AM Schoonbeek's Profile
Great to read about an all American company that so does well in such a competitive industry!
After reading your discussion, I had the following 3 questions:
• LWD’s innovation process reminds me of Threadless, whose community members vote on the first ‘decision’ point in the innovation funnel. LWD’s Facebook friends seem to provide a similar role, though there is no voting involved – and it seems that any ‘like’ will yield production of the garment (whether it’s number 1 or 1,000). I am curious to understand how LWD goes about prototypes generating very little interest, and therefore do not lend themselves to batching? Is there a minimum threshold of likes – and how are consumers informed of this? To understand how likely this scenario would be, I’d be interested to know how many SKUs LWD presents at any given point – and what’s the average length of presentation online?
• Another distinction between Threadless and LWD is the sourcing of designs; the former uses its community for this and the latter performs this in-house. Given the unique following that LWD has created (1.2 million Facebook friends and 25,000 Instagram followers sounds impressive) – I can imagine there is great potential for LWD to involve consumers more actively in the prototype design process. So instead of iterating with the consumers based on a LWD prototype, let them ideate on how the prototype should look like in the first place. For instance, could there be a Facebook forum where LWD followers can discuss garments they would really like to see produced?
• Since a majority of sales is achieved through Facebook LDW faces constraints that it would not have faced if it had only sold through its own website. A key limitation in my view is the ability to price flexibly, i.e. explore and exploit different prices in different geographies/ age groups / educational background. I would be very interested in understanding how much value capture LDW is leaving on the table through its inability of flexible pricing – especially given the wealth of data they have about the background of their consumers through the social media channels
Great to read about ASOS through the lens of a satisfied customer – with the holiday parties around the corner I have definitely noticed a steady increase in ASOS packages at HBS, so you’re not alone.
I have some follow-up questions after reading your discussion:
• It seems like ASOS has cut its innovation efforts to simply ‘copying’ the designs the celebs are wearing. As a frequent visitor of tabloid websites like the Daily Mail, I was wondering how ASOS figures out which celebs are ‘fashionably hot’ in the eyes of teenagers/ young professionals (for instance, J-WOWW versus Gigi Hadid) from the vast number of pictures/celebs that are shared? For instance, is there any way they are tracking the number of Instagram followers a specific celeb has?
• I agree, that a key alignment between value proposition and operation model for me (as an online shopper) is the free returns policy. I would be curious to know what return rates are, and how much more value ASOS could create if it would instead of free shipping reduce the price of clothes and add a shipping fee. In other words, is it indeed more beneficial from price-savvy consumers to have free shipping – or is is simply a perception they have?
• A key selling point to the style-savvy consumer is the ability to wear what celebs are wearing at a reasonable price. I would argue that not only price and style matters here, but also timing (if Gigi is wearing a dress at Coachella, you would want to be able to wear that during the summer festival season too). Therefore, I am curious to understand the time it takes ASOS to go from copying a design, to posting a garment for sale on their website – and if they have any specific operational strategy for this.
• I liked your argument of ASOS marketplace serving as a marketing tool to potential consumers. I am curious, however, to know how the participating designers feel about collaborating with a company that at its core generates it profit by essentially stealing designs from the designing community without rewarding them for their intellectual property.