By: Brock Staskawicz
The fashion industry has nearly always been dominated by womenswear — classic images of designers fussing over dresses or celebrity-status models defined fashion.
The business model was simple: men wore suits and ties, and women were muses around which art was to be created. The profit was in and the focus was on women. Yet Mr. Porter, an online luxury clothing retailer founded in 2011, successfully challenged this notion, innovating around the long-standing model to generate great success and inspire change for menswear.
A business model defines a company’s offering and outlines why it should be a success. While there are a multitude of frameworks and perspectives on how to construct a business model, they all center around the target customer, channel, profit model, and needed resources/competencies. Mr. Porter successfully overturned the traditional model in all four aspects.
Who is Mr. Porter’s target shopper? In 2016, the average user was 35 years old, earning an average household income of approximately $200,000 and spending an average of nearly $27,000 annually on fashion. While the idea of a man spending over 13% of his gross household income on clothing each year might sound unlikely, Mr. Porter became a force in the industry by targeting exactly this customer segment, offering a level of service and variety previously limited to women’s fashion.
Mr. Porter upended traditional channels, relying on e-commerce to drive sales. Reinforcing this choice were changes in typical product organization and the limited mirroring of brick and mortar features.
Rapid growth in e-commerce has led brick and mortar stores to scramble for e-commerce channels. Mr. Porter, however, began and exists solely online, abandoning traditional retail practices. In 2016, five years since its launch, Mr. Porter grew 94%, demonstrating the success of a well-designed online retailer. Major retail chains, moving towards omnichannel, must fight to match the growth of Mr. Porter in its online and mobile channels.
In department stores, floors are organized by brand or clothing item. But that’s not enough to enable selecting the perfect outfit. Mr. Porter groups complementary products, helping customers get their essential jobs done. Click on a pair of pants, and the site will recommend shoes, jackets, shirts, and even jewelry accessories to complete the outfit. Because Mr. Porter operates online, these simple groupings only need associated pictures at the bottom of the product page and hyperlinks. Here, the opportunity for attached sales abounds, instead of being hindered by traditional brick and mortar layout.
While pure e-commerce often means the loss of certain brick and mortar benefits, such as the showcasing of new products in windows to entice customers, Mr. Porter publishes new products multiple times a week in the “What’s New” section. It also folds newly discovered brands into their offering, which, as an e-commerce business, they can update much more quickly. These brands can be found on a special page, “New Designers,” attracting the trendsetter.
Periodically, Mr. Porter has old-fashioned brick and mortar pop-ups, exciting customers and raising visibility. During the launch of their Kingsman line, for example, it opened a storefront in London, generating large crowds of customers waiting to buy their Kingsman suit on Saville Row.
Historically, men’s fashion operated on a simple profit model: men invest in suits for work and a few pairs of dress shoes. Mr. Porter challenged this assumption. Diverse shopping tastes and desires would not, in fact, be limited to women if men were given similar opportunities in choice. To this point, Mr. Porter reported that within its first year, Lanvin sneakers were more popular than dress shoes. Looking on the street today, think of all the men in “dress” sneakers that cost several hundred dollars or more. Mr. Porter does not limit its sales to purely professional clothes, and they ask a high price for even casual wear items, expanding their profit capability beyond traditional high-end retail stores, which were known best for their luxury ties and suits. Now luxury and variety extend to sweatpants and white T-shirts without sacrificing attention to suits and ties. It is all fair game.
Resources & Competencies
For a luxury retailer, key competencies cannot simply be adequately knowledgeable sales people, quick shipping, or even personal shopping. Mr. Porter offers not only an exceptional selection of products, but also a range of services (e.g., expert advice, premium packaging, etc.) to make the shopping experience more enjoyable. Simple things, but largely missing in men’s stores before Mr. Porter.
A key strength of Mr. Porter’s offering, its talent network, likely wouldn’t be associated with a department store. However, Mr. Porter maintains an editorial platform that allows an international network of professional designers, stylists, culture/taste makers, and even celebrities to create content, which can range from style recommendations to lifestyle guides. Simply put, Mr. Porter adopted the structural network of consultants to supplement its full-time employees, breaking out of the traditional brick and mortar clothing store.
Mr. Porter’s editorial section engages customers, providing advice not only on what to wear on Valentine’s Day and what to get a date as a gift, but even on the most romantic dinner spots around the world. Before, a customer wouldn’t be seen asking for date-spot advice at a department store sales counter. GQ might have been a better resource. Now, Mr. Porter wears both hats — trusted retailer and advisor.
Mr. Porter ignored the norms of the men’s fashion industry, demonstrating the potential of the market as well as the power of e-commerce in this industry. Mr. Porter targeted a segment willing to spend on menswear and offered them a collection ranging from luxury athletic gear to fine suiting. Coupled with its editorial content and immersive customer experience, Mr. Porter successfully innovated the business model of fashion retailers, inspiring change.
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