The Rise of the Boutique Brand Economy

‍Emily Lane 00:09 

Welcome to Clothing Coulture. I'm Emily Lane. 

Bret Schnitker 00:12 

I'm Bret Schnitker. 

Emily Lane 00:13 

We speak with experts where we explore the global dynamics that shape trends in the fashion industry, 

Bret Schnitker 00:19 

Brought to you by Stars Design Group, a global production and design house with over 30 years of industry experience. 

Emily Lane 00:36 

Welcome back to another episode of Clothing Coulture. Today, we are going to be exploring the topic of the rise of the boutique brand economy. Welcome back, Bret. 

Bret Schnitker 00:47 

Hey, thanks, Emily. 

Emily Lane 00:48 

So, that sounds like a pretty fancy title, boutique brand economy. What does that mean? 

Bret Schnitker 00:55 

You know, it's interesting, I would say that it's sort of an analogous to, farm to table in the food industry, micro-breweries to the big brands, it's finding its way into the apparel industry. And I think that, you know, there's a lot of excitement with Gen Z for brands that have a story to tell, that are, fresh faces in the industry that, that are learning to bootstrap and develop, what they consider niches that are voids in the industry and support, a lot of them are supporting social agendas. And it's kind of an exciting space, I think, for a long time, a lot of the industry looked pretty similar. And with this rise of this new boutique economy, there's a lot of intelligent, production going on. And certainly, there's some that's not so intelligent, but I think that, you know, that's a learning curve for a lot of those different groups. But there's some that really, very innovative. 

Emily Lane 02:07 

When you talk about some that maybe aren't so intelligent, what are some key things that they're missing? 

Bret Schnitker 02:12 

It's experience, mainly, they see an opportunity when they dive into the business, some of many of them, but you know, we've talked to have never been in the apparel business before. And I think that people simplify this business, they simplify the manufacturing aspects, and the technical aspects. And I think shortly into their apparel life, they start to recognize some of those important key features that that, they'll need to adjust on the fly. Certainly, 

Emily Lane 02:43 

Yeah, I've definitely seen a couple of those scenarios where they either come into the industry, for the kind of the sexiness and allure, thinking about the high fashion days, and the images in Vogue magazine, and that gets everybody kind of excited. But then there's also some, as you say, that kind of openness oversimplify it, and they're like, Oh, you know, I can innovate this hoodie, I can do a better yoga pant, or, you know, and I think that there lies a big problem and not having that distinct voice. Because as you were talking about, people want to connect with these brands. And so, they're coming in with a game plan of, you know, I've, I've looked at the price of yoga pants, and wow, I could produce something and make a little detail make it better. 

Bret Schnitker 03:33 

Yeah, 

Emily Lane 03:33 

you know, it kind of creates this false sense of what it really takes to create a successful business. 

Bret Schnitker 03:38 

Yeah, in many cases. I think so. 

Emily Lane 03:40 

Yeah. So what are some? What are what some kind of key advice that you would give, as somebody came to you and said, I've got the next great idea, I want to get into this industry, I have a powerful story is how I'm going to align with this great mission. I already have any audience. How do I get going at this? 

Bret Schnitker 04:03 

Yeah, I think the answer would probably vary based upon their experience and expertise in the apparel field. We, like I mentioned before, I think we find a lot that are new to that field. And I think, really doing a deep dive on a business plan. Look, I'm a creative at heart. My experience in history, early history in in the apparel business was certainly creative. But I learned over time to really appreciate the importance of numbers and planning. And it's not that a business plan is all numbers, but really asking yourself those challenging questions about, is this niche really a niche that others will resonate with, thinking through all those steps because it is a challenging industry. There's a lot of noise out there. There's a lot of people vying for that, and consumers, heart and mind. And I think you've got to really think through your strategy effectively, most of the time, we don't really think about those investments into apparel, but I'm in a typical investment size can be, certainly as minimum as a nice car, but can be equal to over a year to a pretty sizable house. And so, you don't go into those decisions lightly. And I think taking the time to understand and develop, even though those plans change, people believe Why should I bother with this plan in a startup? Because I really don't know what the answer is gonna look like a year from now. That's not really the purpose of a plan. It's about some guidance. It's about understanding your mission statement, your vision statement, what am I you know. They're the steward of their plan, and their future and their and their brand. And I think those plans help them identify, I'd say, that's a really important first step. 

