Bonobos: Making Fit Happen
Between 2010 and 2015, men’s clothing was the fastest growing e-commerce category, outpacing electronics, groceries, cosmetics, and health products [1]. Founded in 2007 to eliminate “khaki diaper butt”, Bonobos [2] has been at the forefront of the shift to the internet in the men’s e-commerce apparel industry. With nearly $100 million in annual sales and $128 million raised in venture capital funding, Bonobos is now the largest apparel brand ever built on the web in the United States [3]. I believe that the company is an example of a company whose business and operating models are well aligned.
Bonobos is on a mission to be the most loved clothing company of all time, and creates value by offering its customers the best customer experience possible and amazing products with a focus on fit. In an industry where men prefer targeted shopping experiences and don’t window shop as often, Bonobos offers their consumers three convenient ways to shop for their clothing: online via their website, in Nordstrom stores across the U.S., and in one of their 20 proprietary showrooms (“guideshops”). The company offers free shipping and returns on all orders, as well as a 365-day return policy.
Customer Experience
Bonobos provides customers with an amazing shopping experience in their guideshops by delivering personalized appointments to help customers find the products that are right for them. When an order is placed in a guideshop, the customer walks out empty-handed and their products are shipped to them overnight. If a web customer needs help, the company’s customer service team is always ready with an average wait time of 3 rings – several times faster than the industry average! [4] The company’s customer service employees, known as ninjas, are co-located with the rest of the company in their Flatiron District headquarters in New York City. The ninjas are empowered to delight customers with every interaction, and help Bonobos keep a competitive advantage by ensuring that product feedback is relayed to the product teams in real time. The short feedback loop allows the design and merchandising teams to see trends more quickly and to react more proactively to customer demands.
Bonobos also has a competitive advantage relative to its peers in the apparel industry because of its internal software engineering team. By not having to rely on external contractors to build and operate its web operations, Bonobos has the ability to innovate and create a shopping experience that is seamless between its web and guideshop operations.
Product Focus
Due to the company selling direct to consumer via their website and showrooms, Bonobos is able to offer an incredible amount of size variations that wouldn’t be possible in a traditional physical retail environment. For example, they offer 3-5 silhouette profiles on the majority of the shirt and pant offerings, as well as a large size variation on their core products. For a pair of khaki chinos Bonobos offers approximately 175 different size and fit combinations, whereas J. Crew only offers 24 on a similar product. [5] This focus on fit differentiates Bonobos because it allows them to reach a broader customer base and to give customers the best fit possible. When the consumer has more choice, the consumer wins!
In summary, I believe that Bonobos’ business and operating models are aligned based on its ability to deliver an amazing customer experience and phenomenal products via its operating model of selling clothes direct to consumer on their website, in their guideshops, and in Nordstrom locations.
Sources
[1] http://qz.com/355433/mens-clothing-is-outpacing-cameras-computers-and-beer-in-growth-of-online-sales
[2] http://bonobos.com
[3] http://www.businessinsider.com/how-bonobos-is-maturing-into-a-major-brand-2015-8
[4] http://www.supportindustry.com/researchinsight_AHT.htm
[5] https://www.jcrew.com/mens_category/pants_1/chino/PRDOVR~19488/19488.jsp
[6] https://bonobos.com/products/washed-chinos?color=the%20khakis&pant-fit=boot&pant-waist=40
Interesting read and cool company. I know they’ve experienced a lot of recent success but I wonder if they will be able to remain competitive in an e commerce market that is seems to be moving towards custom made clothing? Instead of carrying so many size and fit combinations, does it make sense to follow the crowd and go bespoke in the coming years?
Likewise, I think that this is a really interesting model. I would also echo Dylan’s concern about remaining competitive in the e-commerce world. It seems that Bonobos falls between the retail shop and e-commerce models where the Goldilocks middle ground may not be the best place to be. On the one hand, customers need to actually need to visit the guideshops to be sized appropriately and potentially pick out designs (thus operating similarly to a retail shop). However, in contrast to a retail shop, customers are unable to walk home with the product right away. I think Bonobos probably finds many creative ways of providing value to their consumers, but how clear is this value proposition to the consumer and what percent of target consumers actually benefit from this value to justify a purchasing process that is not quite as straightforward as either that of a retail store or e-commerce platform?
Great to see that Jean-Claude Biver’s interests lie outside of watch industry…
Very interesting article. Many business nowadays place heavy emphasis on product and CX. I see the speed and convenience of delivery & returns as two key CX components in commerce. Big advances in logistics (deliveries are becoming faster and more reliable as 3PLS and e-commerce (Amazon) / tech (Google, Uber) players continue to innovate in this space) are enabling both small and established brands to offer their products online and thus expand their customer reach. How do you see Bonobos addressing the challenges of competition and ensuring for CX to remain one of its key value propsoitions? Do you see it pivoting the business model in another direction as customers begin to take high CX quality for granted?
I enjoyed your post on Bonobos and have been familiar with the brand for awhile as my boyfriend is a loyal customer. I echo Dylan’s fear, however, that as the e-commerce bespoke market grows, Bonobos’ value proposition to its male customers may decline. I am also concerned that Bonobos’ business model with its focus on fit and incredible amount of size variations is only a competitive advantage that has translated to the male customer. I know that Bonobos launched a womenswear line last year called AYR and would be curious how their operating model and/or business model have had to adapt to support this new customer.