I recently published an As-Is Strategy Canvas where I broke out the bespoke clothier Alton Lane as a comparison to the custom clothing world and men’s clothing world in general. That post, for context, is found here. Blue Ocean Strategy professional, Andrew Nelson, Managing Director of Blue Ocean Strategy Australia, and a far more experienced practitioner than I prompted me to do a pass at the Blue Ocean Strategy Six Paths Framework for this company and the industry. I’m not an expert in the men’s clothing space but it should be noted that many of the startups in this space aren’t run by clothing industry experts. They are marketing and tech people with a gift for solving problems.
A QUICK REMINDER OR INTRO TO THE SIX PATHS FRAMEWORK
“To win in the future companies need to stop trying to beat the competition.”
The Six Paths Framework developed by W. Chan Kim and Renée Mauborgne allows managers to address the search risk many companies struggle with. It enables them to successfully identify out of the haystack of possibilities that exist, commercially compelling blue oceans by reconstructing market boundaries.
Alton Lane Overview & Insights
I. Look Across Alternative Industries
The focal industry is Custom or Bespoke Men’s Clothing
Custom made clothing for men. The performance of the market is forecast to decelerate, with an anticipated CAGR of 3.3% for the five-year period 2014 – 2019, which is expected to drive the market to a value of $147.9bn by the end of 2019. It’s arguable that ongoing research shows this trend may be reversed with new technology allowing internet or online-enabled companies to capture hybrid versions of custom clothing markets.
ALTERNATIVE INDUSTRY ONE
- High-End Barber Shop and Men’s Skin Boutique
This is an alternative due to this industry’s service of the same client. The industry affords men an entertainment experience featuring cocktails, massages, hot towel, and lather shaves as well as conversationally skilled stylists.
ALTERNATIVE INDUSTRY TWO
The Golf Pro and Custom Fitted Clubs
- For years, the slightly more serious golfer has taken lessons and sought the expertise of a golf pro to be fitted for a set of custom golf clubs. The angle of the clubhead, the flex of the shaft, the schooling of what constitutes the right golf ball to buy all fit into a similar feel to Alton Lane even though it’s an entirely different industry.
II. Looking Across Strategic Groups
The Strategic Group is Alton Lane Bespoke Clothing
Alton Lane is a custom clothier utilizing an instore model with high tech/high touch appointment driven sales and marketing. Reminder: Strategic groups within Industries are groups of organizations within an industry that pursue a similar strategy. Strategic groups include a hierarchical order built on two dimensions, price, and performance. Thus by looking across strategic groups, an organization has to find why do buyers trade up for the higher group, and why do they trade down for the lower one. Much of what Alton Lane does in Nashville and other environments is event-driven with referrals and repeat business coming from the attendees.
HIGHER STRATEGIC GROUP (Where Alton Lane Customers Trade Up to) – Custom Clothing on Premise or in Store Location
- Custom can mean anything. Choosing a colored lining or fancier buttons gives a suit maker the right to call it “custom.” Bottom line, “custom” means you’ve had some say in the suit (even something as small as a button color), but the suit isn’t necessarily made for your body. Choosing a colored lining or fancier buttons gives a suit maker the right to call it “custom.” In some cases, the individual attention afforded to someone by the tailor personally measuring for fit is a value add.
Example: When you source your own custom fabrics because you wish to get a jacket made from your rich Aunt’s drapes that requires an upgrade to a higher strategic group.
LOWER STRATEGIC GROUP (Where Alton Lane Customers Trade Down to) In-Store Men’s Clothing, Online Made to Measure, Department Store
- The men’s clothing arena is served well by these stores and online locations. The experience of shopping is not the same as the bespoke examples as in the case of our strategic group or higher strategic group. Price points are considerably lower than the Higher Strategic Group and someone lower to much lower than our strategic group.
My take away: Alton Lane and others have done extensive research into their niche. In the chosen strategic group, the niche is reaching the man who’s likely a social animal, loves events, likes chatting, doesn’t require personal visits but doesn’t see his needs being met in department store brands or personnel. The Higher Strategic Group brings complete flexibility to the table. Literally, a concierge level treatment of the customer is required from the Higher Strategic trade up.
III. Looking Across the Chain of Buyers – In looking across the chain of buyers, one assesses the motivations and desires and problems and solutions of three contingencies. Buyers, Purchasers, and Influencers.
USER – Men from 20 to 80 who feel customization is important in clothing. Affluent, middle to upper income, quality conscious.
With bespoke tailoring, clothing is made to an individual buyer’s specification by a tailor. The buyer has total control over the fabrics used, features, fit, and the way the garment is designed and made.
PURCHASER – The primary purchaser of bespoke, custom clothing is the user
In the case of custom clothing, there are purchasers who gift or reward others with in-store credit, however, the majority of purchasers are the users.
INFLUENCER – Influencers may be friends, colleagues, wives, girlfriends or fashion influencers.
Influencers in the life of a man who purchases bespoke clothing would be anyone who stokes the aspirational flames of a buyer.
My take away: Alton Lane’s reach and frequency of contact to the users, influencers, and purchasers are inadequate. They appear to have no systems in place for capturing the attention of buyer groups outside those who spend over certain amounts.
IV. Looking Across Complementary Products and Services – This path takes one through looking at the entire before, during, and after stages of the relationship to the product or service.
BEFORE – Before the Alton Lane In-Store Experience
- Before the In-Store visit, a key strategic feature of the Alton Lane experience, one has to locate, travel to, secure a parking spot, or Uber, locate the store in the shopping area and then begin the in-store experience.
DURING – During the In-Store Experience
- The In-Store experience is where Alton Lane shines. The personal attention, the 3-D scanner fit, the choices, the environment, all serve to deliver a superb DURING experience.
