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Blank Label: designed in the USA experience at made in China prices

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From its origins as an online custom shirt maker, Blank Label’s has evolved into one of the fastest growing bespoke menswear stores in the US. Blank Label’s operating model has been a key to this success and has directly enabled it to deliver on its core customer promise: providing high quality menswear and exceptional customer service at accessible prices.

“It was like, holy crap, our customers aren’t 22-year-olds who are rebellious and against The Man. Our customers are The Man”

Fan Bi, Co-Founder


Born in London, raised in Babson, built in Boston

With its origins as a rebellious project by two college dropouts to design custom clothes for urban hipsters, Blank Label soon evolved to one of the most successful and fastest growing menswear stores in the US.

Blank Label is a Boston-based custom menswear boutique that promises high quality, custom-made products with a fit guarantee delivered directly to its customers.  Inspired by a trip to Turnbull & Asser during a summer banking internship in London, Fan Li along with his co-founder Danny Wong started Blank Label in 2009 as an online custom shirt business – their goal:  to deliver quality and customisation at accessible prices.

Within a year, the site was turning over six figures of revenue and was nearing profitability.  At this point they discovered they weren’t reaching the original target market of young, rebellious hipsters.  Instead, they had developed a core base of 35-45 year old white collar men who appreciated high quality and bespoke fit.

Through 2011 Blank Label focused on this customer, remaining a purely online e-commerce platform with a direct-to-consumer shipping model.  They were turning over $1.1m in sales across a 20,000 strong customer base and with no external funding.

Despite tremendous growth, Li and Wong felt Blank Label’s potential was inhibited by its operating model.  Currently, they could only reach customers who were willing to interact solely online with a relatively unknown brand.  They knew was a very small piece of a much bigger pie – as Li explained:

Guys really understood the value proposition right away. They totally got it. “My shirts never fit. I have to run right now, but where’s your store?” We said no store yet, you can buy online. Their expression changed from excitement to confusion.

Their next move was to evolve into a hybrid offline and online business, opening their first pattern room in Boston in 2013.  This had the dual intention of overcoming the first-time-customer barrier of doing everything online and providing an in-person outlet through which they could communicate their value proposition directly to consumers.

 

Fulfilling the customer promise through operations design

Li describes his influencing philosophy as “me-commerce” – using Blank Label as a platform for customers to take the reins in designing their wardrobes.  Coupling this experience with competitive prices, they are looking to fill a void in the US menswear market.  Li and Wong have kept this customer promise as a guiding influence to design their operations.

There is a great dichotomy between Blank Label’s personalised and opulent in-store experience, and its incredibly lean and efficient back-end operations.  Every fitting starts online, where you schedule a 30 minute appointment with a personal tailor.  You are greeted in store and seated on a comfortable leather chesterfield, offered a drink and asked a few questions – the tailor’s job is not only to measure you up, but also to understand your clothing needs.  Next, you’re carefully measured up – every Blank Label shirt offers nine points of custom measurement.  Finally you’re guided through a curated selection of fabrics – your tailor punches your order into her iPad, you swipe your credit card and within seven days your shirt is delivered to your doorstep.  If it doesn’t fit just right, the shirt is either replaced or altered until it does.

In order to deliver this high quality experience at an accessible price, Blank Label does everything it can to optimise its operations – starting with manufacturing.  By contracting directly with tailors in Shanghai, Blank Label has cut out the middle man.  Despite growing up in Australia, Li’s family roots are in Shanghai, providing a connection which simplified dealings with their offshore suppliers.  This move has been a huge driver of customer value – while tailors on London’s Jermyn Street will typically charge £180 ($270) for bespoke shirts, Blank Label charges $95 (including shipping).

When it comes to choosing a fabrics and prints, customers are not inundated with dozens of books of fabric swatches – instead, they are provided with a curated selection of fabrics based on the type of shirt (formal or casual) and the season.  This refined selection has the dual benefit of reducing raw materials costs and simplifying the decision making process for customers.  This also allows Blank Label to pre-select fabrics that allow them to charge a constant price for each product – every shirt is $95, every chino is $125, every base suit is $575.

This constant and simple pricing structure is also supported by the fact that all of Blank Label’s garments are custom, meaning they keep zero inventory anywhere.  No inventory means no inventory stock piles and no need to slash prices.

 

Where to from here…

Blank Label has built a strong operating base upon which to grow.  Today, they have two permanent pattern rooms – the original store in downtown Boston and a newer store on K Street in DC.  They test expansion into new markets through temporary pop up stores – easily facilitated through their lean in-store requirements.  The current plan is to open up to six permanent stores on the East Coast over the next 1-2 years.  As he looks to the future, Li describes their biggest area of investment as refining and developing their retail model.

 


 

 

Sources

In-store interview with tailor (Boston, 04-Dec-2015).

http://boston.racked.com/2014/1/16/7624395/blank-label-fan-bi

https://www.crunchbase.com/organization/blank-label#/entity

https://angel.co/blank-label

http://www.inc.com/30under30/eric-markowitz/fan-bi-danny-wong-founders-blank-label.html

http://www.cnbc.com/2014/06/29/blank-label-custom-mens-wear-shop-starts-expansion.html

4 thoughts on “Blank Label: designed in the USA experience at made in China prices

  1. Nice write up, James!

    Very cool. Kind of like Bonobos, but fancy. How do you think they’ll manage to grow and expand the business? You think they’ll ever expand to include women’s wear? And, as a final question, if I showed up at their Boston store, do you think I’d be allowed to order shirts for myself?

    1. They’re focused on expanding the business. At this stage, their growth is focused on geographic expansion of the menswear business – specifically on the East Coast and to a lesser extent in the Mid West. It looks like they ran a Kickstarter campaign in 2012 to expand into women’s clothing but they don’t currently offer women’s products.

      I have no doubt that their Chinese manufacturing facilities and tailors have the capabilities to produce women’s clothing and this would be a very logical point of expansion. If you went in today, you may be able to order a shirt, however I would imagine that there would be different measurement specification points for men’s vs women’s shirts and I am not sure that their interface and communication system with their manufacturer would have the ability to deal with that at this stage (in an efficient way). I do not imagine that this would be an intensive addition when they look to expand.

      From a business perspective, I think it is a logical area to grow. I am not sure the market opportunity is as big as for menswear, but I’m sure it is meaningful. The last point I would make is that they would obviously be catering to a different market, so would have to reflect these in an appropriate marketing strategy.

  2. After recently getting my first Blank Label shirt, I can attest to their quality and the simplicity of the whole process. However, I cannot imagine ordering tailored shirts without getting a fitting first. It looks like right now they only have two physical locations–one in DC and one in Boston. Will this be an impediment to their growth? Will they be opening more stores in the immediate future?

    1. This is exactly the problem they faced when they started as a solely online platform. The following anecdote from Co-Founder Fan Li is especially telling in this regard and gives some insight to why they expanded into a joint bricks and mortar / e-commerce operation:

      ‘Guys really understood the value proposition right away. They totally got it. “My shirts never fit. I have to run right now, but where’s your store?” We said no store yet, you can buy online. Their expression changed from excitement to confusion.’

      I think their growth is more closely linked to the number of customer measurements they have stored in their database – not necessarily the number of bricks and mortar stores they have. For example, they could use pop-up stores and on-site measurements programs to expand this database in a way that is less capital intensive than setting up permanent pattern rooms. These also give Blank Label a great way to test a market before expanding to understand if it is worth the capital investment for a permanent patter room.

      Their current expansion plans are to open up to six stores on the East Coast over the next 1-2 years and they have used the pop-up store model to test markets like Chicago.

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