NYLP: So, we first spoke to you in 2017 it seems like your business has grown a lot. What’s changed?
Brian: More people, more problems.
NYLP: More people, more problems. That means growth.
Brian: Yep, new products. We’ve diversified the product offering. That’s been really exciting. Customers have expressed that they want to see more from us. Which for us was a real revelation because we kind of felt underwear, socks and tees were our very narrow lane and there was plenty to do there. And that customers thought about us in that way, kind of category specific. But what actually ended up happening was that many of the things we were trying to achieve at the kind of core brand level, right? That we’re actually solving problems through innovation and design and product was something that was really translating with customers. So, can you apply that formula to these other product categories that I care about?
NYLP: And so how did you find out that customers wanted this? Were they writing you in incessantly?
Brian: Yeah, I mean customers would write in and talk, oh, I wish I had this fabric in a t-shirt or I wish I had these sweats that were this soft or you know, things like that. Or even within a category we would often hear, for example, when we launched the sweats program, which has become a huge business for us, the overall program is called Ace. We launched a sweat pant and a hooded sweatshirt and customers were writing in immediately. Oh, I wish I had that in a half zip and oh, I wish I had this in a crew neck and oh, I wish I had this in a shorts version. And so we were able to get five really interesting product lines out of one fabric investment. Right. And that’s like, that’s really what we love, spend the time and effort on developing innovative fabrics and then scale it across multiple products.
NYLP: Well, it’s funny that you bring up fabrics or maybe it’s not so funny because that’s what you brought up the last time. And I want to play this quote for you.
Brian: Parallel to that, you are iterating on fabric, so you’re looking at swatches of fabrics, stock fabrics, custom fabrics, you’re having to come to the table with something that you feel is optimal from that side because a big part of our stories are on fabrics. All of our fabrics are unique blends. We don’t like take anything off the shelf. We are always kind of adding something to it to make it unique.
NYLP: So, when you were developing the Ace sweatshirt fabric, how did you design that?
Brian: So, it all always starts with some level of like R and D and usually what happens is you meet with fabric suppliers and mills and they’re showing you, you know, formulations of fabrics, right? So it could be cotton, lycra, modal, cotton, silk, cashmere, you know, all sorts of things depending upon whatever it is that you’re trying to achieve. So with sweats, it was really a French Terri base that was the kind of overall formulation and weave, but we were sort of trying to accomplish two things, a certain level of weight that was kind of an all season kind of mid-weight, but also kind of a softness and a WOW factor that when you touch it, you have a similar kind of reaction to what you have when you touch some of our next to skin base layer items. So, those were the two things we were looking to solve for. And then you kind of go through various cycles, you land on something and then you were usually making some level of customization to that. So maybe a little bit heavier, maybe a little bit softer, maybe a little bit more of like a peached kind of sanded feel, which is what ours has.
NYLP: And so when you’re going through that R and D process for the fabric, how do you bring in that level of design into a hooded sweatshirt or sweatpants that make it different than anything you’d get from another fashion brand?
Brian: We have a great design team led by a guy named Matthew Condon who worked for places like Uniqlo and Calvin Klein. And so he really kind of gets design, but he also really gets fabric. And for us it’s really about trying to do something that’s modern and clean and unique and purposeful. And so we try and design things in a way that reflects that. So, we’re not going to do pockets or zippers or seams just for the sake of trying to create some kind of design signature. Everything generally has a purpose kind of all within the umbrella of certain things that we do that are specific to Mack Weldon, like where we brand the product or a certain type of stitch pattern that we use that is kind of unique to us. Those little touches, I think.
NYLP: You started this by saying more people, more problems. I have to imagine that one of the problems is the proliferation of online brands and it seems like there are just so many more brands and products and people competing for attention and you’re a digitally native brand. How has that landscape changed since you first started and maybe since you first came on the podcast two years ago?
Brian: It’s changed a lot. I mean I think you’ve seen every consumer category has a digitally native brand trying to address kind of the quote unquote pain points there. And I think it’s gotten a lot harder, quite honestly, to do what we’ve been able to do over the last, seven years largely because of the level of competition in terms of how you access the customer.
