AYR, the direct-to-consumer brand for women’s apparel, has an origin story that sets it apart from the sea of other digitally native brands selling women’s clothing without the middleman. For its first two years in business, it was incubated by the more mature direct-to-consumer brand Bonobos.
“We were fortunate to have met [Bonobos CEO] Andy Dunn, who’s a pioneer when it comes to creating digitally native brands,” said AYR co-founder Maggie Winter. “He allowed us to incubate AYR, giving us the opportunity to build a brand and also to learn from Bonobos’s experience. We got to benefit from the wisdom of a first-generation direct-to-consumer brand, beyond just the stuff people say in interviews: the external changes, struggles, wins, challenges and so on. Seeing that play out in real life gave us a big advantage.”
When Bonobos decided it needed to focus on its core business in 2016, AYR spun off into an independent brand, raising two rounds of funding and hiring a full team of employees in the business development, fulfillment and finance departments to pad out what Bonobos’s infrastructure had been supporting.
More than a year into running her brand independently, Winter joined the Glossy Podcast to discuss the benefits of being bred by Bonobos, the lessons she’s learned so far and the opportunity that still remains for direct-to-consumer brands.
On the first generation of direct-to-consumer brands
A lot changed between the first and second generations of direct-to-consumer brands. Winter pointed out that when AYR started in 2014, Bonobos was already a seven-year-old company, and now-established business strategies like social media marketing were just on the cusp. While direct-to-consumer brands are now popping up all over the place, Winter credits those first brands for proving the business model, but said that managing expectations is key.
“We owe it to the Warbys and Bonobos for proving that it’s possible to build a beloved brand digitally. The fallacy is that success hinges on infinite triple-digit growth,” she said. “When you go down that path, you are diluting your brand. Forcing it to be broad from the beginning is counterintuitive to starting a brand online in the first place.”
On pitching new product to customers
Regardless of how played-out the direct-to-consumer model may feel, there’s inherent value in building new brands on the back of a strong connection to customers, rather than wholesale buyers.
“The world doesn’t need more product. If you can connect directly with your customer, that will set you apart,” she said. “It’s the emotional quotient. Great product is table stakes, but at the end of the day, we’re not just selling clothes, we’re selling confidence.”
On the opportunity left open by traditional brands
Winter said that while a direct-to-consumer brand shakeout may be coming, the reason so many new brands have been inspired to launch is because traditional brands haven’t changed quickly enough. They’re not working with the customer in mind, and they’re cutting back on product quality to improve margins.
“The brands who we grew up with aren’t growing with us. It’s a tough climate, and brands that aren’t doing well are the ones that aren’t connecting to customers,” she said. “They’re creating product for Bloomingdale’s instead of their end customer. Then they’re cutting quality. Who cares if something is 40 percent off, if the quality is 60 percent worse? The customer can see through that today.”