There’s so much choice available that customers can pick and choose who they buy from and where, when, and how it happens. They want to discover, research, evaluate, and purchase on their preferred channel. Give them that option, and they’re more likely to choose you. That’s the whole point behind the multi-channel approach.
The hardest part about building a brand today is managing your own approach to leadership and agility.
That at least, is the view of Andy Dunn, founder and executive chairman of fashion online retailer, Bonobos. Dunn was speaking at the Online Retailer and Ecommerce Expo on the growth of the brand over the past eight years, and lessons learnt along the way around brand resilience in the hyperspeed retail era.
“Today, building a great brand is about you,” he claimed. “The hardest part is actually managing the relationship with ourselves [as leaders]. There were probably a dozen times I didn’t think we were going to make it, and more than that when I didn’t think I was going to make it.”
Bonobos launched as an online-only retail brand in 2007 selling highly tailored trousers for men. The company sold $2 million worth of goods in the first year to 5000 customers, and by year three, had a 43 per cent customer repeat rate. But while the model was working, by year four, the company needed additional venture capital funding to scale to a more sustainable business.
After a series of rejections in a VC market that was more interested in software startups than pure-play ecommerce companies and didn’t understand the retail market, the world started to shift. Bonobos secured $18.5m in its first institutional financing round from Excel and Lightspeed, and hasn’t looked back.
But that doesn’t mean the company has stuck to its original product line or its pure-play roots. In recent years, Bonobos’ business model has evolved firstly from online pants into mens’ shirts and other apparel, and now womenswear through label, AYR.
The retailer has also developed 19 physical locations for trying on its clothes with one-to-one service, called Guideshops, after a successful trial of fitting rooms in its New York headquarters.
“What we learnt was that it’s not a great customer experience if you can’t try it on,” Dunn said. “We did $1 million out of our lobby from customers trying the items on, then importantly, walking out without the product.
“Ecommerce has separated the moment of transaction with the moment of experiencing goods.” The proof is in the pudding, he said. “The stores now generate money and enabled us to take our marketing costs down from 25 per cent to less than 10 per cent,” Dunn commented. “In May, we made money, which is revolution for a pure-play ecommerce brand, largely due to the evolution of our model.”
Bonobos also distributes products through Nordstrom’s retail stores, and secure $16.4m in investment from the department store in 2012.
“We got there with the conviction of what is important but also open-mindedness about the future being different to what we imagined,” Dunn said. “It requires an open mind and a relentless willingness to test and experiment.
“Having an agile brand is about making yourself a sustainably agile person.”
To achieve this as a leader, Dunn cited a checklist of attributes, the first being self-awareness.
“Self-awareness is the only reliably predictive trait of leaders,” he said. “This is a willingness to own your strengths and not be apologetic about that, but to also bring in vulnerability in your conversations, particularly with yourself.”
Courage and judgment are also required if leaders are to make decisions that are different to what others may encourage them to make, or aren’t immediately popular, Dunn said.
“Being a great entrepreneur requires you to internalise the blame, not externalising it as we often do,” he claimed.
As an example, Dunn explained the difficult decision his first business partner and friend, Brian Spaly, made to leave the company in 2009 after the pair ran into problems agreeing on the right way forward as a business.
“Courage is required in conflict to tell people the truth. We all have a hard time as humans looking others in the eye and telling them the truth... but it’s absolutely required,” he said. “Dignity is also required.”
At the same time, positive, relentless energy is vital as a leader, as is tenacity and intellectual honesty to admit when things are changing and it’s time to shift gears.
“We are making new decisions in light of data and I must be willing to separate myself from my historical decisions,” Dunn said. “I don’t have to be the person and decision I was attached to yesterday.
“The fact you made a decision once doesn’t mean you need to continue.”
Dunn also advised other leaders to spend 80 per cent of their time “in other people’s heads”, and just 20 per cent in their own.
“My three-word summary of all this is ‘never give up’,” he added. “This is about the way you apply resilience in everything you encounter personally and professionally.”
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