Community Is Core to Next-Gen Brands

NEW YORK, United States — Oroboro, a purveyor of art-teacher chic in Williamsburg, Brooklyn — the unofficial capital of said chic — is the kind of boutique that sells loose-fitting linen garments in earth tone shades and knits in makeup hues from the likes of Black Crane, Electric Feathers and Lauren Manoogian. Independent retailers like Oroboro host events for their (equally) independent designers at a steady clip. However, it's fair to say that textile-heavy-line Ace & Jig's "swap party," which took place on a Saturday morning last December, was its most unique to date.

After all, Ace & Jig founders Cary Vaughan and Jenna Wilson, longtime colleagues and friends who launched their first collection in the fall of 2010, were not there to simply sell their beautifully made, contemporary-priced clothes. They were on hand to facilitate the secondary market that has developed around them, driven by the limited-edition, collectible nature of their garments. Ace & Jig creates about 50 unique yarn-dye woven textiles a year, fashioning new and recurring silhouettes out of these highly covetable fabrics. They sell those pieces on their own website and to 150 partners globally, including Barneys New York, Matchesfashion.com and Beams Japan.

Vaughan and Wilson say they have been able to grow the business assuredly but steadily — approaching $5 million in annual revenue for 2017 — because of the community that has sprouted around them, with 80 percent of their e-commerce customers coming back to buy something a second time.

There are 37,000 public posts containing hashtag “#aceandjig” on Instagram, with associated tags including “#aceandjigregrets,” which conveys a fan’s lament about selling or trading something that she now wishes she had kept close. Instagram is where fans of the brand can search for in-demand “#unicorn” pieces that are difficult to find on the secondhand market. One such #unicorn — the “Gallery Dress” in oxblood from the Fall 2013 season — originally sold for under $300 at retail but was acquired on eBay in 2016 for around $1,400.

Out of these #unicorn searches came unofficial swap parties, hosted by Ace & Jig fans across the country. Now, Vaughan and Wilson stage approximately six of their own events a year, where guests can swap pieces, buy new ones and get old garments repaired on site. At the Oroboro party, community members came from as far as Toronto and Atlanta to catch up with fellow fans they now consider close friends, as the tag #aceandjigfriends can attest.

“We talk a lot about things that aren’t clothing related,” said Wendy from Park Slope Brooklyn, who spent most of the afternoon wearing a duster she eventually bought, standing over a pile of garments that she had laid claim to. “For instance, it just happens to be the case that both Katy” — the fan from Atlanta — ”and I are both huge fans of ‘Gilmore Girls.’ We discovered that after meeting because of our love of these textiles.”

They have formed this awesome community where they really support each other. It's become kind of a movement.

This autumn, Vaughan and Wilson will take their team of six employees on a week-long road trip, hosting events and meeting fans along the way. “Brand loyalty is not a problem for us. The people who love our brand really love it, and they’re very loyal and they’re very engaged,” Wilson explains a few months after the December party. “They have formed this awesome community where they really support each other. They have dinner, they connect with each other, they travel to see each other, they do all these great things together, and so it’s become about a lot more than just a shirt. It’s becoming…. I don’t know, for lack of a better word, kind of a movement.”

Brand loyalty has never been tougher to attain, thanks to an increase in choice at every price point, and immediate access — driven by e-commerce — to those choices. Among the top 100 consumer-packaged good brands, 90 percent experienced a decline in market share in 2015, according to research firm Catalina. And it may be even more difficult for mid- and high-end apparel brands, which now compete with the well-made, right-trend players at the low end that make consumers feel savvy for spending less on more. According to a 2015 survey conducted by LIM College, 45 percent of millennials say that “nothing can be done” by fashion brands to retain their interest.

And yet, a crop of emerging labels are bucking the trend by doing more than just transacting with customers. From Goop (which sells out new-fangled items like “jade eggs” to rapt followers of actress-turned-guru Gwyneth Paltrow) to Glossier (which develops its products through community feedback) brands savvy enough to cultivate a sense of purpose and belonging — to establish a deeper reason for existing — are flourishing. An empirical study of the financial impact of online communities on commerce, conducted by the University of Michigan, found that engaged consumers spend more money. One retailer saw a 19 percent bump in “incremental revenue” from customers after they join the site’s online community.

More than anything, though, community-driven brands have better success with customer retention.

"Community-led brands are completely central to what we do," says Frederic Court, founder and managing partner at Felix Capital, a venture firm whose investments include Goop and Farfetch. (Disclosure: Felix Capital is part of a group of investors that has a minority stake in BoF.) "In the past, dialogue with your customer was through third parties: advertising, magazines, wholesaling your products to different types of retailers. Today, with digital, brands have this unique opportunity to engage directly with the consumer."

While brands used to dictate trends and must-have products to consumers, the “dialogue,” as Court puts it, is now two-sided, facilitated by digital platforms such as Instagram. Take the case of Anine Bing, a Los Angeles-based label launched in 2012 as an e-commerce site by its namesake founder, a Danish blogger who began modelling at 15. “I got onto Instagram really early, and I quickly saw the opportunity to sell product that way,” says Bing. “I launched a web shop and I was wearing the clothes myself and on Instagram and the blog.”