Emily Lane 06:04 

I agree with you. I've worked with many startup ventures throughout the years. And every time you bring up the importance of a business plan, it just kind of everybody kind of deflates there. They get deflated by this. And look at it with kind of this loom of terror. But it is so important, because it really helps you take a real hard look at the industry, the opportunity, how your niche fits into that opportunity, helps you map out your voicing, and your brand, all of which is becoming, it's always been important, but more important, I think, now than ever, because of this desire for people to connect with the brand. So really understanding who you are and how you're different is key. 

Bret Schnitker 06:56 

Yeah, I agree. I think sometimes technologies changed, which opened the door for opportunities that I think our industry and economy that technology has evolved, where the online business has become more relevant than at any time ever before certainly COVID, accelerating some of that. But at the same time, that door opens to that technology and the ability for more people at different levels to interact directly with a customer, we call it DTC direct to customer business. It also presents its own set of unique challenges; you've got a lot of people going down that path. So, you've got you know, it's become a science, today to separate yourself and your voice from others for sure. 

Emily Lane 07:46 

What are some common misconceptions? 

Bret Schnitker 07:50 

I think the most evident that comes to my mind, as you know, I build it, they will come I have a great idea didn't go out, throw it on the internet, and people are going to come in mass and buy this, this particular item or concept or brand or whatever. I don't think there's a substitute for time. In most businesses, building brand equity is important. And that takes kind of a consistent interaction and communication with your customer. And it needs to be consistent over time. Right. So, I think that's a really key one. The second one is this, this business is easy. I could go to Alibaba, I can connect with a complete no name stranger, I can show them a drawing, and they're going to deliver me a product that's going to be marketable. And meet my requirements. I think there's a growing requirement for quality. And I think that today more than ever, that one-to-five-star rating, that immediate feedback from the customer kind of makes or breaks you. And so really understanding partnering with someone that really understands these different elements, critical elements of the garment business, can be important. And I think that comes down to the fit or spec of a garment, the translation of that fit to the consumer, the different quality attributes that kind of match the demographic you're going after. Those are pretty common misconceptions that are things that people don't really spend a lot of time thinking about as a startup, if they don't have a ton of experience in this industry, 

Emily Lane 09:33 

You mentioned fit. And I look at some of the companies that we've looked at and that have, we're looking for advice on how to improve their product and so many of them have made the mistake early on about not making good fit decision, using themselves as fit models because they're the perfect large or you know, and then scaling out from there. So that is I can see a critical a critical one, what's some advice that you have for people in that space of fit? 

Bret Schnitker 10:10 

Yeah, it's interesting, I think, for years when we are at a brick-and-mortar environment, vanity sizing ran amok. 

Emily Lane 10:17 

Everyone wants to be a zero. 

Bret Schnitker 10:19 

I don't know if I want to be zero. But I get your point, I'd certainly like to get a couple sizes down from what I am. But I think, in a brick-and-mortar environment that can be effective, you make people feel good about themselves, albeit what we call what fake news. But I think when you get into an online environment, that doesn't serve an equal purpose, in fact, it can work against you, I think, returns some cases, some reports as high as 20% 30. Yeah, can really devastate profitability on those items that are returned. So, controlling return rates, and making sure the customer certainly is satisfied. So, they're giving you a fortune five-star ratings are more important. And so fit is something to really concentrate on. And transparency, communication, of that fit. And I think, you know, working with a competent person on fit, employing companies out there that bring science to fit, like Alvernon, they're amazing company, they scan 1000s of bodies around the world using algorithms to create kind of these unique body types and information to ensure that, the majority of customers that you're selling to are happy with fit is important. And then there's a ton of technologies today that are occurring, although they're in their infancy, and I think that technology is going to improve over time is these, you take your phone, you take a photograph of your body, it automatically calculates your measurements, and then it tells you based upon specific brands that have put the information into that particular branded technology, what size you should fit, and my fits one of them, there's my size. I think there's a number of them that that are out there that that are evolving. And I think with the technology growth that we've got in our phones today, the latest generations are using LIDAR technology, which is kind of a 3d scanning kind of attribute you can really helps read those surfaces and shapes much more effectively. And I think that will go a long way to help improve some of the challenges. 

Emily Lane 12:41 

Continuing down this path of some of these misconceptions. We heard a new company say that luck, they were depending on luck to be a part of the formula of success. And I think that they're not alone in that. 