NYLP: Harder to start a brand?
Brian: Harder to start a brand, I mean easier in some ways and harder in some ways, right? Like easier in that the pump is primed for investment and kind of the next Warby Parker of whatever the category is, but it’s much harder to break through and really create customer engagement because there’s so many people, not just people trying to access customers for commercial purposes. But even just from the standpoint of like your attention span, digital content, news, podcasts, there are so many things competing for our attention. And so on the one hand it creates more opportunities to advertise and market and position, but it also creates a lot of kind of clutter. Right. And I think on some level people are getting desensitized to the Warby Parker of, or the Mack Walden of because you just, it’s all you hear, right? You listen to Sirius satellite radio and we joke around because Mack Weldon, ThirdLove, Tommy John, a competitor of ours, like you go straight down the line and it’s just like everybody pitching their DTC brands. So fortunately for some of the incumbents like us, we’re operating off of, customer mind share and a base. But if you’re starting from scratch, it’s very hard to build some level of scale I think.
NYLP: Right. And so you have that base as this environment is more cluttered, how do you acquire new customers? How are you getting through that clutter as it is now?
Brian: It’s always about not ever getting too complacent with your strategies and tactics. We’ve always been leaning forward on the marketing side to make sure that we’re diversifying our marketing mix. On the front end, what are different ways we can access the customer? Podcasts are a great example of where we were a first mover into that channel. As podcasts were gaining real kind of customer mind share and adoption. We wanted to make sure we were there, you know, diversifying our mix. And the other is really kind of boring, not sexy stuff, that we do on the backend to make sure that when we get customers to the site, we are setting ourselves up for success from the standpoint of conversion. And we do a lot there on the digital product side of our business to ensure that we’re getting maximized customer conversion.
NYLP: Well you say it’s not sexy, but people want to know what’s the magic on the backend? Because you said in the first interview that really is important to you.
Brian: Yeah, it’s all about understanding and harnessing data to make decisions. And so for us, one of the big kind of winning strategies was developing landing pages that were specific to the types of creative that customers were seeing out in the world. So if we’re showing you an ad about the Vesper Polo, we’re dropping you onto a page that is really architected towards educating and converting you around this product and creating a minimal diversion, right? Like not distracting you with a whole host of other maybe awesome things, but things that are going to distract you, right? Because you have a nanosecond of time that you’ve allocated by clicking on our ad then we’ve got to make sure that we grab you in that moment.
NYLP: So, what percentage of a direct to consumer brand needs to be focused on getting these customers in and serving them in the right way, the ways that you’re talking about because it seems to be a significant part in addition to product innovation?
Brian: Absolutely. It’s at least 50% of our effort is really around kind of acquiring and engaging customers for the first time. And coupled with that, making sure that we create loyalty over time with customers who have purchased from us. It’s the only way to build your business, right? Because you don’t have stores, you don’t have wholesale deals, you are reliant on taking advantage of attributable marketing strategies and tactics to acquire and engage customers.
NYLP: So you talked about direct to consumer brands not having stores. However, one of the things that happened in the past two years since we last spoke to you is that you opened a store in Hudson Yards. Why did you decide to open up a store and why Hudson Yards?
