At Indochino, A Retail Model Built to Order

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20120304indichino__logoWhen the founders of Indochino, a startup that sells custom suits online, began to drum up strategies to enter brick-and-mortar retail, they found some surprising fat in the model: the store itself. What they came up with in response is an ephemeral alternative to offline selling that draws on some of the flexibility of ecommerce while retaining the experience of a physical presence.

For the past two years, the company has moved from city to city, opening pop-stores as part of its Traveling Tailor program. The stores remain open for a few weeks, offering shoppers a chance to meet with a stylist, compare fabrics and designs, and then order a suit, which is delivered four weeks later. When the run is over, the company packs up the store into large containers — everything from Fixtures to the iPads that run its point-of-sale system — and moves it all to the next city.

Street Fight recently caught up with Kyle Vucko, chief executive at Indochino, to talk about the company’s “pop-up” approach to physical retail, the increasingly important role of Facebook in its local marketing strategy, and why offline retail isn’t going anywhere quite yet.

Talk a bit about the formation of Indochino, and how that has shaped the way the company has builds its brick-and-mortar retail experience?
A few years ago when we conceived the business, we backed into this idea of selling custom clothing via the web because we felt that we could get clothing that not only fits well, but that we could also afford, by cutting out the middle man. We started as an ecommerce company, but that wasn’t necessarily what we set out to build. Our vision was always around making it easy for guys to get dressed, and we’ve kind of just followed that, where our customers and our guys have taken us.

What we found a few years ago now was that while we were growing at the time, there was a group of guys that wanted to see and feel fabrics. They actually just wanted to connect in person. They wanted to get help kind of getting styled by a person, as opposed to online or on the phone. So we came up with a concept we call our traveling tailor, in which, we come to a small retail location — we bring in fixtures and a team — and guys can either pre-book an appointment or walk in.

When you look at your business, what problem can offline retail solve that ecommerce cannot?
What’s a little different [about Indochino] is that all of our clothing is customized. Our shoppers don’t get the instant gratification of walking out of a store with a product because the product has to be made. That’s very different from a traditional retail setting. Customization is new for a lot of folks.

So we needed to get folks educated on what the new paradigm looks like, and the retail setting’s really positive for that because you can physically walk people through samples and examples. Today, you can pick the color of your phone and your car, but clothing is actually one place where very little customization has been done.

For retailers, one of the advantages of selling online is an exponential audience. Talk a bit about the differences in driving traffic to an ecommerce site versus driving people to a pop-up store.
What’s been interesting is that a lot of stuff that works as an online business actually works very well for driving business into an offline setting as well. For instance, Facebook has been extremely big for us. Facebook drives a lot of our customers in our online business, but offline it drives a meaningful share — like, a lion’s share of our foot traffic.

But we even do our remnant print buy when we’re in physical locations, and that also seems to work, which we would never dream of using to drive the online business. In general, it’s been interesting to see the way in which people respond differently to local events than online businesses.

Let’s quickly step back for a moment, and talk about the competitive matrix. What advantage might an online-first seller like Indochino — and one that sells entirely custom clothing — have over a legacy retailer?
What’s great about a customization model is that we have a ton of flexibility since there’s no physical inventory in the store. You can work in a much smaller form-factor location. You can utilize space in a very different way. You can also update product very quickly. Sure, the store is less flexible than an ecommerce model. But with traditional apparel, where you have to manage huge amounts of stock, you run into a lot of issues that we simply do not face.

In many ways, we’ve been liberated from the legacy technology — particularly around point-of-sale —that weigh down some of the bigger retailers In today’s world. I think it’s best to actually build everything off of a single system that’s fully integrated.

And from a customer experience perspective I actually think it’s far superior because customers don’t think in terms of channels and businesses and online versus offline. They think, at least in our business, about getting dressed. And all we’re trying to facilitate is doing that as easy as humanly possible.

A lot of folks have predicted the complete death of brick-and-mortar retail. As an online-first company, what role do you see physical exchange playing in your business over the next decade?
We’re not entirely sure where we’re going to go with retail, but we know it’s becoming a bigger part of our business, and it’s continuing to evolve. What started as a four-day event, as our first events in Vancouver, we’ve now done north of 20 events, and our last event in Toronto was six weeks. And now we’ve got this permanent location in Vancouver. So, it’s interesting just to kind of see where it evolves. And also just that “I still very much want that physical touchpoint in some way, shape, or form” — or at least a certain group of guys, which is pretty large.

What we’ve come to realize is that for a certain group of people physical retail is needed — and I don’t think it’s going to go away anytime soon. But the question to ask is how offline retail integrates with online. There’s the buzzword “omnichannel,” but I think ultimately it’s “How do you make it easy for a consumer to buy?” In order to facilitate a great experience, you need to be wherever your customer wants to be. And typically, that involves an offline touchpoint. I think more and more people are realizing that — now it’s about figuring out how they do it most effectively.

Steven Jacobs is Street Fight’s deputy editor.

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