{"id":2922,"date":"2015-12-08T14:39:49","date_gmt":"2015-12-08T19:39:49","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/bonobos\/"},"modified":"2015-12-08T14:39:49","modified_gmt":"2015-12-08T19:39:49","slug":"bonobos-a-modern-way-to-shop","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bonobos-a-modern-way-to-shop\/","title":{"rendered":"Bonobos: a modern way to shop"},"content":{"rendered":"<p><strong><u>Bonobos: <\/u><\/strong><\/p>\n<p>Founded in 2007, Bonobos is an online men\u2019s apparel company specializing in well-fitting pants and \u201cfuss free fashion\u201d (Financial Times). Since their 2007 launch, Bonobos has earned a number of accolades, including \u201cBest Men\u2019s Pant\u201d from New York Magazine, and grown to be the \u201clargest clothing brand ever built online in the US\u201d, according to their website. This success is attributable to a deep understanding of the needs of their core customer, and an operating model designed to best meet those needs.<\/p>\n<p><strong><u>Understanding customer needs:<\/u><\/strong><\/p>\n<p>The premise of the Bonobos model is based on the assumption that male shopping utility can be captured as follows (source: Lightspeed Venture Partners):<\/p>\n<p style=\"text-align: center\"><a href=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Bonobos1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-2885\" src=\"https:\/\/i4tsk12in2b2y7uts14c528g-wpengine.netdna-ssl.com\/wp-content\/uploads\/sites\/4\/2015\/12\/Bonobos1-300x85.png\" alt=\"Bonobos\" width=\"311\" height=\"88\" srcset=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bonobos1-300x85.png 300w, https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2015\/12\/Bonobos1.png 470w\" sizes=\"auto, (max-width: 311px) 100vw, 311px\" \/><\/a><\/p>\n<p>While women (according to co-founder Andy Dunn), are willing to spend time and endure hassle if style and trend are sufficiently high, men are primarily trying to optimize around fit while minimizing time and hassle. Their business model, therefore, is to provide well fitted pants for the modern man, and their operating model enables them to do this in a way that is convenient and efficient for their customers.<\/p>\n<p><strong><u>Bonobos operating model:<\/u><\/strong><\/p>\n<p>The Bonobos operating model is designed to maximize a customer\u2019s shopping experience and drive value for the company in three ways.<\/p>\n<p><strong>E-commerce platform<\/strong> <strong>&amp; policies<\/strong>: Sales of Bonobos clothing occur predominantly online. This benefits not only their customers, who are able to purchase clothing quickly and easily, but also Bonobos, given the low fixed costs and high margins of the online distribution channel. Further, Bonobos minimizes the hassle associated with online shopping for its customers by providing free shipping and free returns, on all orders.<\/p>\n<p><strong>\u201cGuideshops\u201d: <\/strong>Cognizant of the fact that most people want to be able to try on clothes before purchasing, Bonobos has \u201creinvented the retail store\u201d (Bonobos.com) by having a small number of physical locations which they have branded \u201cGuideshops\u201d. These differentiate them from other retail competitors in a number of\u00a0ways:<\/p>\n<ul>\n<li><strong>Customer appointments: <\/strong>Rather than just stopping by, customers make hour long appointment with a Bonobos ninja (see below for more detail on \u201cninjas\u201d), during which they are able to try on clothing with the help of a Bonobos representative. This not only improves the customer experience by resulting in less crowded stores and personalized service, but also benefits Bonobos by identifying the customers most serious about making a purchase, and enabling them to focus the effort and attention of their customer service reps on those customers.<\/li>\n<li><strong>No physical inventory for sale:<\/strong> Once a customer has finished their appointment, they receive an email with the products they have selected and their size information. They can place an order in-store, or they can order products at a later date from home, but in either instance the transaction occurs online. While this is marketed as being in the customer\u2019s best interest, as they are able to \u201cwalk out of the store with their hands free\u201d (bonobos.com), it is hugely beneficial for Bonobos: first, it familiarizes customers with the online ordering process (making them more likely to make repeat purchases in the future); and second, it limits the inventory that Bonobos must keep in store since all they need is one size in each style for trial purposes.<\/li>\n<li><strong>Reduced\u00a0costs: <\/strong>Guideshops are incredibly cost effective. In addition to the reduced inventory\u00a0holding costs mentioned above,\u00a0they require less sq. footage than competing retail formats, reducing rent costs, and fewer sales associates, resulting in lower labor costs.<\/li>\n<\/ul>\n<p><strong>Emphasis on service:\u00a0<\/strong>The third key feature of their operating model, is an emphasis on customer service, provided by highly trained \u201cninjas\u201d (the name given to Bonobos sales associates). When customers arrive for their appointments, they are offered a beer, walked through the entire product line, and given tips on what looks best. This high level of service continues after customers have purchased products, as they are able to return clothing to Bonobos at any time, for any reason. This creates a huge amount of customer loyalty, and drives repeat purchases.<\/p>\n<p>By isolating the biggest pain points of clothing shopping for men, Bonobos has designed their operating model around maximizing utility for their target customers. Fortuitously for them, many of the same initiatives aimed at reducing time and hassle, also reduce costs for Bonobos, creating value for the company as well as the customers.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Sources:<\/strong><\/p>\n<p><a href=\"http:\/\/cargocollective.com\/joychen\/Reinventing-Retail-A-Bonobos-Case-Study\">www.Bonobos.com<\/a><\/p>\n<p><a href=\"http:\/\/cargocollective.com\/joychen\/Reinventing-Retail-A-Bonobos-Case-Study\">http:\/\/cargocollective.com\/joychen\/Reinventing-Retail-A-Bonobos-Case-Study<\/a><\/p>\n<p><a href=\"http:\/\/lsvp.com\/2010\/12\/16\/why-lightspeed-invested-in-bonobos\/\">http:\/\/lsvp.com\/2010\/12\/16\/why-lightspeed-invested-in-bonobos\/<\/a><\/p>\n<p><a href=\"http:\/\/nymag.com\/bestofny\/shopping\/2009\/mens-pants\/\">http:\/\/nymag.com\/bestofny\/shopping\/2009\/mens-pants\/<\/a><\/p>\n<p>http:\/\/howtospendit.ft.com\/mens-fashion\/5236-great-chinos-and-service-with-a-cyber-smile-<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With an emphasis on convenience and ease, Bonobos&#039; operating model is perfectly designed to meet consumers&#039; needs. <\/p>\n","protected":false},"author":1099,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[63,49],"class_list":["post-2922","hck-submission","type-hck-submission","status-publish","hentry","category-consumer-goods","category-e-commerce"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/the-tom-challenge-tom-winners-and-losers-assignment\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bonobos: a modern way to shop - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/bonobos-a-modern-way-to-shop\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bonobos: a modern way to shop - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\"With an emphasis on convenience and ease, Bonobos&#039; 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