Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko (Part 6)

Sramana Mitra: In 2010, you have $4 million more capital. What does the competitive landscape look like at this point? Are you starting to see competitors?

Kyle Vucko: Not really. We did see some smaller competitors who came and went. The competition landscape was pretty bare.

Sramana Mitra: As a result, does that mean that your PPC keywords were still pretty cheap?

Kyle Vucko: Yes.

Sramana Mitra: That’s a vital piece of customer acquisition in these kinds of businesses.

Kyle Vucko: I think word of mouth is the best way to grow the business. We’re not a pure value play. They buy us for the service and the experience as much as the value. Pay per click is generally more successful around more literal purchases.

Sramana Mitra: Fair enough. There’s keyword search volume around custom suits and if you can harness that, that at least generates awareness.

Kyle Vucko: For sure. It’s interesting because we never thought of ourselves as a custom suit maker. Not many people buy custom suits. Typically if they do, they’re very wealthy. Since we were selling custom clothing for the average guy, we had to find where they’re buying suits and clothing in general.

Sramana Mitra: When you position your brand, are you positioning against Men’s Wearhouse? What kind of comparable brand are you competing against?

Kyle Vucko: Interestingly enough, we compete against the spectrum. We offer more personalized products at better quality and at a better price. So it’s actually fundamentally different from what’s out there. We see ourselves getting customers from the likes of a Men’s Wearhouse, but equally from a Hugo Boss. These are guys that are paying a lot for a garment and are getting the same or better product. They may take a little more to convince because they’re used to paying at a higher price point but generally when we get the product in their hands, they click.

Sramana Mitra: Does that mean that you are bringing in the offer mix Italian fabric and stuff like that?

Kyle Vucko: We do have Italian products in our offers today. We generally believe that it’s about better products. We actually found that you can get equally good quality Chinese made fabric for less than what you pay for an Italian premium brand.

Sramana Mitra: Your customer buys that?

Kyle Vucko: Yes, very much so. I think a lot of people know that quality and price don’t always line up in apparel.

Sramana Mitra: What is the suite of products that you offer? Is it just dress shirts and suits?

Kyle Vucko: We do custom suits, dress shirts, pants, and vests. We seasonally do outerwear and accessories.

Sramana Mitra: How much repeat purchase is in your customer base?

Kyle Vucko: A lot. It is a really important part of our business.

Sramana Mitra: I would think so. Once you get the customer bought into this concept, I would imagine that there is a lot of repeat purchase.

Kyle Vucko: That’s the business model. We invest upfront. We have a fit promise. We pay for the alterations and we even make it for free so that you can get that perfect fit. We see a significant part of our volume from repeat purchases.

Sramana Mitra: Bring me up to speed between the last milestone that you discussed and where we are today in 2014. Where are you? What are some of the other things that you’ve accomplished? Where are you going?

Kyle Vucko: We launched a mobile site in 2010. One of the biggest things that we’ve done is our movement to retail. We were an online only company. At the end of 2011, we moved into popup stores. We did a short-term retail location in our hometown. We did a lot of successful fits. Our customers wanted to feel the fabric. They wanted help in getting styles. The combination of all of that led to this popup store. From there, we scaled that model quite aggressively throughout 2012 and 2013. We did 20 events across North America. We learned a lot along the way.

We also played a lot with the links of the events. First event was for four days. Our last event, which was May of this year, lasted five weeks. What we found is that the longer the event, the better we did. We were also able to offer much better service in going to events. We could offer alteration services and fit checks. It was an opportunity for us to move into retail. In the last six months, we’ve been moving quite aggressively into permanent retail. We have a showroom at our Vancouver office. We have stores in SoHo and Toronto. We’re going to have a store in San Francisco soon.

This segment is part 6 in the series : Mass Customization in Online Fashion E-Commerce: Indochino CEO Kyle Vucko
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