue situation. Bonobos is doing something risky, sure...but it is novel and, in my opinion, has a lot of merit. They let people find what fits, and then they can buy as little or as much as they want, in any color, fabric, or print combination that they want online...and they have eliminated the reverse logistics and reduced inventory working capital by several orders of magnitude. And sure, they can't be everyone's target market. Nobody has ever succeeded at that in fashion. But what they do have for a target market is extremely powerful: Professional men. And they happen to go back for more every time because they love the product.
- ucaetano 11y ago
  "But what they do have for a target market is extremely powerful: Fiercely loyal professional men who go back for more every time because they love the product." Wow, so it's even worse than I thought: not even their target market scales!
  - saosebastiao 11y ago
    I flash edited to clarify...but you are wrong about it not scaling. Gucci, a brand out of range for 99.99% of the world population, has a brand value estimated at $12B. Their total market value is well beyond that. Professional men, by contrast, are an incredibly large market segment, and with margins that aren't much different from the high overhead high end retailers.

bonesinger 11y ago

I agree, I think its weird. I went into one of their stores and the employee was working with someone else. Since I can't buy anything, I just walked out. I did end up buying their clothes on their website and the cost was pretty good after coupons. The clothes themselves are awesome and fit me perfectly. I also like their website, especially the filter they have, it's very responsive.

jraines 11y ago

I walked into their store in Manhattan (unaware it was this model) because I'd heard of them, and knew from their ads that their pitch is about how great the fit is. The salesperson was busy with a customer who was confused (and a bit rudely angry) that he couldn't just buy something now. He walked out, and so did I. To continue this sample of one anecdata: my shopping usually goes: "hey, there's a store that sells pants -> I could use some pants -> let's get this over with"

DanBC 11y ago
And also: -> I better buy two or three pairs if I like them, because in 4 months they're going to stop selling these and they are a comfy fit.
AndrewKemendo 11y ago
"hey, there's a store that sells pants -> I could use some pants -> let's get this over with" Interesting because mine is "I could use some pants -> where is a store that sells pants? -> let's get this over with" I wonder how different your or my experiences are compared to the population.
- jraines 11y ago
  Mine would be the same as yours except that I live in Manhattan and often walk around Midtown / Union Square where there are tons of clothing retailers.

saosebastiao 11y ago

It is a genius move. Their real estate leases and operations are surprisingly cheap when it comes to brick and mortar because the footprint is so small. And they have completely eliminated the most dangerous and costly aspect of B&M: inventory management. The more stores you have, the more fractured your inventory is. Every location adds incremental safety stock. Safety stock in fashion, where each color/size combo is a unique sku, tends to be at least an order of magnitude greater than the mean forecasted sales...much higher for the high end stores where an out of stock situation is a major hit to your brand image. Pure e-commerce fashion companies have a huge advantage in inventory management because they aggregate their inventory in a single warehouse instead of spreading it out amongst hundreds of retail stores. But they have struggled because of concerns about fit. People tend to fall into two categories when it comes to buying clothes online: 1) Buy it anyway, try it on, and return everything that doesn't fit, and 2) Don't buy at all. #1 is extremely costly because reverse logistics is extremely costly (personal experience is 3-10x more expensive than equivalent forward logistics). #2 is a no-revenue situation. Bonobos is doing something risky, sure...but it is novel and, in my opinion, has a lot of merit. They let people find what fits, and then they can buy as little or as much as they want, in any color, fabric, or print combination that they want online...and they have eliminated the reverse logistics and reduced inventory working capital by several orders of magnitude. And sure, they can't be everyone's target market. Nobody has ever succeeded at that in fashion. But what they do have for a target market is extremely powerful: Professional men. And they happen to go back for more every time because they love the product.

ucaetano 11y ago
"But what they do have for a target market is extremely powerful: Fiercely loyal professional men who go back for more every time because they love the product." Wow, so it's even worse than I thought: not even their target market scales!
- saosebastiao 11y ago
  I flash edited to clarify...but you are wrong about it not scaling. Gucci, a brand out of range for 99.99% of the world population, has a brand value estimated at $12B. Their total market value is well beyond that. Professional men, by contrast, are an incredibly large market segment, and with margins that aren't much different from the high overhead high end retailers.