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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 the

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.
  - deckard1 11y ago
    Yeah, but Bonobos isn't Gucci. And I wouldn't put them near the same category as other high end brands. The people that buy Bonobos are more likely to be people that, if driving somewhere to try something on, want to bring something home that day. Can't buy direct at Bonobos? J-Crew or Banana Republic are next door. Literally, in many cases.
    - saosebastiao 11y ago
      > The people that buy Bonobos are more likely to be people that, if driving somewhere to try something on, want to bring something home that day. Can't buy direct at Bonobos? J-Crew or Banana Republic are next door. Literally, in many cases. I think that is extremely debatable. I'm squarely in Bonobos' target market and it is common for me to buy something that I like and have it sit in my closet for a day or two before I wear it the first time. I don't know anybody that treats their new clothes like they do a new computer or phone...where they absolutely have to start using it right away. If I'm ever in a situation where I can't wait a day or two but need an article of clothing right now? H&M it is. No way I would pay Bonobos prices with my back against a wall like that. And more importantly, the lack of having something in stock to buy at that very moment is what enables them to have a wider array of potential fits, colors, and other options while also being in stock with a high degree of probability of being at your door within a day or two. Those fits and options are part of the loyalty that Bonobos has. Banana Republic might have some pants in stock...but do they have exactly my size, the color I want, the fabric I want, and the fit that I want? Far less likely IMO. I've spent way too much time rifling through stacks of pants trying to find my size only to destroy a cleanly presented stack of pants and discover that they have it but not in the right color. I would much rather invest 30 minutes of my time in a Bonobos retail fitting room, and then never spend another minute in a retail store again.
      - deckard1 11y ago
        How does Bonobos get around the fact that you're just getting a similar style, and not tailored pants? The biggest issue with buying mass produced clothing online, is that two pairs of the identical style have wildly different fits and shrinkage behavior. For example, Levis. I have to try on about 10 pairs of 501s before I find one that fits. After the first wash, all bets are off. I think Bonobos is going to have the issue. Except, now you have a customer that is angry because they spent an afternoon finding pants that fit, only to have those "same" pants shipped and not fit. Unless Bonobos steps up tailoring on demand (think Black Lapel), I think they are going to have enormous trouble satisfying the customer.

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.
- deckard1 11y ago
  Yeah, but Bonobos isn't Gucci. And I wouldn't put them near the same category as other high end brands. The people that buy Bonobos are more likely to be people that, if driving somewhere to try something on, want to bring something home that day. Can't buy direct at Bonobos? J-Crew or Banana Republic are next door. Literally, in many cases.
  - saosebastiao 11y ago
    > The people that buy Bonobos are more likely to be people that, if driving somewhere to try something on, want to bring something home that day. Can't buy direct at Bonobos? J-Crew or Banana Republic are next door. Literally, in many cases. I think that is extremely debatable. I'm squarely in Bonobos' target market and it is common for me to buy something that I like and have it sit in my closet for a day or two before I wear it the first time. I don't know anybody that treats their new clothes like they do a new computer or phone...where they absolutely have to start using it right away. If I'm ever in a situation where I can't wait a day or two but need an article of clothing right now? H&M it is. No way I would pay Bonobos prices with my back against a wall like that. And more importantly, the lack of having something in stock to buy at that very moment is what enables them to have a wider array of potential fits, colors, and other options while also being in stock with a high degree of probability of being at your door within a day or two. Those fits and options are part of the loyalty that Bonobos has. Banana Republic might have some pants in stock...but do they have exactly my size, the color I want, the fabric I want, and the fit that I want? Far less likely IMO. I've spent way too much time rifling through stacks of pants trying to find my size only to destroy a cleanly presented stack of pants and discover that they have it but not in the right color. I would much rather invest 30 minutes of my time in a Bonobos retail fitting room, and then never spend another minute in a retail store again.
    - deckard1 11y ago
      How does Bonobos get around the fact that you're just getting a similar style, and not tailored pants? The biggest issue with buying mass produced clothing online, is that two pairs of the identical style have wildly different fits and shrinkage behavior. For example, Levis. I have to try on about 10 pairs of 501s before I find one that fits. After the first wash, all bets are off. I think Bonobos is going to have the issue. Except, now you have a customer that is angry because they spent an afternoon finding pants that fit, only to have those "same" pants shipped and not fit. Unless Bonobos steps up tailoring on demand (think Black Lapel), I think they are going to have enormous trouble satisfying the customer.