I deeply believe big brands overcharge for base commodities and rely on brand value to demand a high price.
In a sense, I can see where they are coming from.
If there’s demand at a set price point, why lower it?
An argument can be made that they need to sell at a high price to account for a lot of expenses (staff, endorsements, marketing, distribution, etc.)
It’s a valid point.
At the same time, it comes at the expense of us consumers.
Big brands have to strive for large quarterly profits for shareholders.
They’re no longer releasing products because they are good or necessary, but because they need to cut a nice bonus check for the CEO, Wall Street Analysts, Shareholders, etc.
Harsh, but true.
Look at Lululelomon
if you go to page 344 chapter 26 of the book by the founder Chip Wilson, in a paraphrase he mentioned they were headed downwards because they wanted to squeeze every last drop of profit from the customer to please wall st’s analysts —
“We were increasing prices just because we could”
and this meant putting less money into quality control, less money into developing new material,
and this opened the door for new brands to enter the market and give a better product at a better price.
Aloyoga and Athleta and a few others came in and undercut lululemon in terms of price and arguably quality.
That’s one of the traps of being a big brand. You absolutely need to do anything and everything to achieve quarterly profits for shareholders.
This strategy leaves an open market for digitally native brands that can focus on a particular opportunity, source from the manufacturer, cut out all middlemen, go direct to the consumer, and market to a particular niche online. Examples are now numerous (Warby, Casper, Leesa, Away Travel etc.)
Oh how Capitalism and globalization can be beautiful at times.
A brand that’s a role model in the direct to consumer crowdfunding space is Peak Design. They design and manufacture high end camera gear and launch via crowdfunding platforms so that they only answer to us.
The ultimate beneficiary is the customer, and this is how it should be.
Enter Cirkel Brand.
Polyester and Cotton are necessary components of a garment, but there’s a huge opportunity to introduce technical and advanced fibers and fabrics — the very fibers and fabrics big brands avoid because they seemingly have too high of a demand and a healthy enough margin as things currently are. (Alternatives to synthetic polyester and water resource draining cotton will be discussed in a later post)
I want to source the premium technical fabrics that are often overlooked.
I see this opportunity as the current arbitrage of our time.
If a Nike or Lulu introduced premium fabric, they would have to charge a premium price for more reasons than just overhead. If they introduced technical fabrics at the same price as a cotton and polyester dominant jacket, then intuitively as customers we’ll know most of their flagship products are overpriced.
I can talk all day about this, but it does not matter because it’s the emotional primitive brain that makes purchasing decisions, and then the neocortex comes in and justifies it — a topic I’ll save for a later time. The point is, they overcharge for base commodities, and when they introduce premium fabrics, they do retail for a high amount.
Back to the opportunity for Cirkel.
We absolutely have a tremendous opportunity to either source or develop high end technical fabrics,
design them into multi functional apparel specifically built for the modern commuter and traveler that’s adaptable and multi functional,
invest in premium hardware,
cut and sew it at competitive prices using bluesign approved factories with fair trade practices,
and deliver the finished product directly to global travelers and modern commuters all over the world via Shopify, Kickstarter, Indiegogo, and via brand ambassador partnerships with influencers that share our vision.
I mentioned I won’t discuss sustainability in depth here, but a huge advantage of a digitally native brand is the ability to set up the supply chain right the first time.
We have a great opportunity to use Bluesign approved mills and factories, and push towards a circular and transparent economy that tracks the complete supply chain. Brands like Patagonia should not be the exception, but the norm.
One part of our mission is to prove that sustainability, innovation, and design by no means conflict with one another,
and that by taking a sustainable approach, the finished product is far superior to anything produced by “fast fashion”.
The other part of our mission is to create the most comfortable, functional and technically advanced apparel for the commuter and traveler & bring them to market at well below traditional market price.
A mission I’m prepared to go to hell and back to achieve.
“I have nothing to offer but blood, toil, tears and sweat” — Churchill