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Interesting company! They seem to have really exploited an unmet need and had a lot of success in scaling. As we move into a digital age, I wonder if their competitive advantages are still as strong. Their main value proposition seems to be real estate but digital files don’t carry the same physical space concerns. It will be interesting to see how they evolve and the world of paper/digital records evolves. Great post!

On December 10, 2015, AFE commented on Zara: a Retailing Force to Be Reckoned With :

Zara is pure genius. If they choose to stay within their current product offering, I’m confident they will continue to win. However, over time most brands strive to create their own brand aesthetic and often evolve towards higher price points. I worry both pursuits would remove many of Zara’s competitive advantages. For the first concern, they would have to plan for a much more robust design and product development phase, instead of copying others’ designs straight from the runway. This would inevitably length their lead time and remove their first-to-market advantage. For the price concern, the current production cycle does not allow time for expert sewing and detailing – thus justifying the lower price points. To evolve into a higher priced brand, they would have to dedicate much more time to the production cycle. If Zara can stay disciplined and avoid these 2 prominent temptations, I believe their success will be continued for quite some time.

On December 10, 2015, AFE commented on Realizing Growth Through the Potential of e-Commerce :

Love Bonobos – such a great concept. They target the needs of their customer very well. I wonder how much upside they are truly seeing from their Guideshops though. I believe their original inspiration was correct – that most men would prefer not to shop in brick & mortar, so I would be interested in seeing whether they are acquiring new customers in their guideshops or whether it only appeals to their most loyal customers. I’m also curious about how much they will expand the Guideshop model, and at what point does the capex outweigh the benefits? Great post!