This is exactly the problem they faced when they started as a solely online platform. The following anecdote from Co-Founder Fan Li is especially telling in this regard and gives some insight to why they expanded into a joint bricks and mortar / e-commerce operation:
‘Guys really understood the value proposition right away. They totally got it. “My shirts never fit. I have to run right now, but where’s your store?” We said no store yet, you can buy online. Their expression changed from excitement to confusion.’
I think their growth is more closely linked to the number of customer measurements they have stored in their database – not necessarily the number of bricks and mortar stores they have. For example, they could use pop-up stores and on-site measurements programs to expand this database in a way that is less capital intensive than setting up permanent pattern rooms. These also give Blank Label a great way to test a market before expanding to understand if it is worth the capital investment for a permanent patter room.
Their current expansion plans are to open up to six stores on the East Coast over the next 1-2 years and they have used the pop-up store model to test markets like Chicago.
They’re focused on expanding the business. At this stage, their growth is focused on geographic expansion of the menswear business – specifically on the East Coast and to a lesser extent in the Mid West. It looks like they ran a Kickstarter campaign in 2012 to expand into women’s clothing but they don’t currently offer women’s products.
I have no doubt that their Chinese manufacturing facilities and tailors have the capabilities to produce women’s clothing and this would be a very logical point of expansion. If you went in today, you may be able to order a shirt, however I would imagine that there would be different measurement specification points for men’s vs women’s shirts and I am not sure that their interface and communication system with their manufacturer would have the ability to deal with that at this stage (in an efficient way). I do not imagine that this would be an intensive addition when they look to expand.
From a business perspective, I think it is a logical area to grow. I am not sure the market opportunity is as big as for menswear, but I’m sure it is meaningful. The last point I would make is that they would obviously be catering to a different market, so would have to reflect these in an appropriate marketing strategy.
Sounds delicious. Do you think their enlightened hospitality priorities could come under pressure now that they’re public – is there a risk that investors start to creep up the pecking order? Thinking especially over the longer term when organic expansions opportunities may become more limited, when the current guys at the top turnover or if they get vocal investors buying in and exerting pressure.
Do you think that JetBlue has used customer loyalty programs (i.e. frequent flyer, credit cards) as effectively as other airlines? Is this something they could use to better overcome some of the pressures they are starting to face?