AFTER – After the Purchase/In-Store Experience
- With the exception of the beautiful packaging associated with the delivery of the clothes, the after-experience with Alton Lane is non-existant.
My take away: The Before, During, and After processes for the Alton Lane experience warrant attention. Particular weakness and opportunities are demonstrated in the AFTER stage.
V. Looking Across Functional vs. Emotional Orientation – By understanding your industry focus on functionality or emotional appeal, you can either compete on emotional appeal by stripping functional elements or compete on functionality by adding emotional elements.
FUNCTIONAL APPEAL – The tactical approach to business and implementations.
Fit, Quality, Fashion, Convenience
- These four features most accurately depict the functional appeal of Alton Lane and custom clothiers
EMOTIONAL APPEAL – The soft sell or emotional appeal of approaching markets and narratives.
Personal attention, confidence-building looks, and quality exacting fit
- The emotional appeal of custom clothiers and Alton Lane is obvious to those who are patrons. Quality clothing with exacting standards of fit lead to confidence building emotions in most buyers. The personal attention at the store level makes one feel special and unique. There is little chance that someone else orders the same exact combination of features in any garment are article.
One recent new Alton Lane customer put it this way: “I have never had a custom shirt in my life. Never saw the need for a custom made shirt. However, after getting one at Alton Lane, I can tell you that it felt incredible. The material used is top quality and fit, well, perfectly. But the most amazing thing about this shirt is how it transformed how I felt when I wore it to an important meeting with a potential client. I felt more confident in how I looked and that seeped into my conversations. All this to say, maybe there is something to the saying that the clothes make the man. Looking forward to another shirt, a taste of some Tennessee spirits and a boost to my professional swagger!”
My take away: Alton Lane scores high on emotional appeal. Their functional appeal is lacking due to poor after purchase communication and marketing reinforcement. Whether this stems from inadequate marketing technology or lack of personal implementation and execution on the local level, I don’t know.
VI. Looking Across Time – The Blue Ocean implementing company looks across time and shapes trends through serving well-identified 2nd tier and 3rd tier noncustomers. To assess trends across time, three criteria are critical: the trend must be decisive to the business, irreversible and have a clear trajectory. By knowing what trends have a high probability of impacting your industry, are irreversible, and evolving in a clear trajectory, you can open up unprecedented customer utility.
The “Fashion on Demand” Trend
In the custom clothes world, this strategist would suggest watching technology trends is far more important than fashion trends.
- True choice in on-demand clothing is closer than one may realize. One Amazon project, led by Israel-based researchers, would use machine learning to assess whether an item is “stylish” or not. Another strategic rollout, from Amazon’s Lab126 R&D arm in California, would use images to learn about a particular fashion style and create similar images from scratch. If that sounds like “fast fashion by Amazon,” that’s because it probably is. The e-commerce giant has also patented a manufacturing system to support on-demand apparel-making. The tech could be used to support its Amazon Essentials line or the suppliers in Amazon’s logistics network.
The Move to Online
- Online and, more importantly, subscription services are redefining the future of fashion. Now that online subscription clothing, and online rental clothing, is commonplace, the next move is in machine learning and AI-augmented fashion recommendations. “We’re uniquely suited to do this,” said Eric Colson, Chief Algorithms Officer at Stitch Fix. “This didn’t exist before because the necessary data didn’t exist. A Nordstrom doesn’t have this type of data because people try things on in the fitting room, and you don’t know what they didn’t buy or why. We have this access to great data and we can do a lot with it.”
Think about what you just read. A well-known clothing brand built entirely online has in its employ, a Chief Algorithm Officer.
Machine Learning and AI in Fashion
From CBI Insights: Similar to Amazon’s Lab 126 initiative & Google’s Project Muze, scientists from UC San Diego and Adobe have outlined a way for AI to learn an individual’s style and create customized computer-generated images of new items that fit that style. The system could enable brands to create personalized clothing for a person based solely on their engagement with visual content. At a more macro level, it could also allow a brand to predict broader fashion trends based on historical data from its entire user base. The predictions could ultimately be used to guide the design of a product or an entire label.
The move online and into tech augmented fashion, fitting, delivery and more, indicates this trend is here to stay. These disruptions to the fashion and clothing market are not simply, flashes in the pan. These are significant shifts in the way companies are quickly identifying and converting noncustomers.
My take away: Innovation in the custom clothing industry is moving faster than those outside the industry realize. Anyone who buys department store, online, or custom clothing from boutiques and in-store providers, no matter how sophisticated will be impacted by the trends.
My unsolicited advice for Alton Lane?
1) Implement a significant plan for pre-visit communication with a new visitor. Partner with parking providers, limo services, rideshare companies, and others, so as to begin the “in-store” experience the moment the buyer is on the way to the shop.
2) While the in-store experience is in place, weave into the conversational training for each associate some NLP or other tools that allow for significant emotional depth and discovery about each client. Leverage all data into the 3rd piece of counsel.
3) Launch a complete and robust post-in-store visit marketing plan. This would involve post-visit surveys, personal calls by team members, hand-written thank-yous from the CEO upon delivery of the item, and a thoughtful drip campaign with creative and tactical touches to every purchaser and influencer that had played a role in the purchase of the most recent item. I would also begin the immediate study and implementation of enhancements to online calls-to-action so as to increase the post-in-store purchase success rates.
A disclaimer. Alton Lane may indeed have much of this in place for certain segments of buyers that I personally don’t experience. If so, kudos to them. If not, disruptive innovation is on the way. As Whitney Johnson and Clay Christensen would suggest, (paraphrasing) disrupt yourself because someone is going to do it for you anyway.
Sherman Mohr is a Nashville, TN based Certified Blue Ocean Strategist. Inquiries for this work are welcome.