Like a lot of retailers today, custom-made menswear merchant Indochino is working to put in place an omnichannel sales process that blends the best of the web with physical stores.
Unlike large retail chains that are closing stores and overhauling technology systems, 9-year-old Indochino is using data collected online from Indochino.com to determine where it opens stores and the messages it presents shoppers across sales channels.
Indochino, No. 454 in the Internet Retailer 2016 Top 500 Guide, operates eight stores in the United States and Canada, and Pilar Catala, director of omnichannel digital experience for the retailer, says it hopes to have four or five more open before the holidays. Indochino stores, however, are showrooms rather than locations where consumers buy off the rack. Shoppers can see products, but as most of what the merchant sells is custom made, clerks process orders with an iPad or iPod Touch. Goods are delivered in about four weeks.
Indochino.com transactions account for a little more than half of total sales, and sales facilitated through stores account for just less than half. But store sales nearly always involve the web in some way, Catala says.
“The online business is the big anchor,” she says. But online sales aren’t as rich as store sales—the average order value online is about $100 less than orders placed from a store, declining to specify actual average order value. Visits to Indochino.com drive visits to stores, where shoppers can touch the fabrics and get a better sense of the fabrics’ qualities, and staff provide assistance that can lead to higher order values. “The tactile part of the showroom experience is lost online,” Catala says. “Online it is price that drives the experience.”
Using geolocation technology from personalization vendor Qubit, Indochino.com automatically shows web visitors where the nearest store is, when it makes sense to. It generally sets a 50-mile radius. If a shopper is beyond that, the site doesn’t automatically display store information.
Indochino and the Qubit technology also record how the visitor arrived at Indochino.com and uses that to customize what products and information he sees. For example, if a consumer arrived after a Google search for tuxedos, the Indochino home page message will automatically focus around formalwear. Often a tuxedo seeker is getting married or going to a wedding, so Indochino will ask the customer about the event, such as when and where it is going to take place and how many groomsmen are involved. That data, along with data on what products the shopper views, is collected and used on subsequent visits to personalize what the shoppers sees. When a consumer is near a store, it also launches an appointment request module that urges the consumer to visit.
“By the time he gets to the showroom there is a lot of data already collected that gives us legitimate touch points for the customer,” Catala says. Indochino attributes a 4.2% lift in revenue per customer to the technology and personalization program, and Catala says she expects to see that lift continue to rise as Indochino collects and leverages greater amounts of data.
The data collection program also helps Indochino determine where it will open its next stores, which is different than how it selected retail space a few years ago. In 2011 Indochino launched what it called its “traveling tailor” program, and took over vacant retail space in prime areas for two to three weeks at a time. Often, where the tailor went next depended on where space was available at the right price, co-founder Kyle Vucho told Internet Retailer at the time. The pop-up shops helped Indochino introduce itself to customers but were largely meant to drive future online sales. With the traveling tailor shops, consumers had their measurements taken and were urged to visit Indochino.com to buy. The retailer stopped using the tailor after it began opening permanent shops about three years ago.
Today, Indochino takes a more measured approach to store openings. For example, it has a store in downtown Toronto’s business district, and men working in the area shop there but live in the Toronto suburbs. Having collected that customer information, Indochino’s most recent store opening was in an upscale mall in Mississauga, Ontario. Catala says that store now catches those customers in the evenings and on weekends, and also draws in foot traffic that goes beyond the downtown worker demographic.
Catala says the company isn’t worried that stores are going to take away from online sales—so far they’ve worked in concert to grow sales across the board. “At first we were concerned that opening a store would cannibalize our online business in that marketplace, but we found it really compliments each other.”
Indochino has raised $47.25 million in funding to date, including a $30 million round this spring led by Dayang Group, a Chinese apparel manufacturer. Its showrooms are in Toronto, Vancouver, New York, San Francisco, Philadelphia, Boston and Beverly Hills, Calif. London-based Qubit, which was founded by ex-Google employees, also got an influx of funding this year, with $40 million coming in a round led by Goldman Sachs Merchant Banking, bringing the 6-year-old technology vendor’s total to about $75 million in funding.