If you’ve never heard of Betabrand, an e-commerce women’s apparel startup, it may not be much longer before you do.
Now that the COVID-19 pandemic has pushed many people to work from home, sales of the brand’s most successful item, Dress Pant Yoga Pants (think a formal version of the popular athleisure trouser intended to be worn at the office) — have surpassed four million pant legs.
If you’re scratching your head at the oddity of shilling separated slacks, that’s by design. It’s Betabrand’s signature cheeky way to mark that the company’s bestseller reached two million customers and its first year of profitability.
Of course, there is nothing funny about the coronavirus, but as founder and CEO Chris Lindland of the San Francisco-based brand points out, “While COVID has been extremely hard on the apparel industry, we’re doing relatively well because we only sell online. I can’t imagine how tough it would be for brands that primarily rely on store retail.”
The pandemic unfurled during a year that saw the decline and fall of familiar apparel brands from Forever 21and Charlotte Russe to Dieseland Barneys.
For Betabrand, “We saw e-commerce sales drop as low as 40% in March, but performance has stabilized, and we’re optimizing back upwards,” said Lindland. “It helped to reposition our best-selling Dress Pant Yoga Pants as Work from Home pants.”
The lesson to businesses is to pay attention to signals.
Chris Lindland, founder and CEO, Betabrand
Humor and crowdsourced designs drive $2 million in first-year sales
Humor is foundational to the smart-aleck style that Lindland built into Betabrand from the start. Imagine if the J. Peterman catalog was written by Amy Poehler and you’ll start to get the idea.
Back in 2010, Betabrand debuted with a single pair of trousers. As its name suggested, Betabrand’s men’s Cordarounds were designed to have the corduroy fabric horizontal rather than the traditional vertical channeling. But Lindland took it a step further with salty sales copy. “Unlike vertical corduroy, which produces friction that can heat your crotch to uncomfortable, even dangerous levels, Cordarounds’ horizontal wales, or ridges, mesh evenly, lowering the average wearer’s crotch heat index (CHI) by up to 22%.”
Of course, the Cordarounds’ promise was unscientific, but the sales results were quite real. Thanks to a very social selling strategy, those and other cheeky styles including the Glutton and Star Spangled (the latter sported by Stephen Colbert) were purchased primarily through Betabrand’s no-holds-barred daily newsletter to subscribers. Their mantra, Lindland told CO—, was “fashion forwardable” stuff for men. The idea was that guys would post selfies in their new Betabrand threads and the company would turn them into memes they could forward to their friends. In this way, the company managed to rake in revenue of around $2 million that first year.
From there, Betabrand’s subscriber base grew and with it a business model that Lindland likens to a mashup of crowdfunding and democratized design. Forget seasonal style shifts. Rather, Lindland — who has no background in fashion or apparel manufacturing (he was a comedy writer before starting Betabrand) — decided to design, manufacture and release new items each week based on the whims and wishes of this thriving online community.
This strategy worked because devotees were logging on to vote on what they wanted to buy by pre-ordering as they might do through a crowdfunding platform. This engaged and ever-expanding community of customers was also doing its share of word-of-mouth marketing. Lindland says this made Betabrand evolve into its own social network, as customers would come on the site to exchange messages with the in-house design team and with each other.
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The breakthrough realization: Women must be served
Three years in and still unprofitable, Lindland said they had a breakthrough realization. “You’ll never succeed at being a big clothing brand if women aren’t part of it,” he recalled. “Not only did they show up, they kicked the men out of the building,” he quipped.
Not totally though, and not at first. The instantly popular Dress Pant Yoga Pants marked Betabrand’s debut into the more lucrative women’s apparel market. According to Statista, revenue for women’s clothing is projected to reach $190.8 billion in 2020, with individual women averaging an annual spend of $576 in the U.S. alone. For comparison, the men’s apparel market is expected to bring in $119.1 billion this year and an average spend for a man is just $360.
Lindland pronounced the pants a “growth dynamo” that was “10,000 times more popular than designs weirdos can wear to Burning Man.” They have since been adapted into various fabrics and patterns, leg openings and inseams, which Lindland attributes solely to customers’ suggestions. By 2016, Betabrand was focusing on women specifically and realized a 40% uptick in revenue. “The lesson to businesses is to pay attention to signals,” he said.
In this case, the Dress Pant Yoga Pants took the company towards the future of work. More formal than athleisure, but just as comfortable, the Dress Pant Yoga Pants have tapped into a zeitgeist. “This is the moment,” Lindland said, “like when people [wore] jeans to work,” referencing the shift to business casual that occurred back in the 1990s.
As Lindland describes it, every trouser, shirt, pair of shoes and handbag since then has been designed and produced for the needs and wants of a woman who works — whether that’s in an office or in the home, or someplace else entirely (digital nomad in a coffee shop, perhaps?).
The social component continues to be Betabrand’s signature feature. A sidebar on the website allows people to see who’s voted on the latest product concepts and select ones they’d like to vote for themselves. And every Friday there’s an opportunity to join the conversation live as the designers dish about the latest and greatest products.
Lindland admits it’s tough to explain why there needs to be a social network around pants, but then he put it this way: “We want to be the Lululemon of the office,” he said, referencing the brand best known for yoga apparel that’s seen steady and growing sales, even through a recent challenging holiday season for retailers and now through the pandemic.
Work-from-home apparel and livestreamed fashion shows
Now that many consumers are in the thick of sheltering-in-place orders, Lindland said Betabrand’s weekly live product launches and the WFH fashion show that debuted this April are great demonstrations of how the community is rallying around their favorite products through the website. The April 15th show “had an amazing audience with around 40,000 viewers,” Lindland said. “It even debuted on [livestreaming platform] Twitch, which helped draw so many eyeballs — about four times more than our standard audience.”
Connecting brands to consumers to create loyalty isn’t a new concept, he said, “but we never had the means to own it and to connect consumers to each other. Now we are doing it for an audience of millions of women,” Lindland said.
And there’s reason to believe the growth will continue. A report co-authored by McKinsey and Business of Fashionstated, “As the macroeconomic landscape shifts, we expect companies will seek to protect themselves from slower growth by implementing shock proofing measures. These will primarily be aimed at boosting productivity through greater efficiency and cutting costs.”
Lindland said Betabrand has been mindful to keep its marketing budget low, which is an area where many venture-funded companies tend to overspend. The McKinsey report also noted that automation of production, analytics-driven decision making and greater agility were key to “reap rewards in terms of outsize performance.” And this has been Betabrand’s strategy all along. From its bootstrapped beginning to a full $47 million in venture funding, Lindland pointed out how the company has operated on the premise of production on demand, which reduces the need for merchandise markdowns.
Logistically, Lindland said, “It’s important for online businesses to demonstrate maximum vitality right now to communicate to consumers that they’re in business and customers can count on their products shipping.”
Overall, he maintains that listening to the customers’ needs not only produces pants with plentiful pockets, but profits, as well. He estimated revenue would be north of $70 million this year. As for himself, Lindland is committed to keep listening. “For now, we’re really focused on being hyper communicative with consumers in all touchpoints — customer service, social, live events, etc. — to demonstrate that Betabrand is just as energetic as it’s always been — if not more so.”
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Published May 04, 2020