In 2006, roommates Andy Dunn and Brian Spaly (now CEO and co-founder of Trunk Club) set out to solve the problem of ill-fitting men’s pants, aka the “Khahi Diaper Butt”. The pair started selling brightly-colored, tailor-made pants from the back of Spaly’s car, and made nearly $40,000 in their first six weeks. They quickly turned their hobby into a company, launching Bonobos exclusively online in 2007. During its first year in business, Bonobos grew 23 percent each month, generating $1.5 million in annual revenue by 2008. Eight years later, Bonobos is the largest apparel brand in America launched online, approaching $100 million in annual revenue. [1,2,3]
Bonobos’ success is due, in part, to the effective marriage of its business and operating models, offering great clothing and great service through vertically integrated etail.
The Business Model
Bonobos is built around quality customer service. The company takes pride in understanding its customer, male millenials who find the shopping experience a hassle, and what he wants. It recognizes that male buying behavior is different from female buying behavior:
Men seek fit and style, but want to minimize time spent shopping. As such, the three pillars of the Bonobos brand are: fit, fun, and service. They offer perfectly fitting pants that customers can purchase online and have delivered in days. 
The Operating Model
Bonobos delivers on their promise of a unique, hassle-free experience in several ways:
Personalized service through engagement. Customer service agents, known affectionately as ninjas, are specially selected for their communication skills and empathy. They serve as brand ambassadors; they wear the brand and are passionate about the mission and the product. Ninjas are available through the website, via twitter, on the phone, or in-person. The Bonobos website, the heart and soul of this online retailer, is fun and engaging, reflecting their position as a friendly and casual company. On its website, Bonobos offers its “Ask a Ninja” service via phone or email through which customers may ask questions. Guideshops, addressed in more detail below, offer customers more intimate, in-person service. Similarly, personal twitter accounts allow ninjas to engage with their millenial customers directly. Whether interacting with customers on the phone, via social media, or in-person, these smart, friendly, empathetic employees are given the freedom to solve resolve issues as they see fit, creating a more natural shopping experience for the customer.
Vertical integration and the introduction of Guideshops. Bonobos manufactures, brands, and distributes its own products. Manufacturing within the US and eliminating stores from the supply chain has translated into high-quality products at significantly lower prices.  Recognizing that many customers still want to be able to touch the product, Bonobos offers Guideshops, small, service-driven “experiential stores” offer one-on-one, appointment-only service. Because these stores are merely a place to try on Bonobos products (the purchasing is still done online), the stores don’t carry any inventory. This enables them to operate in smaller areas (700 to 1,200 square feet compared to 2,500) with fewer employees minimizing the cost of the store. Guideshops provide the additional benefit of increased marketing. The high touch, highly personalized stores are a good customer acquisition tool and encourage first-time customers to spend more. 
Variety allows product personalization. The company’s portfolio includes pants, dress shirts, suits, denim, and more. Their signature chinos come in a variety of colors, cuts, styles, fabrics, and sizes. This large selection allows for a unique level of personalization unmatched in other brands.
Commitment to quality and improvement. Bonobos stands behind its products, which are handmade in the US. Shipping is free, and it offers a 365-day return policy (90 days for a full refund and 365 for store credit). Furthermore, Bonobos is constantly seeking feedback from customers in order to improve its products and services. It uses Facebook, Twitter, and the Blog, not only to promote products, but to request feedback, poll customers, and for its engaging “Question of the Day”.
Alignment and what’s next?
Bonobos’ vertical integration and commitment to quality and personalization enable it to offer the superior service that sets it apart from other retailers. Its success is due to this alignment. However, despite this success, Bonobos is still very much in the startup phase. Recent analytics show a healthy base of loyal customers, but also reflect a lack of growth in site visits since the beginning of the year. Dunn attributes this to a cut in online marketing spend and a recent focus on building Guideshops. He expects to grow from 19 Guideshops to 30 by the end of 2016. It remains to be seen whether Dunn can accomplish his goal of turning Bonobos into the number one menswear retailer in the country. 
 Entrepreneur.com: http://www.entrepreneur.com/article/227010
 Business Insider: http://www.businessinsider.com/how-bonobos-is-maturing-into-a-major-brand-2015-8
 Lightspeed Venture Partners: http://lsvp.com/2010/12/16/why-lightspeed-invested-in-bonobos/
 Bonobos: https://bonobos.com/