Direct-to-consumer brands have been sprouting up at a swift clip across every category. And in some sectors, these digitally native brands are challenging the incumbents.
At one point, department stores owned 23 percent of the fashion market, according to Thredup’s 2018 Resale Report. That was in 2007, when digitally native brands were just a sliver of the market. By 2027, department stores will be down to 10 percent—and direct-to-consumer brands are projected to command 11 percent.
Men’s wear, in particular, seems to have seen more than its share of upstart labels, promising better fits, more reasonable pricing and higher quality fabrications. Among them, UNTUCKit, Indochino and Proper Cloth are making a play for guys’ closets.
But why is men’s wear the new battleground for fashion and tech savants today?
“Men love the ability to shop incognito,” said consumer behavior expert Marshal Cohen, chief industry advisor at The NPD Group. “Online shopping is convenient; you have the endless aisle. You can shop during off hours. But the real reason is: men have grown accustom to doing all their shopping online.”
From the brands’ perspective, going after men’s first is simply easier thanks in part to the uniformity of men’s sizes. “The No. 1 reason we decided to do men’s wear is that the sizing and norms in men’s wear lends itself better to the digital space,” said Bjorn Bengtsson, chief merchandising officer for UNTUCKit, a direct-to-consumer brand, which also offers some women’s wear. “The fit of a shirt is the fit of a shirt whether it’s regular, slim or oversized. Most men understand what those different fits mean. They can be explained easily on a website. Women have so many different fits and cuts that it’s harder to properly explain fit online.”
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Still, men’s wear has been a little late to the direct-to-consumer party where women’s brands such as ModCloth, Girlfriend Collective and Lively, to name just a few, are already well represented. “This is less to do with the way men shop and more about under-explored opportunities,” said Katie Smith, retail analysis and insights director at Edited, adding you have to consider who’s backing these brands. “We will likely see an uptick in men’s direct-to-consumer because opportunities are under-explored, and the male-dominated venture capital world now realizes the potential of direct-to-consumer brands.”
Going straight to the consumer is seen by these brands as a way to provide customers with a good and convenient retail experience combined with maximum value. “Selling through wholesale accounts forces a brand to raise their prices or cheapen their product and it also makes it harder for the brand to control the customer experience,” said Seph Skerritt, CEO and founder of Proper Cloth, which focuses on made-to-order shirts and suits. “By selling direct to our customers we can have a closer relationship with them, ensure they have a stellar experience beginning to end, and deliver them a higher quality product for a better value in the process.”
Direct to consumer is not without its challenges, however. “The brand has to do more things,” Skerritt said. That includes being masters at omnichannel retail as well as customer service. “It’s certainly challenging to do all these things well, especially when you’re just a small brand,” he added.
Though they may start online, many of these digital brands find they have to put down physical roots to grow. For instance, Ministry of Supply has six locations, and Allbirds is on its way to eight stores by 2019.
“In reality, 85 percent of sales still happen in stores so you have to adopt some type of retail presence,” said Drew Green, CEO of Indochino, which focuses on made-to-order men’s suits. “Three years ago we became a native brand. We just opened our 31st showroom, and we’ll have a total of 36 by the end of the year. We’re growing, but we’re doing it sustainably and profitably. The biggest challenge is to know how to do it differently. You need to create a compelling experience for the locations.”
“Every company will eventually have stores to support their e-commerce,” Bengtsson said. “Whenever we open a store in a particular area, we see increased traffic on the site. They work in unison.”
As the direct-to-consumer men’s wear space continues to evolve over the next five years, the winners will be those that have a compelling story to tell and stay true to their brand and their customers. “I don’t think there’s any difference to any category,” Bengtsson said. “The survivors will be those that have a strong product, a strong story and a very well-developed digital marketing strategy.”