Brian: Yeah, so, I mean when I said we don’t, you don’t have stores, I’m generalizing in that as by definition as a digitally native brand, presumably you believe that the most efficient way to access and retain customers is through largely an e-commerce relationship. But I think one of the things that is absolutely clear and that is you really need to be touching the consumers wherever they are. And so for many of us that have been around for a minute or two, that is not only a kind of a handful of really smart and thoughtful third-party retail partnerships or wholesale deals, but also in a case where it makes sense direct retail. You know, opening up and having your own direct retail experience. And for us it was really three things that brought that to life. We’d always believed that stores or a small handful of Mack Weldon branded experiences were going to be critical to kind of the next phase of growth and kind of brand for us. Hudson Yards was really opportunistic, but it represented all of the things that were important to us. First and foremost, putting our brand in the path of our customer. There’s hundreds of thousands of our target customers coming through that place on a weekly basis. And so the idea that people wouldn’t have to go out of their way to get our product and experience our brand was really critically important to making kind of the retail model work for us. The second was the way in which Hudson Yards thinks about the way in which Related, who was the developer at Hudson Yards thinks about the world, which was really around creating a community and an experience that was more than just a mall or retail shops and kind of a high end location. They’re really trying to facilitate connections and community amongst the retailers there and the food and beverage and the residential community and the commercial community that’s there. And so we loved the potential of being able to take the store further and provide kind of concierge services and hot next level clienteling experiences for people who are there. So that was the second thing. And then the third, was really the opportunity to activate the store on a very hyper local level. New York is a major market for us, so we have the opportunity to do customer events there. We have the opportunity to do press events there, we have the opportunity to do partnerships with other retailers that are there. And so all of those things together really made it a no brainer for us in addition to the fact that they were very enthusiastic to get us and kind of a cohort of emerging brands there that didn’t have a lot of physical retail presence.
NYLP: And you said retail experience in terms of describing your store, what do you think about as you’re building a store? Because the thing about Mack Weldon, which I found fascinating, is that you have found a problem in the market in terms of initially starting with underwear and underwear shopping, which we also talked about in our last interview, but in a store setting, stores are probably a little bit boring, staid people are talking about the retail apocalypse. What did you think about differently in terms of your store design to make it a retail experience?
Brian: There’s a few things that we do. I mean first and foremost, our store is we’re, our desire is to sell you product, right? So there’s other examples of guide shops or kind of entirely experiential retail moments. Our goal was to really ensure that customers who actually show up to the store can get the lion’s share of what we have there and walk out with it. They don’t want to, we’ll accommodate that as well. But generally speaking, our goal is to sell you product and make sure we’re exposing you to the brand. Just as we do on the website. So we start with doing as little as possible, keeping the merchandising as simple and straightforward as we can possibly do. And so we have it set up. It’s largely informed by how customers navigate the website. We have you know our bestselling underwear stories right up front. And then we have some seasonal moments and products that are relevant the time of year. And then we have as you get kind of closer to the back of the store and the cash wrap, we have products like some of our accessories and socks and things you can just kind of grab when you’re standing there. So just from a merchandising standpoint, it’s very thoughtful and it’s very data-driven based on what we see consumers doing on the website. And then we’re learning over time, right? We learn that a product that we think is particularly seasonal isn’t, right? We have a jacket called the Atlas Jacket. It’s a long sleeve, full zip, you know, great kind of mid weight, piece and it’s still selling really well. And it’s July. And so that’s pretty interesting cause we were thinking about taking it out but we’d love to keep it there. It’s a high priced item and customers love it. And then the second is tying it together thematically. We have an art installation in the middle of the store that really reflects, you know, the Mack Weldon guy. It’s kind of a three paneled fixture that is a nod to the old model car kits where you would kind of pop the pieces out. And not only do we have cast molds of our products in there, we also have other items that relate to the particular aspects of our guy’s life. So one panel is daily wear another panel is business and another panel is kind of active. And so it’s a way of kind of not only incorporating our product in an artistic way, creative way. It also we have a little fun there as well. And then we have this other thing that is just more of a customer engagement tool called Macman. It’s console game that we installed. That’s a riff on Pacman, where guys can compete and play and hopefully win prizes, which we run kind of on a monthly basis.
NYLP: What I also find fascinating is that in some sense everything old is new again. You’re a direct to consumer brand to kind of cut out the store, the retail experience. And yet now you’re in stores. Specifically, why is that important to a direct to consumer brand and your brand?
Brian: You can’t overstate the importance of a three dimensional experience. When a customer has a three dimensional experience with your brand, whether immersed in, you know, sight, sound, motion, human interaction, the impression of that, that that has is enormous. And what we’ve seen from our peers and what we’re seeing ourselves is that the value of customers that shop, that originate in store or shop online and in store is meaningfully higher than customers that only shop through E-com. And so we know that there’s kind of a lift that you get just by virtue of having that kind of multi touch experience. And so that’s really a main motivator to do it. We want to make sure that we’re holding all of our stores to the right kind of economic hurdles so that they’re viable and we’re not investing a lot of time and effort in something that isn’t ultimately accrued to our business model. But there is a lot of intangible value that we’ll never be able to capture, which just, you know, we see in kind of the customer behavior of people who shop in store and online.
