Buttoned up! SuitShop’s Secrets to DTC Success
In a recent episode of Spieckerman Speaks Retail, Carol Spieckerman, president of Spieckerman Retail interviewed Diana Ganz, co-founder of SuitShop, a direct-to-consumer brand that specializes in selling affordable suits and tuxedos to a diverse customer base. The following is a recap of our lively conversation, with sage advice from Diana on how to get D2C right.
Defying (Many) Market Challenges
Three challenges are frustrating retailers and brands even as they spell opportunity. First, driving growth in margin-making discretionary categories like apparel is a struggle. There are many reasons why, yet it’s a tough nut to crack. Second, direct-to-consumer brands have created a lot of buzz, but the limitations of the model and resource realities are starting to sink in. Finally, even some of the biggest retail players are finding that making E-commerce profitable is still a pipe dream.
Despite these hurdles, one brand has proven that the situation on all three fronts is far from hopeless. SuitShop has emerged as a beacon of success, breaking through barriers and solving some of the toughest challenges plaguing direct-to-consumer brands and E-commerce along the way.
A Vision Born of Frustration
Eight years ago, in the heart of New York City, best friends Diana Ganz and Jeanne Foley embarked on an audacious plan to transform the tedious and expensive process of renting suits and tuxedos into an affordable and delightful buying experience.
Driven by her disappointing experience with her own wedding and her professional knowledge from her work as a technical designer, Jeanne joined forces with Diana to offer an alternative in the formal wear market. The problem-solving prowess Diana honed at MIT brought much-needed clarity to SuitShop’s purpose – Diane stated, “There’s more longevity to brands that position use cases around something they’re trying to solve.” Their vision was to create a collection of suiting that men and women could own for the same price as a rental and to offer a level of service akin to custom tailoring. With most of its customers being creatures of habit, the founders saw weddings as the initial hook, with an opportunity to draw customers back with great service and reliable sizing.
Through creative solutions, helpful content, and personalized service, SuitShop ensures that customer service is not just a department but a defining feature. Diana tells me, “We like to tell customers they can ‘set it and forget it’. After a group registers with us, we take care of the ordering process, send reminders, and make sure the sizing is right.”
Old-School, Up Close, and Personal
By personally delivering uncompromised customer service from the beginning, Diana and Jeanne have stayed close to their customers and learned key details of their preferences. Both women regularly answer customer calls and work in the company’s retail showrooms, even as SuitShop experiences explosive growth. The team captures data through its registry and other touchpoints to provide relevant content and support at every stage of the customer's journey and to align with specific wedding-planning timelines.
We weren't playing with anyone else's money, so we started the old-fashioned way, by building great relationships.
In a landscape dominated by well-funded competitors, SuitShop's initial approach to marketing was surprisingly old-school. Rather than relying on hefty marketing budgets and paid advertising, they chose to forge authentic connections and stoke organic momentum. Diana stated, “We weren’t playing with anyone else’s money, so we started the old-fashioned way, by building great relationships.” Bringing flexibility to weddings, an evergreen life event, became their strategic entry point. As Diane stated, “What’s not discretionary is when your friend says, ‘Hey, I’m getting married and I want you to be in my wedding, and I need you to buy this suit.’”
Diana and Jeanne didn’t activate paid advertising until three years into the business, and the results of this decision were phenomenal. According to Diana, ROI on the company’s paid ads is eight to ten-fold. Even so, she stated that, “We don’t just throw more money down those channels, because we’ve seen that as you spend more, the quality of the leads degrades. We titrate various channels, putting more money into what’s working, while always maintaining quality returns.”
Bolstered by Brick-And-Mortar
Although SuitShop remains a digital-forward, direct-to-consumer brand, the company has opened several physical showrooms that allow its male customers to be fitted with their friends and “have the experience that women have always had around dress shopping.” The company views the showrooms as extensions of its online brand and yet another vehicle for driving efficiency and delighting its customers. Diana stated that SuitShop has “vertically integrated” its customer experience across the showrooms. Store associates are trained in many areas and respond to customer emails and phone calls during off-peak periods. Not only does this drive efficiency in payroll dollars, but customers describe the service provided by associates as “next level.”
“It’s not rocket science. We’re just going to treat people the way we would want to be treated”
Tech Where It Counts
SuitShop's tech investments focus on enhancing the customer experience and optimizing operational efficiency. SuitShop’s online Fit Finder uses customer data to revolutionize the fitting process. Diana claims that size recommendations are now 85 percent accurate, offering a hassle-free alternative to purchasing a suit online. Additionally, sophisticated back-end solutions and dashboards streamline returns, exchanges, and real-time reporting.
Meteoric Growth at Full Price
Since its humble beginnings, SuitShop's growth has been nothing short of meteoric, with the COVID-19 pandemic only momentarily stalling the company’s momentum from 2019 into 2020. During the past three years, SuitShop’s brand value has skyrocketed from $3 million to a remarkable $30 million.
In an industry driven by sales and discounts, SuitShop once again deviates from the norm. Resisting the temptation to engage in aggressive discounting, Jeanne and Diana focus instead on providing clear day-in/day-out value and backing it up with unmatched customer service.
SuitShop has mitigated profit-killing pitfalls like fraud, shipping costs, and returns by prioritizing a hands-on approach. Diana and Jeanne caught fraud schemes before they snowballed simply by noticing irregularities early-on. The company experiences enviably low inventory loss by keeping SKUs at a manageable level and staying out of the fashion fray. Most returns are returned to inventory, and some are donated to organizations that focus on work placement for at-risk youth and refugees.
Diversification and Diversity
While weddings remain core to SuitShop’s business, the brand acknowledges the potential to diversify into other suiting categories and fits. An "on-demand endless aisle" concept is set to launch, offering an expansive catalog of specialized items leveraging the company’s existing patterns and data stores. The introduction of a unisex fit in January speaks to SuitShop’s commitment to inclusivity and outreach to the non-binary community and others seeking alternatives to traditional bridesmaid dresses.
D2C Direction and E-Commerce Pitfalls
Diana stated that up-and-coming brands can find themselves on a roller coaster when they have a lot of cash to spend in marketing yet don’t truly understand their market fit. She said, “I think the number one reason these younger brands struggle with profitability is that they haven’t figured out how to drive sales and growth without healthy or even excessive marketing budgets.”
It's hard to reverse-engineer the concept of serving your customers as well in-store as you do online.
According to Diana, bigger brands stumble by becoming detached from what their customers truly value. “The layers that get built in the organization remove decision makers from the individuals who are dealing with customers. It’s hard to reverse-engineer the concept of serving your customers as well in-store as you do online.”
SuitShop's remarkable journey stands as a testament to the power of problem-solving, customer-centricity, and authenticity. By redefining the traditional paradigms of retail and direct-to-consumer branding, Diana Ganz and Jeanne Foley prove that profitability and success are possible, even in the face of industry-wide challenges, when the customer is put first. “The customers will tell us what’s next. They always have. I look forward to them helping us guide SuitShop to what’s next.”
