The Future of Online Clothing Retailer Everlane
In 2011, Michael Preysman founded Everlane, a San Francisco-based online-only clothing retailer that has since raised over $18 million from investors and seen upwards of $50 million in revenue last fiscal year. Unhappy with the fact that even the most basic clothing pieces were being marked up several times their production cost by traditional retailers, Preysman wanted to build a retailer that would bypass any middlemen — thus avoiding unnecessary markups — and sell directly to online consumers. Everlane was created with this exact mission in mind, starting off by selling minimalistic basic t-shirts at prices significantly lower than those of brick-and-mortar retailers.
From the start, Preysman worked to ensure that Everlane would be a direct-to-consumer brand. In particular, he utilized the concept of “radical transparency” in order to establish a relationship of trust between Everlane and its consumers. As a result, the retailer’s website discloses exactly where each product was manufactured, how much each product cost to make, and how its prices compare to those of other retailers. This is almost unheard of, particularly with big-name companies like Apple and Sephora that sell to the masses; Preysman, however, reasons: “[P]eople are mature enough. People understand that you have to make a profit, so why don’t we just tell them?” Everlane is also unconventional in that it has no physical stores, almost no advertising, no discounts, and no seasonal collections — instead, it releases pieces in individual succession, a practice driven by the philosophy that the best products are carefully designed and crafted one at a time.
More than four years after founding Everlane, Preysman still prioritizes the maintenance of a direct relationship between the retailer and its consumers, one adapted to thrive in — and even be aided by — the new digital age and growing world of e-commerce. Rather than depend on traditional channels of advertisement, for example, he opts to primarily utilize social media as a means of spreading the word about his brand and keeping existing customers hooked; as he states, “You have to give [people] new things weekly, monthly, whatever it is. You have to re-engage the customer all the time.”
As far as the future is concerned, Preysman is highly optimistic about the path that Everlane is on — and for good reason. Last fall, the company launched a new higher-end line, and also branched out from t-shirts into footwear and bottoms; in addition, market reports currently suggest that the company is seeking new investments “north of $250 million.” As the company continues to expand, it may follow in the footsteps of eCommerce plays such as Bonobos, Warby Parker, Nasty Gal or Birchbox who chose to further engage with retail customers by opening up retail storefronts. Although there is a wealth of data to be collected through A/B testing websites, brick-and-mortar stores may help cement retailers’ relationships with customers in an ever-increasingly crowded eCommerce landscape.
