Bonobos just announced the shop-in-shop rollout with Belks. Why are they choosing to do this, and how can small businesses diversify with entering new markets? Lets find out.
Hi and welcome to the Retail Roundup. This is Syama Meagher from Scaling Retail. This week I’d like to talk to you about the Bonobos expansion into the Belk stores. As we know Bonobos started back in 2007 primarily with online distribution of their trouser pants. They revolutionized the way that men think about buying pants and trousers online, and since 2007 have raised almost $40 million in investment as well as a substantial investment from Nordstrom’s.
A couple years ago, you may remember that Nordstrom’s started carrying in some of its full line stores the Bonobos products becoming its only distribution point from a department store standpoint. Now, with the introduction of new distribution through Belk’s through shop-in-shops, what we’re starting to see is really the fuller expansion and bridging ecommerce to brick and mortar through shop-in-shops as well as other types of marketing channels.
Now, you might be asking is Nordstrom’s upset about this? What does this really mean for the Bonobos customer and how are they positioning themselves? Well, Nordstrom’s is going to be carrying a different brand of the Bonobos line, a different type of product selection than the Belk stores will be carrying.
In addition, the distribution points to which Belk is going to be selling their products are going to be in different markets than necessarily what’s strong from the Nordstrom’s point of view. By diversifying their product offerings to both of these retailers, Bonobos is going to be strategically allowing themselves to penetrate the market, create product diversification, and start to really find out what other customers are looking for.
You know if you’re shopping online back in 2007, you’re certainly an early adopter when it comes to trailblazing from the consumer standpoint. Starting off as a product line specializing in men’s pants, Bonobos has since penetrated the men’s top market as well. Back in 2010 they were probably doing about 80% of their business in pants. Now, in the last year and a half, about 45% of their pants business is being done for their market because of the introduction of tops.
As a small business, what can we learn from this growing market? What can we learn from Bonobos, obviously a company that many of us look to in terms of scale and growth and strategy?
Well, first of all, definitely take a look and see what they’ve done in terms of distribution into different markets. If you’re a brand and you want to develop exclusive partnership and you want to start getting your product out there to more market places, try to find out ways of diversifying what you have to offer for those products. Look at your exclusives. Look at different product offerings, color waves, silhouettes, and styles.
Also, think about these penetrations from a regional standpoint. Perhaps some of the doors that are going to be best for you to approach are in the South. Some doors are best for the west coast, and some are also better for the east coast. Cherry pick the stores that you want to be able to get into as well as when you speak to those buyers, what markets you’re most interested in being brought to.
Very often times we’re just so excited to get an order or to get someone interested that we fail to actually put forth our own positions on what it is we want to see from a distribution standpoint. The other things that we need to keep in mind here are that shop-in-shops, which is essentially another brand hosting a space inside of a larger retailer that has their own branding as well as has their own pricing, really built into the store, a shoppable experience as if you were shopping through Bonobos as if they had a pop-up shop.
Shop-in-shops are a little bit different in the sense that you’re working in conjunction with that department store, but it is a longer lifespan than let’s say a traditional pop-up shop experience, so start to think about that more and more.
At previous Retail Roundups, we chatted about Macy’s and how they’ve started to do more shop-in-shops as well as pop-up shops. Stores like Nordstrom’s obviously are doing this as well.
Start to keep in mind in terms of distribution and building up your brand so you can get to a certain place to now have, let’s say, a brick and mortar counterpart without necessarily having to open up a brick and mortar store. It saves you a lot of money, gives you access to more customers, and can be a really wonderful retail strategy.
All right. Hopefully, that was helpful. It certainly spurred a lot of ideas in terms of where to enter your products into and how to diversify your product offerings.
As always, if you have any questions feel free to email me, syama@ScalingRetail.com. Otherwise, I’ll see you next week. Have a great weekend.