Thank you for writing this report on a unique business model. I personally prefer Bonobos, which was also founded by Brian Spaly, but that’s me. While TC has been able to avoid having a physical retail presence, they built a ‘clubhouse’ in the Palace Hotel in New York City where they take styling appointments. At Hublot, we often see the ‘bullwhip’ effect, and I know that it is no stranger to the apparel business. Since TC success is built, in part, on excess inventory in the apparel industry, do you think that there is a chance that during a lack of excess their margin structure will break down and they will have to purchase much more expensive or full price inventory? Also, do you think their partnership with Nordstrom will hurt their alignment of business and operating models? Only time can tell. I hope they bring this to Switzerland soon! -JCB
Wow! This is fascinating to me! 6 figures as a general manager of a grocery store?! Where do I sign up???
On a more serious note, I don’t think Trader Joe’s gets enough credit for its innovative business model. They were selling private label grocery products before it was the norm and this was a big risk. In hindsight a no-brainer. We now see private label products in nearly all grocery stores and you can hardly find a branded cereal in a Whole Foods. As the competition begins to copy their methods, it will be interesting if they will remain at the front of the pack or if they will be crowded out of the market. My hunch is that the consumer loves their community engagement projects and realizes that the authentic brand and appeal matter a lot to them. We saw this at Hublot too! -JCB
This business model is very interesting because it builds on the current trend of personalization that we are seeing across all industries. In fact, I see this all of the time at Tag Heuer and Hublot! The only thing I worry about when you are getting a custom product via the internet is that if the company has a high return rate, it might be extremely hard for them to move those units since they are made especially for someone. In fact, if they see this and they change their return policies, then it may make it difficult for consumers to try it. Nevertheless I love this idea and will see if I can try it out soon!! -JCB