The Retail Evolution
Posted: May 17, 2016
It’s no secret that while brick-and-mortar stalwarts like Macy’s, Kohl’s, JC Penney and Gap are closing stores, retailers that started life online are going offline to Main Street.
Bonobos (menswear), Warby Parker (eyeglass frames), Athleta and Fabletics (trendy sportswear), and Birchbox (cosmetics) have all opened physical stores.
Co-CEO of Warby Parker Neil Blumenthal says, “Our stores offer customers an additional way to experience our brand. We don’t think of the future as purely online or brick and mortar, but rather a new blend of the two.”
Eric C. Rothman, portfolio manager for CenterSquare Investment Management, says this blending of the two worlds is all “part of the evolution of retail.”
One of the more inventive “retro” retail endeavors to add brick and mortar to its online cachet is a company called Chubbies. After experimenting with pop-up shops, Chubbies has gone physical and opened its flagship store in San Francisco, with more expected. The reason it’s noteworthy is that it illustrates an apparel idea that’s familiar, yet repackaged in an updated experience that’s making waves in retail.
About four years ago, four Stanford grads had enough of the corporate world and decided to embark on an “everything-old-is-new-again” idea. After wearing retro short-shorts they found in thrift stores or acquired through their fathers’ and uncles’ hand-me-downs, “people started noticing that we were wearing some really cool shorts,” notes Chubbies co-founder Tom Montgomery.
Wanting to run their own company and have fun at the same time, they test-marketed the idea, making several pairs of shorts. They brought them to a Fourth of July party at Lake Tahoe. They sold out that day—and Chubbies was born.
Chubbies launched its website in 2011, and from day one it was inundated with orders. “That's where we really understood that the product was fantastic in terms of the resonance that it had,” Montgomery says. “The shorts struck the same emotional chord with other people that it struck with us. It reminded us of our dads; it reminded us of the weekend.” And because of intense work-weeks of many young male professionals, Chubbies seeks to exploit the weekend and maximize it to the fullest.
Chubbies occupies a newly defined niche: “brotailers.” You may think from the numerous commercials on TV that billboard the term and the goofy frat-boy antics that something like this can’t last long. But apparently it’s lasted long enough for Chubbies to thrive and expand.
Unlike J.Crew or Jos. A. Bank, Chubbies maintains an anti-preppy attitude. Bloomberg Business defines the niche this way: “What sets apart brotailers in this ecosystem is that they’re more a mirror than an ideal. You don’t shop at Chubbies because you want to look like the guy in the photos; you shop there because you already do.” Its retro-inspired shorts have found a hit in the marketplace.
Market research firm IBISWorld determined that menswear has been the fastest growing category sold online. The Boutique@Oglivy surveyed adult men this past January and discovered that 53% defined their style as “basic bro” vs. “practical” or “professional.” While preppy is still popular, this segment is veering away from the Brooks Brothers look to a more “irreverent” approach to fashion.
Shying away from traditional advertising, Chubbies tells stories with their customers who offer volumes of user-generated content showing Chubbies’ lifestyle.
Ranging from $50 to $65 a pair, the shorts aren’t cheap, but customers are happy to pay, in part because the shorts are 100% American-made—from where the cotton is milled (North and South Carolina) to the manufacturing. You might think this puts Chubbies at a competitive disadvantage to companies with less expensive overseas manufacturing. But Montgomery says making shorts in the U.S. is consistent with the Chubbies’ brand.
The end message to retailers: Promoting product differentiation and appealing to a unique demographic and lifestyle may hold a key to success. Taking a cue from Chubbies’ dynamic marketing techniques and native manufacturing might also encourage new and old retailers and manufacturers alike to rethink archaic strategies in favor of this retail evolution.TAGS: retail, retail trends, retailers,