NYLP: And so you mentioned some of the things that are important to your store design in Hudson Yards, the art installation, having an arcade game. What were stores doing bad that are going out of business that you’re trying to not do that helps you provide that lift that you talked about?
Brian: I think a lot of that just has to do with the fact that if your business model is predicated on, if your growth is predicated on opening stores, then it creates a construct that makes it very difficult when things aren’t going well in those stores. Right? It’s much harder. It’s much easier for us to turn off our marketing when it becomes inefficient than it is to close stores, right? And so you have all these fixed costs, you have all this inventory, you have all this build out, you have long-term leases, you have all these things that just make it really hard to like turn off. Right? And so if I’m a brand and I’m 1 store, 5 stores, 10 stores, 25 stores, 50 stores, 100 stores, and all of a sudden things start not going the right way for me to dial that back is really a challenge. And my whole organization, my whole enterprise, is set up to facilitate store operations. All these companies have websites, but their business is really oriented towards the physical retail experience. And so dialing that back and unwinding that is hard on a number of levels. It’s hard operationally, it’s hard from the standpoint of you’re shutting off revenue streams, even if they’re inefficient revenue streams, you’re actually consciously saying, I’m opting out of these revenue streams. So it just gets very hard. And then if you’re public that has additional implications. So I don’t think it’s so much what’s happening in the actual store level. I think it just has to do with the kind of way that many traditional retail businesses or brick and mortar retail businesses have been architected. I think if you had flexibility and optionality in leases and you could turn them on and off in a much more nimble way, the issues would be much lower than what major retailers are experiencing today. I think we have the benefit of we don’t live and die by our stores, right? So we could spend time being really thoughtful about it, right? We could spend time saying things like, we want to put as little as possible there to create a really easy customer experience. But if you’re, you know, J Crew or somebody or Brooks Brothers, you’ve got a lot of product, you gotta sell through that channel, you’re loading up the store, you’re loading up the inventory, and you’ve got to do your best job to sell it. So what happens when things don’t go well? You put it on sale and now you start training the customer to wait around for sales and it just becomes a really hard thing to unwind once you start going down that path. And so for us it’s easy for us to say, oh yeah, we’re putting up a store and it’s doing great. But you know, if we have 10 stores that are doing really well, it’s still 10% of our business. Right. So like it’s not a huge deal.
NYLP: What are the metrics that you hold your stores to? You said there are certain economic hurdles.
Brian: It’s the four wall economics of the store. We want all of our stores to be profitable in a reasonable period of time. What that is. I don’t have enough basis to say, I can tell you that Hudson Yards will be handsomely profitable in the first year if things continue the way that they are. So great. Great job on that. And then all these other ancillary things, right? Like the behavior of customers that are in store and online shoppers, what is their profile look like versus a customer that is purely an E-com customer. That’s something that we’re going to be tracking and measuring as we kind of get into this, right? We’re only a couple of months into it, but really understanding how those cohorts behave versus our others. And that’s objective. We’ll be able to measure that very clearly. And then the third is really all of the kind of brand activations and partnerships that we’ll be able to do that hopefully result in not only kind of local engagement with whomever we’re trying to talk to, whether customers or press or you know, people who are shopping in the center. But also just the PR that that generates and the overall impressions that we get as a brand resulting from that.
NYLP: And you know, in addition to the competition that you have from direct to consumer brands, perhaps the biggest impact that is noticeable is that the big guys are starting to mirror you a little bit. Seems like Hanes has come up with like a more comfortable boxer brief as opposed to the cardboard that they had before and that Banana Republic is launching a direct to consumer brand that seems to mimic your aesthetic a little bit. But how has the competition from the big players in the market affected the way that you’re thinking or competing with them?
