It’s Short-O-Matic

Just over two years ago I posted about the potential of (and possible pitfalls associated with) launching an online design-your-own boardshorts operation (a la T-shirt phenomenon Threadless).

I was intrigued today when I stumbled upon a magazine mention of just such an entrepreneurial endeavour.  A mob out of California (now that shouldn’t surprise) called Shortomatic have been building up a portfolio of user- and guest designer-provided shorts through a pretty nifty website.

They have a number of similar elements to Threadless, although users cannot vote on prospective designs (instead the firm is the complete gatekeeper once artists submit).  There is a revenue stream for successful designers of up to $1000 per design ($5 a pair up to the maximum run of 200), and a feel-good pledge to donate a similar amount to a charity.

Contrary to our discussions/expectations, all the materials are sourced and stitched together in the US (rather than China), which does push the pricing a bit higher than I expected ($US a pair).

The operation also suffers from a pretty slow turnaround from order-to-shipping – 21 days or so – which would seem to narrow the potential customer base a little (to those explicitly seeking a rare item of clothing).  Again, you might argue this is a move away from Threadless’ model, as the t-shirt vendor’s speedy delivery (obviously built on an ability to print and warehouse shirts confident of sales from their much bigger customer base) allows for pretty spontaneous purchase, while Threadless’ policy of limited runs also encourages a “buy while you can” attitude.

Nevertheless, this looks like a pretty neat play at this considerably smaller and tougher fashion segment.  Again it does beg the question what other design-your-own, crowdsourced interfaces can we foresee (remembering we’ve also looked at custom bicycles on here too)?

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Why don’t more producers sell on-line?

Last week, Aussie surfwear giant Billabong announced they had entered the online retail arena via the acquisition of California-based boardsports website Swell.com.

Swell carries a wide range of brands beyond the Billabong stable. Billabong’s argues “the purchase will allow the company to take advantage of higher margins”. This is certainly logical, but it begs the question why more consumer durable producers have not gone down this path.

Firms like Billabong carry an enormous range of products that are distributed in low quantities to a very dispersed (and individually pretty inconsequential) set of bricks and mortar retailers (presumably via margin-eating middlemen wholesalers). Building a front-end in the online world could give firms a much more direct, more responsive and more lucrative customer interface. One can imagine Billabong offering exclusive and limit-edition ranges through the Swell store, and also tapping into more insightful customer preference data.

The challenge resides in the perceived channel conflict. Will other retailers feel threatened by the firm as a competitor (leading to them cutting back purchases)? While Billabong feel restricted in its pricing at Swell?

Likewise, there may be hostility from competitor brands. Will these firms still want to offer product to Swell, given Billabong will be earning a big chunk of their profits?

Billabong have done a smart thing in buying a firm with proven technology, a functioning back-end and known brand rather than going alone with such forward integration.

What are some other examples of such moves in the e-commerce space? And have they worked?

From Threadless to Shredless?

This post was prompted by one from Steve over at Startup Blog. He suggested that surfwear (in particular board shorts) might be a fertile product market for a Threadless-like innovation.

For those of you unfamiliar with Threadless, it is a crowd-sourcing community where designers load up prospective t-shirt designs which are voted upon by the public with the most popular then made available for sale through the same website. There is an excellent discussion of its growth and appeal here. The firm has been a huge success. Based on the numbers mentioned in that article, the site is selling upwards of 5000 t-shirts a day, at a margin of 33% or more.

 

The business model makes an enormous amount of sense. Each new design has a limited run and has already been tested with the likely consumers (i.e. they have voted for them). The basic inputs and production processes are very standardised (blank t-shirts, screenprinting) while the more costly input (designs) have been sourced out to providers who are prepared to do the hard work on spec (presumably because the exposure to consumers, or community, happens whether or not their designs are winners).

As with e-commerce generally, the firm saves big bucks by not needing/supporting a “bricks and mortar” retail and distribution network. It also avoid most marketing costs through that wonder of community-based websites – word of mouth.

Here’s a video explaining more about Threadless: Vodpod videos no longer available.

So turning to boardshorts, could a similar model work?

It certainly would need a lot of tweaking. I have no doubt that folks could come up some great and innovative designs and outperform the folks at Ripcurl, Billabong etc. But the issue is more to do with the business model.

Boardies are typically made from a microfibre polyester which is much more difficult to screenprint onto than cotton. Any design competition would probably need to be for the fabric print itself.

Now this is not impossible. There is at least one site that runs such a poll – Bonbonkakku. And Spoonflower offers custom printing. But, again, both are onto cotton, not polyester, and neither seem overly cost effective.

Running with new fabric designs as part of the model seems highly problematic, as this would necessitate large product runs, meaning the site would need to bare the risk of excess stock (and thus push up prices to protect against this risk). It would require a certain level of scale (in terms of consumer awareness, exposure) to be viable too. This contrasts with the much more scalable Threadless model.

Alternatively, the model could work around a palette of available fabrics and generating innovative patchwork style designs. This would require the firm to have access to good assembly (i.e. sewing) facilities. And the pool of prospective designers would presumably drop now (requiring a more specialised set of skills), and site would need to develop some capacity to communicate candidate designs effectively (3D rendering?, rotating images?). The big danger is that the market for these patchworked shorts might be much smaller too (surfers don’t usually want seams that rub).

As you can see, I am intrigued by the prospect of adapting the Threadless model, but I am not certain boardshorts are the right product. I am keen to hear your feedback. What have I missed in my discussion? How could this work more effectively?

Everybody’s going surfing… surfing R.U.S.S.I.A!

Aussie surfwear behemoth Billabong has announced it is opening stores in Moscow and St.Petersburg, Russia. This continues the expansion of this Australian firm into markets further and further away from the sun and surf of Queensland.

Russia is a BRIC and the 11th largest economy in the world. This certainly makes it attractive to any vendor of consumer products. As an economy embracing consumerism at breakneck speeds (after years of brand deprivation), it is clear why Billabong has entered the market. The question remains whether surfwear is an appropriate product offering to a cold country with little accessible (or warm) coastline.