Bonobos, an Ecommerce Darling, Finds an Edge in Brick-and-Mortar

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330x270_2011-04-18-163926BonobosLogoLast year, Bonobos, the upstart apparel brand that exploded by selling pants to  young professionals online, did something that seemed to go against its digital roots: it opened a physical store. However, the company is just the latest in a series of ecommerce firms to delve into brick-and-mortar, using the draw of a physical store to compete in an increasingly competitive ecommerce environment.

Today, the company, whose founder Andy Dunn had been an admittedly puritanical supporter of the internet-only model, operates eight Guide Shops across the country with more to come this year. The Guide Shops function like any retail store with one major exception: nothing in the store is for sale. Instead, customers place an order with a store associate, and the product is delivered days later like a normal ecommerce purchase.

Street Fight recently caught up with Erin Ersenkal, VP of Guide Shops and planning at Bonobos, to discuss the thinking behind the move into brick-and-mortar retail, the benefit of a showroom approach, and the value of a physical presence in building a new brand.

Bonobos’ founder Andy Dunn was a staunch supporter of the internet-only model when the company launched in 2007. So what was the thinking behind the move into brick-and-mortar?
We launched in 2007 to solve two problems: guys needed better-fitting clothes and we wanted to provide an easier way to shop. We started off in bottoms (pants, shorts etc.), which is typically a very difficult category to build brand loyalty because there’s such a difficulty to find fit, and gained a lot of credibility, and have since expanded to a lot of different product classes.

One of our big strategies was to provide great customer service, and in doing that we developed a super-close dialogue with our customers . As we grew the brand, we ended up having a lot of customers asking to try things on. So we invited them into our headquarters to try things on. The requests piled up, so we decided to set up two dressing rooms in the office to make it a little more formalized. That’s how the Guide Shop came about.

One of the striking aspects of shopping at a Guide Shop is that nothing is for sale. There’s no inventory to take home. From the retailer’s perspective, what advantages does this “showroom” model afford?
When you think about a typical retail store, it’s usually a big space with a huge amount of inventory packed in, so a lot of the retailer’s focus ends up being on inventory management. We said: “why complicate things?” We’ve got customers coming in, they’re shopping, and most importantly, they’re happy to not have to walk away with a bag.

From an operations perspective, there’s a number of benefits of not stocking inventory — namely, the size of the store. We don’t need this big space in the back for inventory management in order to stock all of the inventory to get sold. The other thing we can do is offer a much wider assortment to our customers than a retail store with a similar footprint could do if they were stocking inventory. Consider our core wash jeans, which have about 3,000 different combinations of sizes and colors. There’s no way we could sell that variety without a massive location.

Early on, the Guide Shops were obviously a response to a customer need. Talk a bit about the role which in-person selling will play in the future of Bonobos’ business.
We see [the Guide Shops] as a huge opportunity. For us, it’s about helping customers find clothes that work best for them. Some people might be comfortable shopping online exclusively, but others want a more physical interaction. We want to meet the customer’s needs. This does that.

For instance, we really like the idea of having a style adviser within a store that can be your personal stylist. That’s something that we cannot really execute online. That’s where the personal interaction plays a key part within the Guide Shop experience.

Over the past two years, the company has expanded beyond its product line, jumping into women’s fashion as well. What role do you the Guide Shops play in expanding the brand, both in terms of bringing in new customers as well as introducing new products to existing ones.
[The Guide Shops] certainly are a great vehicle for us to acquire new customers. Maybe they’ve heard about the brand and then walk in. But there are others where we build a relationship where they come back into the store after the first shop. Its really a great opportunity to build a longstanding relationship.

But these shops also really help to build a number of different brands. One example is the new suits and dress shirt lines which we launched, and which tend to have a little higher price points. These products sell better in store than they do online. There’s automatically a bigger investment for the customer, and so having a physical space to help them try a suit or shirt on is really helping us growth that part of the business.

The physical “store,” as it were, has been on the run for the past decade. Where do you see physical markets playing into the apparel and wider retail landscape as digital platforms mature over the next decade?
Bonobos isn’t alone, here. We’ve already seen a number of other online retailers moving offline. Whether it’s Warby Parker or Hyperline, ecommerce is becoming much more physical.

Sure, a store is a great way for customers to come in and try things on. But more importantly, it allows the customer to interact with the brand in a more material environment. When we think about how a company can express its brand in a meaningful and holistic way, it’s a combination of the digital experience and the physical one. At the end of the day, it’s about brand building. And i think the physical space continues to play a huge role in that process.

Steven Jacobs is Street Fight’s deputy editor.