Brian: I think in the case of a mass market brand like Hanes, it’s hard, right? I mean I think there’s customers who, I mean we see when we survey our customers and we asked them where they’re coming from. Interestingly and kind of to my excitement and surprise number two on that list was Hanes. So you’re talking about guys who were buying a mass market, kind of low price point product and trading up to ours, which is like a huge thing, right? Cause the opportunity there in that kind of price point is so much bigger than, for example, guys who are trading from Calvin Klein to Mack Weldon cause it’s more of a comparable price point. I think it’s hard.
NYLP: Was that number one on the list, Calvin Klein?
Brian: Yeah. I think it’s hard for just a mass market brand through their existing brand to kind of try and do what we’ve done for a whole variety of reasons. But mainly just because it’s just going to be hard to kind of capture a customer who’s already bought into kind of what we’re selling them and then have them kind of trade back down to a brand like Hanes. Not that Hanes isn’t a great brand and they haven’t done amazing things over the course of time. I just think it’s much, uh, the opportunities for us to pull from them. And I think for them to pull from us is just going to be much more challenging. If anything, maybe they’ll create more stickiness in their existing customer base, but it just gets hard, right? Because so much of their distribution is through third parties and Hanes is filling a very specific need for them and their assortment and their merchandising mix. So for them to go up price point, now they’re competing with the likes of Calvin Klein, PVH, us, others, you know, big major licensed brands that are higher price point. And for the Banana Republics of the world, again, I think it’s being a digitally native brand, is hard and I think a lot of it has to do with where you start. So it’s not that any of these companies don’t have the resources to launch a business like ours. It just really has to do with like what your DNA is, what your orientation is, what your talent profile looks like. And it just, it’s just harder to do. I’m going to be interested to see, Gap launched an athleisure brand called, I think it’s called Hill City will be interesting to see what kind of attraction they get, whether or not customers view that as authentic because a lot of it also has to do with the story, right? The origin story, the authenticity. Because we’re able to speak directly to customers. We have the benefit of telling that story and if people know a major corporation like the Gap is behind it, will it resonate in the same way? I don’t know.
NYLP: How is fashion changing? Because it seems like you hit on something as you launched Mack Weldon with the basics, but there’s certainly a drive to be more casual. It would seem Goldman Sachs, you don’t have to be business formal anymore. A lot of startups, I imagine people there are wearing your products. How are you thinking about fashion? How have you impacted fashion and style and where do you see that going in the future?
Brian: I guess the good news for us is we don’t play really in the fashion game all that much. We think about essentials. We think about reinventing the basics, things that are kind of core to your wardrobe. Fashion, luxury goods, I think it’ll be interesting to see how millennial shoppers regard those types of brands as they mature and have more disposable income. It seems that now brands like Everlane, which I would call kind of a fashion basics brand, you know, their story resonates a lot primarily because of the authenticity and the story that they’re telling to customers. What does that look like in their late thirties, forties and onward? Are they moving on from that and trading into the next thing and does it start to feel like everyone reverts back to some of these more legacy brands? I’m not sure. I think luxury is still seems to be, you know, doing really well, but I don’t even know over time how that works. Right. Because one thing I feel pretty strongly about is that the whole way of shopping and department stores and these kinds of massive kind of collectives of brands driven largely by department stores. I think that model is really going to go away.
NYLP: And so what are you doing in addition to thinking beyond the department store to prepare for that future? What do you think about?
Brian: Yeah, we love, you know, we have a couple of small partnerships on the retail side that, that really I think highlight how we think about things. I’m not sure that there’s enough there to say, oh, we’re going to build a gigantic business model off of this. But Equinox is a good example. They’ve been an up close retail partner of ours since we launched and you know, our guys are, their spending time doing other things and so if we can, you know, be there, and make it more convenient for them to shop for our products or get exposure to our brand. That feels really good. They have a lot of locations. It’s not a place that people go to shop per se, but we have found that from a brand perspective and from a loyalty perspective when customers run into us there, it creates a lot of credibility to us as a new brand. And so that’s been really great. We’ve done some things with J Crew, Todd Snyder, who’s a pretty well known men’s wear designer and is known for collaborating with other brands, Champion, Converse, us, others. So sort of kind of a niche but a lot of credibility there. Stitch Fix is a big retail partner of ours, which we like because they’re exposing guys to brands, not just their own brands but other brands. And so if a guy gets Mack Weldon in their box or a guy chooses Mack Weldon to be a part of their box, that’s great because our assumption is that they’re going to learn about us there and then, you know, come dive deeper with us directly.
