Suiting up for success
How do two University students with no interest in fashion, no degree and no business connections build a multi-million dollar custom menswear line? Similar to any other great business idea, this one stemmed from a need identified by its founders. As a woman, I have never needed to purchase a suit, but I have heard from multiple sources that it is an expensive and tiring process. Kyle Vucko and Heikal Gani (Co-Founders of Indochino) faced this same dilemma when they needed to purchase a suit for a conference. On a student’s budget, they were presented few suits that fit their needs. Frustrated by the process, the two University students began looking into creating their own made-to-measure e-commerce suit business. Years later they have created an omni-channel business dominating the mens retail space. Imagine your first job out of College paying out millions of dollars? These two entrepreneurs made it a reality.
“I didn’t set out to build an E-commerce company, I set out to help guys get dressed.”*
Kevin and Heikal’s mission was genuine from the start. When they first generated the idea of creating made-to-measure mens suits they had no idea how successful the business venture was about to become. They simply went into business out of personal frustration and their desire to help other men who would undoubtably face their same challenges. When a business is started in such a genuine way and this vision is maintained through growth, customers are able to see the authenticity of a brand. Indochino has been authentic and transparent from day one and that accounts for a large amount of their success. This customer-centric business has always focused on the customers experience first, that is what undoubtedly helped the business survive in its fiercely competitive marketplace.
In the early days the two young entrepreneurs utilized the mentorship program at the University of Victoria to receive advice on growing a business. They built valuable connections before proposing their idea. Finally in 2007, the founders of Indochino dropped out of school and ran their Vancouver based company full-time. The connections they built through the University helped them fund their early venture and ultimately lifted them off the ground.
“My goal is to sell a million made-to-measure suits a year by 2020, that would put our revenue, back of the napkin, at over half a billion dollars.”**
There has been a growing trend for e-commerce businesses to also enter the bricks and mortar world. Of course remaining strictly online reduces costs and allows for customers to receive products at a much lower price tag, there is something to be said for having a tangible storefront. Indochino made this realization and began setting up temporary storefronts across North America. These storefronts received such success that the new CEO Drew Green has said, “Our online business is seven times higher in markets where we have showrooms.” As some customers are weary of measuring themselves at home then submitting their measurements to Indochino, the storefronts allow men to be measured by trained professionals. These storefronts contain no inventory but do have all the materials customers can choose from on display. Although Indochino is not the first e-commerce website to take their shot in the real world they are one of the most aggressive. Their new CEO Drew Green hopes to establish 150 showrooms by 2020!
Green explains that Indochino will continue using data to drive all decisions. So far it seems the opening of physical storefronts has resulted in tremendous success for this company. As for keeping prices down? Green explains that the storefronts will now contain a much larger purpose than simply marketing. They will be an extension of the online experience. Customers across the world will have the opportunity to enter an Indochino store and confidentially make a purchase decision. Often when shopping online there is a significant drop-off rate when a customer is asked to enter their credit card information. Having a storefront will reduce this drop off rate and build customer confidence in the brand. Staying true to their model, no inventory will be held in the stores which will significantly reduce costs.
All things considered, having a physical storefront is still a very expensive feat. Green explains that Indochino stores are placed in less expensive areas to help mitigate costs. Rather than placing storefronts in the downtown core they are placed slightly off the beaten path. This was done because it is assumed customers are willing to travel extra distances to ensure their measurements are correct. As this is a large purchase decision customers are prepared to put the time and energy in to ensure they make the right choice. Customers book an appointment to be measured in store and have the opportunity to view fabrics as well. The use of appointments helps Indochino ensure a steady flow of customers each day.
Although making the transition from e-commerce to bricks and mortar can be difficult, Indochino has created a strong argument for why the change needs to be made. With menswear growing at twice the speed of women’s wear in the marketplace it is clear Indochino has hit on a clear need.
“Most things you encounter in business have happened to others before and being able to capitalize on these experiences is key.”*
A lot has happened since Indochino was founded in 2007. The company is now under new management but it is still maintaining it original success. The company has remained true to the original vision of helping men look great at a low cost. Many changes have been made, but the core of the business has remained untouched. Although Kyle Vucko admits to making mistakes he says it is less important to dwell on these mistakes and rather look towards the marketplace for advice. In business you will rarely find a problem that is unique to your company alone. Chances are if you have faced an inventory problem, someone else has faced the same one. Instead of making those mistakes and feeling on your own look towards the marketplace for advice. We think a great place to start is looking towards Indochino!
Things to consider:
If you are an entrepreneur here are some things to consider:
- Look towards other industries for advice, many mistakes can be avoided by doing so
- Think a storefront is too expensive? There are ways to significantly minimize costs
- Always remain true to your initial vision. Even through growth remember those customers who brought you your original success
Here is how you can learn more about Indochino: