Indochino is on a growth mission — and it wants that growth to happen inside shopping malls.
The made-to-measure suit retailer, known for its tech-forward showroom style, will open eight new showrooms in the U.S. and Canada in 2017, bringing its store total to 18. The company, whose suits cost around $400, is focusing its expansion in two areas: opening second (and sometimes third) stores in its biggest markets and moving into vacant spaces in shopping malls.
You have read the maximum number of free articles.
Already a member?
This content is available exclusively to Glossy+ members.
In 2016, Indochino opened three mall showrooms in Canada: one in an upscale suburb of Ontario, one in Toronto and one in Ottawa. CEO Drew Green, a Canada native, admitted that Canadians’ shopping habits and relationship with the shopping mall are different than Americans’. However, that’s not stopping Indochino from laying down its retail footprint in American malls. It’s targeting luxury centers as well as malls right outside of cities, like King of Prussia in Pennsylvania.
“We’re not expanding blindly,” said Green. “We want to eventually get to 150 stores, and I think we can get there by working with top-tier malls.”
Malls seem to have gained a new lease on life thanks to online retailers like Indochino, Warby Parker and competitor Bonobos.
As Green indicated, not all malls are created equal. Developers are investing resources into updating properties in high-traffic areas that are centered around attractions like restaurants, markets and fitness centers, rather than department stores. While old mall brands are going under, buzzy e-commerce pure plays are being pulled in to jazz up the mall offerings, bringing them into the 21st century. For the online brands, opening up a storefront in a mall requires less heavy lifting.
“[Building in] malls can be cheaper than building a standalone store,” said Ken Morris, principal at Boston Retail Partners. “It’s a destination site that already has the infrastructure in place, and that makes it quicker to pull the strings. Otherwise, it can take forever to get approvals.”
For Indochino, opening up a new store costs one-tenth of what it would cost a traditional retailer, according to Greene. The company, which shipped 50,000 made-to-measure pieces in the month of December, doesn’t house its product lineup. In-store customers, who visit by appointment with a showroom guide, browse fabric swatches and get measurements. Indochino doesn’t pay for the fabric until it’s cut, which Green points out eliminates the need for markdowns and waste.
“People aren’t getting a lot of personalized, high-touch experiences elsewhere, and that in-store experience gets fanfare. After being in store, people are more comfortable buying online. It’s become an acquisition channel for us.”
Green said that online sale growth rates are twice as fast in markets where Indochino has physical stores.
“When you have more touch points as a retailer, you’re more connected to customers,” said Jane Hali, CEO of retail research investment boutique firm Jane Hali & Associates. “It’s a halo effect for e-commerce in the area where there are stores.”
Indochino uses its customer profiles to determine its top markets for store openings. Right now, Green is focusing on the top 30 markets as it moves to opening 150 stores by 2020. In that same timeframe, Indochino hopes to hit 1 million made-to-measure suits.
“Scale is one of the reasons why technology is so important,” said Green. “But I love the in-person retail part of our business, because I’m focused on customer experience. There isn’t a match to touching the fabrics and working with an expert.”
Get news and analysis about fashion, beauty and culture delivered to your inbox every morning.