With more than 455,000 Instagram followers and a celebrity cadre that includes influential stars like Kendall Jenner, Alicia Vikander and Jennifer Lawrence, as well as Bella and Gigi Hadid, the brand now sells at over 250 retail outlets worldwide, including Net-a-Porter and Shopbop, and eight of its own stores in cities including New York, Paris and London. With revenues in the low-double-digit millions, the business is doubling organically year-over-year; no Instagram or Facebook ads. "Anine's followers are extremely loyal, and I think that's really where the secret-sauce lies," says chief operating officer Annika Meller. "We see that through our customer service. When they write to us, it's almost as though they have this private relationship with Anine."

The brand also capitalises on that symbiotic relationship by operating a “see now, buy now” model. If Bing is wearing something on Instagram, rest assured her fans can buy it right then.

The quick-turnaround extends to production. The label’s garments — manufactured in Turkey — can be ordered and shipped in a matter of weeks, allowing the company to avoid the pitfalls of excess inventory, creating a sense of urgency among consumers along the way. Anine Bing’s top-selling items sell out. Fast.

And while Bing may not dictate style like icons of the past, her authentic connection to her community — listening to direct feedback and observing conversations between fans — earns the repeat customer. “Of course I design what I believe in, but I read all the comments on the blog and on Instagram, and I take their feedback seriously. It’s also great to make them happy,” Bing says. “You have to stay true to the brand, but I do listen to them.”

Leandra Medine, chief creative officer and founder of personal style blog-turned-media platform Man Repeller, says that its community — which is actively engaged on social media, but also in the website's comments section — helps to inform brand extensions. Medine even set up a special Slack channel for "power users," meaning that top commenters are able to chat amongst themselves as well as editors within the messaging service, making them feel like they are not only part of the community, but also the Man Repeller team.

“Most of the stuff that I’ve learned about community has been directly correlated to the media company,” says Medine. “All of the subsidiary products of Man Repeller — events, physical products — are a response to further perpetuate and nurture our sense of community.”

The venture’s first fully-branded product, shoes, are designed by Medine and manufactured and distributed by Six London. Retailers include Net-a-Porter, and prices hit under $500. “Shoes are the most escapist fashion accessory and incredibly inclusive, which is important to me with Man Repeller,” Medine says. “You can look however you look and participate in fashion with the shoes.”

Shoes might have been the the right first physical product to launch under the MR moniker, but in-real-life events are equally as important, if not more so. In March 2017, Medine hosted her first pop-up shop, the “MR Bazaar” at Manhattan’s Canal Street Market, which sold MR-branded merchandise, including hats, mugs and stickers, as well as shoes and a t-shirt collaboration with the label Monogram.

“The idea was to test the concept of retail and physical space,” she says. “We thought we had purchased enough product to suffice for the entire month, and we had to re-order every single week.” Along with plans for a second pop-up, the company will host its own “sleepaway camp” in Upstate New York this June. The 200 tickets to the event — which cost $290 each — sold out within 48 hours. “That’s the true impetus behind all of it,” Medine says. “To continue to develop and perpetuate the relationship with audience members.”

In-person events — whether it be Goop’s wellness conference taking place just a week after Man Repeller’s, or Ace & Jig’s swap parties — help forge a deeper connection between a brand and its followers.

These close-knit communities feel anything but fleeting. However, scaling them can be challenging. For instance, scaling a brand rooted in a single person’s point of view can prove difficult, especially when that point of view is polarising. “How do you in fact scale what a lifestyle is across the board?” asks Danny Rimer, a partner at Index Ventures. (Disclosure: Index Ventures is also an investor in BoF, and other fashion-related ventures including Farfetch.) “There are very few successful examples of that, and it requires a huge commitment.”

Rimer, for one, is interested in brands that have strong communities but are not necessarily personality driven. Consider Index's investment in Glossier. Chief executive Emily Weiss may serve as the face of the brand, but she does not define it. "Glossier is its own brand," says Rimer.

It’s also difficult to scale community without losing focus — or diminishing quality. Nasty Gal, for instance, was able to cultivate a devoted community of “badass” girls who identified with the company’s sexpot-hipster attitude. But after raising more than $60 million — including funding from Index — Nasty Gal fell short when it came to scaling quality production, which means very few customers were repeat customers. It also became overly intertwined with the personality of founder Sofia Amoruso, whose dueling “#girlboss” brand — culled from her best-selling memoir of the same name — overshadowed the apparel. As Nasty Gal grew, it ultimately alienated its community. (Amoruso is now working to scale the #girlboss brand as a media property.)

Both investors and brands are looking at the mistakes Nasty Gal made as a cautionary tale. Community may be a powerful tool, but it’s clearly not enough to guarantee success. “We don’t want to force growth, things must happen at the right pace,” Court says. “You can’t try to do too much too fast.”

Additional reporting by Chantal Fernandez.

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