How Digitally Native Brands Can Grow With Showrooms

Digitally native brands are trying on a new brick-and-mortar model for size: Instead of opening the doors to cavernous stores, they are opting to create smaller-format locations. When Indochino made the transition from a digital-only to an omnichannel retailer, for example, the Canadian fashion brand opted to open smaller stores called showrooms, where customers can shop for made-to-order formalwear.

Customers benefit as they receive a personalized experience: They can create a one-of-a-kind garment or wardrobe, from the type of fabric lining to the stitching. In turn, brands such as Indochino can benefit by not having to stock many items. That setup can help brands when they open a location in a new city, for example.

“We aren’t burdened by inventory risk,” Indochino Chief Executive Officer Drew Green told PYMNTS.com in an interview. “We can allow a showroom to grow both organically through our existing customers in that area as well as [through] new customer acquisition and attraction.”

With Indochino, the idea is to change the normal process for buying formalwear: Consumers are used to walking into a store to buy a suit, blazer, shirt or pants – and they might never interact with a staff person. Furthermore, the items they select may not fit perfectly, so customers may have to visit a tailor. Alternatively, customers may buy garments and then return their items because they don’t fit. Overall, Green said the typical formalwear buying process is not the most engaging experience – and that is what Indochino sought to change.

The Showroom Experience

Before entering an Indochino showroom, customers can make an appointment. But those shoppers who don’t want to commit to a time can visit a store as a walk-in customer. Either way, customers encounter staff members called style guides. These representatives walk shoppers through the process of creating their own custom garments by helping them pick their fabric, take measurements and select lining as well as stitching – in addition to dozens of other customizations, such as personal monograms.

The products are then made overseas, and can be produced, quality-checked and shipped in three weeks or less. Green said that 22 percent of garments ship in under a week, 80 percent ship within two weeks and 100 percent of garments arrive in three weeks. Within the store, customers also have access to a selection of accessories.

In addition, Green is seeing that his showrooms have an incredible payback window: On average, they are paying back within a year or less. By comparison, he said retailers typically have a two- to three-year payback window. In addition, since the showrooms are appointment-based, Green said Indochino is not beholden to as much walk-in traffic like other retailers. As a result, the company doesn’t have to rely on the location bringing in people. “We drive traffic into our showrooms,” Green said. More broadly, the showrooms are a destination. Green noted that they bring in a variety of customers, from grooms and groomsmen to millennials, boomers, Gen Xers and super boomers.

The Omnichannel Advantage

Brands such as Indochino, which started online, have a bit of advantage when it comes to showrooms: When these companies open new locations, they already have established customers in the cities and regions they are entering. As a result, when Indochino opens a showroom, it already has hundreds of appointments from that built-in audience. Even so, the company has a toolkit of various tactics and approaches for new store openings: Strategies such as grand opening parties and celebrity appearances are all part of the mix. Already, the company has about 30 showrooms across North America.

In all, the company is looking to launch 20 to 25 showrooms in 2019 in the U.S., and Green said they are considering international expansion in 2019 as well. Beyond geographical expansion, Indochino is looking to expand its product line. In August, for example, it is planning to launch khakis, and will launch outerwear in September. Overall, Green sees tremendous opportunity in offering different types of clothing, from casual apparel to formalwear, as Indochino rolls out new showrooms in the U.S.