NYLP: What about J Crew, they seem to be on the legacy side of things?
Brian: Yeah. J Crew I would say it was 50% good, 50% bad. The 50% that was good was when we sold core Mack Weldon product there in Q four. We had a really good run selling our 18 Hour Jersey Boxer Brief program there. The other part of it was some unique product that we developed which fit really well with them and their aesthetic. It didn’t work out for a whole variety of reasons but mainly for us, our sort of issues were just sort of how we were positioned in the store. Like we were really going for a major kind of visual merchandising moment. And you know, again, I think they have bigger fish to fry quite honestly. And maybe the timing wasn’t so great, so I don’t know that it’s kind of off the table that we would do something again with them. But I think in order for us to do something with them or anybody like them, we would really need to feel very, very, certain about how the brand was going to be positioned within that environment.
NYLP: And so you’ve come back on to the New York launch Pod two years later from your first interview, where do you see Mack Weldon two years from now, maybe five years from now?
Brian: That’s a great question. The two things that I think you’ll see more of is you’ll continue to see us thoughtfully diversify the offering, right? The product offering into other kinds of essential categories. And so there’ll be some things happening there. I mean you wear polo shirts when it’s warm and you wear Oxford shirts when it’s cooler in the Fall. So there are some things we have in the pipeline that are going to be interesting, but again, non-fashion, kind of essential items, things that guys kind of stock up on each season wear as kind of the part of their core uniform. On the distribution side, I mean, the two big things for us are retail. We’re having a great experience at Hudson Yards. If we could do more experiences like that in some of our key markets, our intention is to do that. We see it as kind of rounding out the picture, certainly domestically for the brand. And then the third is really international and how we think about bringing the brand into other markets. I mean e-commerce really you know, flattens things out. And many of the things that we’re set up to do: digital product, digital marketing, data analytics, you know all those things are core competencies of ours and you know, the learning curve to apply those areas of expertise to non-US is, is relatively low. Right? And we can extend that expertise to building businesses in those markets where there’s customer appetite where there’s less, you know, kind of competition for customer mindshare and obviously a huge opportunity, right? Cause these are markets that are, you know, on the rise and growing and in some cases faster than the US.
NYLP: So, do you want to preview any of them for our international listeners?
Brian: Well Australia, New Zealand are first on our list for a bunch of reasons, but they make it really easy, you know, shipping and fulfillment and duties and things like that that create a hurdle. And then of course western Europe is particularly interesting for us. And then on from there.
NYLP: Well that is a wonderful note to end things on. Brian Berger. Thank you for stepping back on the New York Launch Pod and sharing your time with us.
Brian: Thank you so much for having me. And congrats on all the success. We’re both still here!
NYLP: We’re both still here. How do people find out more about Mack Weldon, what do you want to pitch?
Brian: www.mackweldon.com M-A-C-K W-E-L-D-O-N as well as Hudson Yards. We’re on the second floor. It’s called the Floor of Discovery. We’re in a great spot right in between Beta and Citarella and Blue Bottle Coffee. So right in kind of one of the main corridors in the most exciting area of the shopping center.
NYLP: And if you want to learn more about the New York Launch Pod, you can follow us on social media @nylaunchpod and visit nylaunchpod.com for transcripts of every episode including this one. And if you’re a super fan, Brian Berger, are you a super fan of the podcast?
Brian: Absolutely, yes.
NYLP: If you’re a super fan like Brian Berger, please leave a review on Apple Podcasts. It is greatly appreciated and does help people discover the show.
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