Custom Suit Maker Indochino’s New Bricks-and-Mortar Strategy: Interview With its Founder

By: Miranda Sam, Founder and Editor of Style by Fire

On a cloudy Vancouver morning, Indochino CEO Kyle Vucko met with us at a café near the company’s head office to discuss his new retail strategy. This past summer, Indochino added permanent physical retail fronts to its custom clothing menswear business. It started rolling out stores in August 2014 by turning Toronto’s pop-up shop into a permanent location. Then came New York, San Francisco, and most recently, Vancouver’s trendy Gastown neighbourhood. 

Vucko described the online custom suit maker’s humble beginnings, giving perspective to its entry into retail. “We didn’t set out to build an e-commerce company, we set out to help one man, my cofounder, get dressed.” His position on the transition from online to offline was simple, “From a business perspective it would have been easier to stay online, but from a customer perspective the right thing to do was to go offline.”

This is part of a larger e-commerce business trend of venturing into physical retail space to compete with traditional bricks-and mortar-retail. Warby Parker, Clearly Contacts, Frank & Oak, and most recently, online behemoth Amazon, have all notably set up physical shop. With a storefront, companies can build strong customer relationships, engage in real time market research, and provide hands-on assistance to those still wary of shopping online. 

In 2011, Indochino started experimenting with pop-up shops. At that time, the pop-up retail concept had already been around for a decade, though it was not widely used by e-commerce businesses. The company’s pop-up shop, the ‘Traveling Tailor’, set up shop in some of North America’s most high traffic and beautiful spaces, such as New York City’s Grand Central Station. For summer 2014, a number of Traveling Tailor locations had been planned, but having gained a solid understanding of its success offline, the company decided to forgo the remaining short-term shops and instead build on something permanent to better serve their customers’ needs. 

“We didn’t see a differentiation between online and going offline. That’s just where we chose to go first. We knew that we needed to go offline for a certain group of customers and to offer a great experience. Traveling Tailor was our first iteration, and retail was our second.”

Indochino sells to over 130 countries around the world, though most sales are in North America. When asked specifically about its Canadian retail strategy, Vucko steadfastly stated that there is no difference in strategy between the borders. “Our retail strategy is relatively consistent. We want to be close to our guys. Most of our guys are in bigger cities. For us, we try to be convenient to their lives. We know that most of our customers are younger professionals, so it’s trying to be close to that – being in the downtown core, usually within walking distance of the business district or near a metro line. For us, it’s about convenience; something you can go to on a lunch break or come down to on a weekend relatively quickly.”

Not only does the foray into the retail world add another channel to Indochino’s already multi-channel marketing strategy, retail is the last piece of the puzzle that allows the company to provide a truly omni-channel experience. According to ICSC president Mike Kercheval, omni-channel retail strategies are those “in which mobile, online and in-store experiences complement, rather than compete with, one another.” 

Having only been in the online apparel customization business for seven years, this young company has been quick to adapt to meeting customers’ shopping needs on all fronts. Since day one Indochino has existed as an online store, has an active social media presence, takes customer service calls, offers a great mobile shopping experience, and now with retail store fronts, they’re in every channel possible (at least for now). Vucko laughed and remarked, “I don’t know what channels are left to be honest!”

This makes strong business sense. AT Kearney’s Omni-channel Shopping Preferences Study revealed that upwards of 90% of people still prefer to shop in person. As well, the omni-channel customer spends 3.5 times more than other types of shoppers. Vucko said of Indochino, “Truly it’s a concept of a unified experience; there are no channels. A customer interacts with your product or service and he can do that any way he wants. There is no differentiation.”

Now with bricks-and-mortar retail under its belt, international expansion is on the mind of the CEO, but not in the next year. Vucko is holding off with continental retail growth until the company perfects its retail operations. Even though Europe boasts Saville Row, bespoke tailoring, and in general a culture of dressing up while Asia has a strong industry of tailors, like all entrepreneurs, Vucko sees it as an opportunity. He said, “You don’t have to educate the population the same way because they’ve already bought into the concept. I think what we bring is accessibility for a fraction of the price you can have a custom suit.” Vucko and his team are currently focused on looking for real estate in another 4 to 5 North American markets, including Chicago and Washington D.C. According to Indochino’s website, a Philadelphia location is about to be announced. 

At the end of the day, it doesn’t matter whether Indochino sells online, offline, or through the many channels in between. As long as the company sticks to its core purpose, it will remain free to serve its customers in whatever new channels pop up in the future. “We don’t necessarily sell clothes, we sell a guy’s ability to be successful in the world,” says Vucko. 

Miranda Sam is the founder and editor of Style by Fire, the source for Vancouver fashion events and retail news. She is also a freelance writer and marketing professional who loves a good soy latte. Connect with Miranda on Twitter via @stylebyfire and Facebook

Today’s Retail News From Around The Web: November 17, 2014