What is Everlane doing to capture millennials?

Founded in 2010, Everlane follows in the footsteps of e-commerce sites like Warby Parker and Bonobos by selling wardrobe staples like T-shirts, cardigans, pants, and loafers mostly online. An outside firm estimated Everlane’s sales at $35 million for 2015, up nearly 200% from 2013.

Michael Preysman, founder and CEO of Everlane, swore for years that his online clothing company would never go into physical retail. But this week, Everlane announced it is opening two brick-and-mortar stores in New York and San Francisco to bring new customers into the fold and connect with existing fans.

At a time when shoppers are fleeing mall chains like J. Crew, Gap, and Abercrombie & Fitch, the direct-to-consumer fashion label Everlane is thriving. So what one of the most innovative companies in fashion is doing differently during the retail apocalypse.

Much like app developers who post frequent software updates, Everlane is constantly iterating on its products. This model is in stark contrast to how traditional fashion brands operate. Most retailers launch collections based on seasons, so when August rolls around, the stores fill with new sweaters and corduroys in the hope that shoppers scoop them up before Pumpkin Spice Lattés arrive.

This approach doesn’t reflect how customers shop. Most people don’t buy new wardrobes all at once, but rather search out items as they need them. To keep things fresh, Everlane releases small batches of new apparel continually throughout the year.

It gathers feedback from customer surveys, return shipments, and in-person “fit clinics” to make products better. In the past, Everlane has swapped the material in a pair of slim wool trousers to make them less itchy and adjusted a shoe sole so feet wouldn’t slip out as easily. The company’s New York City fashion designers create new looks. But in a whitewashed loft in San Francisco, designers, analysts, and marketers work together to refine the clothing.

Everlane did not end up in the tech capital of the world by chance. Preysman was born and raised in Sunnyvale, California, where Google has been on a property-buying spree. Growing up as the son of two software engineers during the Silicon Valley dot-com boom, Preysman had more exposure to technology than most kids his age.

He studied computer engineering and economics at Carnegie Mellon. He landed a job at a New York private-equity firm and studied the retail industry as part of the gig, which fed into his love of design and branding. But he was most excited about building things. It didn’t take a degree in fashion merchandising to understand that what people paid for clothes did not match what they cost to make. He figured the internet had the solution.

Preysman said he realized “the markups were all over the map and quite extravagant,” sometimes as high as seven times as much as what an item cost to make. “Knowing the internet and knowing how businesses have been able to go more direct [to consumer] and give customers better value that way, it felt like there was this opportunity to do the same here,” he said.

After taking a gap year to learn the market, Preysman left New York for his hometown to start a business that would sell clothes directly to the consumer at a fraction of the cost of trendy retailers. It would offer styles you might find at J. Crew, Banana Republic, or Gap – at Old Navy prices.

In 2011, Everlane launched with an affordable T-shirt. The startup worked directly with factories and sold online only, cutting out the middlemen and costs of running stores. The company does not advertise – instead, an in-house production team posts beautifully produced photos and videos on social media and the Everlane website. Millennial shoppers quickly have quickly come on board. The basic cotton tee, which cost $15 in 2011 and a dollar more today, sold tens of thousands a month by 2015. It remains a best-seller.

Over the years, the company built out an entire wardrobe for professional women – and added some men’s apparel – with simple basics. A company representative for Everlane declined to share revenue, but its sales reportedly increased by 200% between 2013 and 2014.

Everlane now stocks 485 items. The brand’s style is industrial, with minimalist designs meeting natural textures. Part of what makes Everlane unique is the way it uses storytelling to promote clothing. When Everlane launches a new product, it tells shoppers through its website and its design how the item will add value to their lives. This is not unlike the approach at tech companies like Apple, where rather than explaining the technology behind products, executives talk about how customers can use a new smartwatch or iPhone.

Doing so is necessary, according to Everlane’s head of creative, Alexandra Spunt, because retailers can no longer count on shoppers to experience the product in stores first. When the wide-leg crop pant — priced at $68 — came out earlier this year, it got a landing page on the Everlane website and an email marketing campaign. Four smartly dressed women with different body types (though all admittedly small) were photographed wearing the waist-nipping, leg-lengthening pants while smiling and leaning on one another. “Whether you wear them with heels or sneakers – these pants make everyone walk a little taller,” the website said. They promised confidence, comfort, and a universally flattering fit.

Everlane sold readers on the story behind the pants. They sold out within two days, and a wait list to buy the trousers has 13,000 people to date, according to the company. Part of the story of each product includes where the item was made. Shoppers can click on a product description to see photos and videos of the factories that manufacture clothes for Everlane and read about the working conditions there.

Everlane also includes a breakdown of the costs associated with manufacturing a product and what the markup is. It’s part of the company’s promise of “radical transparency. An infographic beneath every product description illustrates the cost to produce the item, accounting for materials, labor, a tax on imported goods, and transportation. It shows the true manufacturing cost, the retail price, and the estimated cost elsewhere, side by side.

Customers have used this information to call out Everlane for pricing they found unfair in the past. For example, the company lowered the price of a women’s sweater that was similar to a men’s one when female shoppers pointed out the women’s one cost more.

At Everlane, with no risk comes no reward.

Check out my related post:

Why don’t millennials invest?

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7 thoughts on “What is Everlane doing to capture millennials?

  1. A good word to sum up what Everlane brings to the table is transparency. People now want to know the source of their product, the story of their product, and an idea of how much of the price tag is really going to the product – and how much is wasted on middlemen, like you say. Transparency goes a long way for us Millennials.

    Liked by 3 people

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