Bret Schnitker 13:04 

Sure. Certainly, Lucky Jeans thought so. I would say that while luck can play a part in it. That's an exception to the rule. I think that I would not put in my business plan that luck is going to get me where I need to go. The stories that I have heard about a number of brands big and small. If you go back in history, it's about hard work, perseverance, perseverance. Laser focus on what you want to do. Laser focus on brand stewardship, over a period of time and doing that consistently and well in developing an audience. And continuing to resonate with an audience over years is really more of a signal of success than luck. 

Emily Lane 13:53 

Right? I mean, it's with any business. Sure, it's having realistic expectations about how long it takes to be a viable and profitable business, three years, five years is not uncommon to make that mark where you're able to sleep at night. 

Bret Schnitker 14:12 

For sure. 

Emily Lane 14:12 

Right. So, I think another kind of interesting topic. You know, when we've had conversations with startups, they'll say things like, I'd like to make sure a manufacturer in the United States, because I'm going to get a better-quality product. I think that would be one of those in that misconception category. 

Bret Schnitker 14:36 

I think depending on the category, I think there are certain industries that the United States has protected and grown. I'm gonna do some advertising for Ford Motor Company, I look at them. And I think over the years, when I looked the technology built into Ford Motor Cars, they're impressive. I mean, they build a good car. But in the apparel industry, America really abdicated their apparel business years ago, and while there are competent manufacturers in the United States, 

Emily Lane 15:05 

We know many of them actually, 

Bret Schnitker 15:06 

Yeah, it's not an industry that is a strong, robust, vibrant industry in the US. And so, it has its limitations. One of those limitations are labor costs in apparel, it's one of the categories that have not had an inflationary increase in cost, since I think the 80s. And possibly, it's astounding. And so, it puts a lot of downward pressure on costing everyone talks about how glamorous the business is, and certainly at certain levels, it can be there's some really great brands out there that can use some fantastic fabrics, but the mass part of our economy is managing labor cost. In we're generally in third world countries, or developing nations, where apparel is an important part of their industrial path. I think when you look at Made in America as a concept for apparel, the garments will tend to be very, very expensive. And then there's just limitations on fabrics and, and expertise on a mass mark in the US. You have to make your decisions. If that's part of your value chain Made in America, then I think, strategizing and organizing your partners along that vein would be really important. 

Emily Lane 16:32 

Absolutely. So, having an understanding that not manufacturing in America doesn't mean reduced quality. It's just a different value. 

Bret Schnitker 16:43 

Well, it is. And I think that's also changing really talking about Made in America, one of the exciting parts of what's occurring. Even here in St. Louis, is with the advances in technology, there can be the ability to nearshore, some apparel, manufacturing, it's a big conversation today about nearshoring, bringing businesses that have been long gone in the us back to the US. There's a company here in St. Louis called Evolution Manufacturing really good relationships. We're certainly an investor in that in that group, but they've invested in, I think, the latest, greatest technology, under one roof was STOLL knitting machines, and whole garment knitting. And I think it minimizes the labor cost in general, and allows us to be more competitive, in addition to really doing some amazing things that these machines can do that you can't typically do in other parts of the world. 

Emily Lane 17:51 

Thinking about these boutique brands that are on the rise, are there any that are in your mind that you've seen kind of grow up along the way and feel are really doing it? Right, that could be good examples for people to look at. 

Bret Schnitker 18:05 

I'm a tech junkie, companies like Vollebak out of the UK, Ministry of Supply, they're MIT guys. Personally, those are brands that I really have an affinity toward, because they're using some mind-blowing technologies that exist in fabrics and changing kind of that landscape of that. But I mean, there's just an endless supply of these other brands that, that represent different niches in the industry. And it just many times too many to tell. But there's a lot of them that I really respect. 

Emily Lane 18:42 

Well, thank you for sharing your insights. Do you have any other thoughts you would like to impart on those who are pondering the early stages here of maybe starting their own brand? 

Bret Schnitker 18:54 

I think I would urge them to really be methodical about that thought process emotions can run high when you want to start a new business and, this is just like other businesses. It takes a real methodical approach and an intense focus on partnerships to ensure that your vision becomes real. So, I think that's really important as you start. 

Emily Lane 19:28 

Great advice. Well, thanks again for joining make sure to subscribe as we are going to be discussing this topic in a little greater detail in an upcoming episode. 

Bret Schnitker 19:37 

Thanks, Emily. 

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