When Indochino launched in 2007, the company wasn’t out to create a new template for the entire retail sector, just a better product with better prices and a better buying experience.
But four months into a pandemic that has turned the traditional retail business model inside out, the company looks like it could teach all of retailing a new paradigm — a showroom model with little inventory and appointment-only viewing.
“We don’t require dozens of people at our store to have an operating four-wall showroom,” CEO Drew Green told Karen Webster in a recent conversation. “Eighty to 90 percent of our traffic is appointment-based traffic that comes through our websites.”
The Three Secrets To Indochino’s Success
Green said that as a bespoke maker of custom men’s clothing, Indochino had three big advantages baked into its business model going into the pandemic.
The first is the simple fact that its stores basically don’t carry inventory. Second, stores are appointment-based, which means Indochino can control the flow of traffic into its physical locations — a big advantage in the post-pandemic world.
And lastly, the chain offers something Green said he thinks will be critical to all of retail in the pandemic era: a better-curated, personalized experience for consumers. The pandemic pushed Indochino to add virtual shopping guides to its online channel, something the chain’s data revealed customers really wanted.
“Some people just don't want to [pick clothes] themselves,” Green said. “They want help, and that's OK. And so, we took several weeks to build and launch visual style guides.”
He said interest in such help has declined a bit since the chain’s physical stores began reopening, “but virtual style guides remain a nice part of our business. I don’t see a reason that we would not continue to offer that tri-channel business to our customers because, ultimately, it gives them more ways to transact how they want to.”
Why Everyone Isn’t Doing It
Given the resilience that Indochino’s model has shown, Webster asked why more apparel makers haven’t sought to emulate it.
Green said he thinks it’s tough to build an omnicommerce system that can give consumers a customized experience in both the physical and virtual worlds. Getting the technology, processes and staff training into place has been hard
He added that if any small part goes wrong, the system doesn’t work. For instance, if scheduling software fails, the company’s business model “collapses into chaos immediately,” Green said.
But despite such challenges, he said he believes all retailers must learn to serve consumers across a variety of channels and manage physical locations so that they’re a critical part of an operation but not responsible for a majority of revenue.
After all, the pandemic has hit retail perhaps harder than any other economic sector, and an awful lot of players probably won’t make it, Green said.
“I don't wish that on any of our competitors,” he said. “Frankly, I want to see everyone be able to do well.”
As for Indochino, while Green isn’t inclined to offer much in the way of long-range forecasts, he said he’s confident the chain will do well when the world gets back to something closer to normal.
Yes, many consumers might work from home more often — and perhaps some will do so in their pajama bottoms. But men will never entirely lose the need for suits and high-quality outerwear.
Weddings will continue to exist, as will other special occasions like big job interviews and hot dates. All of those will require either a suit or snappy outerwear, which means Indochino should still have plenty of customers — and a bright future — whenever the pandemic ends.
“If we can be strong and continue to be there for customers in the right way, I think there's a massive opportunity for us,” Green said. “But for right now, I think it's important just to focus on the near term and stay present.”