Customization is the next front for luxury retailers

While working in the financial services industry in 2012, Nikunj Marvania realized he had a serious issue — he couldn’t find the right shoes to wear to work.

All the quality dress shoes were too expensive, too stuffy or took too long to alter. During the course of his quest to find the perfect pair of loafers, the thought dawned on him to design his own, and thus men’s shoe wear company Awl & Sundry was born.

Marvania is one of a number of custom retailers disrupting the luxury market, luring consumers with cheaper options and the ability to design their own products. As the proliferation of fast fashion and e-commerce creates an increasingly detached shopping landscape, these companies are working to rebuild relationships with consumers by adding a touch of personalization to the digital space. The challenge comes in building name recognition and expanding variety amid a mass customization market.

Creating a personalized experience
David Hamilton, co-owner of Hamilton Shirts, which has designed tailor-made men’s dress shirts since 1883, said custom companies hold a level of accountability to their customers that you don’t see in the traditional retail space.

“There’s this sense of stewardship. You want to make sure the customer is making the right choices, and you want to inform them to make the right choices,” Hamilton said.

Likewise, Marvania said Awl & Sundry is “bringing back old-school craftsmanship” and responding to a shift in men’s wear from off-the-rack styles to customizable pieces.

Increased accessibility and lower price points become a selling point by minimizing the middle men, in this case wholesalers, distributors, retailers, salespeople and the costs associated from typical brick-and-mortar style stores.

However, there are limitations to online custom companies, according to Sucharita Mulpuru-Kodali, analyst at Forrester, namely a lack of variety in the products offered.

“The biggest challenge with the space is that this is all mass customization,” Mulpuru-Kodali said. “The companies generally are limited by the few items they can customize. They’re like pizza restaurants with lots of variants around a few core items. To scale, they’ll need to offer much more variety and choice.”

In response to production confines, custom retailers are leveraging consumer interactions. While all sales are conducted online, Awl & Sundry has a small showroom in New York for consumers to try on their custom designs, similar to the Bonobos model. This level of one-to-one interaction, Marvania said, helps create a consumer experience that transcends the typical department store or designer brand.

“That’s the beauty of custom, once you have the product, fit and style, [the consumer’s] not going to go to JCPenney, Hugo Boss or Armani to buy shoes,” Marvani said.

Consumers as designers
Beyond a return to tradition, custom wear gives the consumer a sense of ownership and artistic jurisdiction over their apparel, an integral element of building truly unique personal style.

Aubrie Pagano, founder of the women’s online clothing boutique Bow & Drape, refers to this as the “IKEA effect,” which entails involving the consumer in the process from start to finish to foster a sense of collaboration and accomplishment.

Much like the Swedish furniture juggernaut, Pagano has been successful in involving her clientele in designing customized clothing and accessories, ranging from sweatshirts to baseball caps.

“People are looking to be part of the process,” Pagano said. “For millennials, expression is such a core value of what we espouse and what we purchase.”

Jodie Fox, co-founder of custom women’s shoe company Shoes of Prey, echoed Pagano, and said that giving the consumer the ability to design their own products helps enhance custom brands and gives them an edge over standard retailers.

“Customization is a really important thing now, really having that ownership and connection to what [consumers] want,” Fox said. “When people say they like my shoes, they’re really complementing my personal taste, and that’s ultimately much more satisfying.”

Gaining brand recognition
As custom brands continue to expand, some are faced with inevitable growing pains from entering an online retail space already saturated with well-known designers.

“I think that a lot of brands that have been around for a long time have to think about how they’re going to exist in a digital environment,” said Hamilton, whose company was founded by his father before the dawn of the Internet age. “Especially custom, which is so special because there’s this interaction with somebody who’s guiding you through all these decisions.

For new companies, the biggest challenge is gaining awareness, particularly as marketing grows increasingly expensive, Mulpuru-Kodali said. She noted that companies like Shoes of Prey have done an exemplary job of partnering with “bigger players” like Nordstrom and dabbling in innovative video campaigns.

Despite the buzz surrounding custom e-commerce, building momentum online and establishing name recognition isn’t always seamless. For custom retailers, social media campaigns have been key to leveraging their presence and showcasing their unique, one-of-a-kind designs.

“Instagram has been such a great an easy platform for custom because you essentially have limitless content,” Pagano said. “When you can customize, you can react really quickly to trending events and create something new every day to help people.”

Bow & Drape has 31,500 followers on Instagram and features regular posts of their latest items. Though the company does not have a brick-and-mortar store, it’s working to expand its in-person experience through in-store partnerships, most recently at Lord & Taylor. Participants were able to design and print products on the spot within 20-30 minutes.

However, with Instagram’s pending algorithm-based photo streaming model imminently altering the user experience, custom retail owners are starting to rethink their social media strategies. “Instagram’s new algorithm feed puts an emphasis on quality of content, not quantity of content,” Kyle Wong, CEO of visual marketing platform Pixlee, told Digiday in March. “Brands will have to prioritize strategies that maximize their relevance and engagement rates rather than pure following and reach.”

Marvania said he is still learning what is most effective from the existing model and “will make the necessary tweaks” in response to the algorithm implementation. He noted that influencers have played an integral role to growing Awl & Sundry’s follower base, and he plans to continue to leverage this network without delving into paid posts.

Fox, on the other hand, said Shoes of Prey is open to experimentation and plans to “dabble in sponsored posts as a trial for certain campaigns and valuate based on performance.”

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