Indochino: Achieving Growth with Bricks and Clicks

Indochino: Achieving Growth with Bricks and Clicks
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Indochino: Achieving Growth with Bricks and Clicks
Indochino identified a business opportunity of making custom-made suits for clients at affordable prices using an online platform. As the business grew and expanded across North America, the company's leadership realized that it needed to stay ahead of its competitors by not only being the first mover in the made-to-measure (MTM) category but by also scaling up within this category (Chandrasekhar, 2020). The company's expansion vision involved increasing their MTM suits sales, orders, and revenues as well as opening new showrooms within North America.
During its operations, the company's leadership had realized that the company's offline presence was a perfect complement to its online presence. To facilitate rapid scaling up, the company needed to reinforce its value proposition, execute a blitzscaling plan, and become a full omnichannel retailer. The purpose of this paper is to discuss how the company can achieve this and recommend an appropriate strategy to facilitate rapid growth.
Reinforcing the Value Proposition
To maintain a competitive edge, companies need to convince potential clients why their offering is more valuable than that of competitors. They, therefore, need to have a value proposition because customers usually select the offering that gives them the most value (Kotler & Keller, 2012). Initially, Indochino's value proposition was to offer MTM suits at a price as low as that of ready-to-wear suits while delivering them within the time it would take to buy and modify a ready-to-wear suit using an online model.
By 2018, the company had developed a new value proposition that focused on delivering customized MTM menswear at an affordable price while still creating a memorable customer experience (Chandrasekhar, 2020). To stay ahead of competitors, Indochino needs to strengthen its value proposition. The following are the steps that Indochino should follow to ensure it has a strong value proposition
Step One: Research potential customers
According to Kotler and Keller (2012), companies can only have an effective value proposition if they have researched their potential customers. Indochino has already identified its target customers, namely; Chester, the fashion guy, Dwayne, the event guy, and Rob, the work guy (Chandrasekhar, 2020). Each of these target customers has different expectations while purchasing menswear. The group referred to as Chester, has a greater sense of fashion and is willing to spend money just to look stylish. The Dwayne group is price-conscious and only purchases suits when there is an event. The Rob group is interested in a suit that offers convenience since they wear suits in their everyday work settings. For each group, the value proposition is different, and Indochina will have to meet the needs of each group by treating them differently rather than the same. Identifying the various segments to serve is essential in building a stronger value proposition (Payne et al., 2020).
Step Two: Make the MTM menswear suitable to its potential customer target
Once it has identified the needs of each group of potential buyers, Indochina will have to make its menswear suitable to each group. Payne et al. (2020) indicate that building a strong value proposition requires defining what the customers value most. Currently, the value proposition is that Indochina offers customized suits at affordable prices. This value proposition assumes that all potential customers are concerned about the prices. However, not every group values affordable prices. For instance, Chester, the fashion guy, loves fashion and looking stylish. They are willing to spend money just to acquire a stylish product (Chandrasekhar, 2020). As such, price is not necessarily a consideration while making a purchasing decision. Indochina can focus on offering this group of customers high-end products even if the customer will have to pay a premium price. This value offering is different from what Dwayne, the event guy, needs. Saving money is the goal since they only need these products when there is an event, unlike Chester, who needs the products as long as they are trending and fashionable.
Step Three: Track competitive offerings
As indicated in the case study, Indochina's competitors are also catching up in the MTM category. Indochina can strengthen its value proposition by first examining what the competitors are offering and then making its offerings unique based on what potential customers want (Payne et al., 2020). A value proposition is stronger if it is better than that of competitors. According to Kotler and Keller (2012), a strong value proposition differentiates its offerings from those of competitors based on what matters most to potential consumers. For instance, to stand out, Indochina can indicate that it is offering affordability and convenience so that customers who value low prices or convenience can recognize the value offered by Indochina.
Step Four: Communicate quantifiable value and show credibility
Finally, Indochina will have to communicate its value proposition in quantifiable terms. For instance, the initial value offering indicated that the company delivered MTM products within three and a half weeks (Chandrasekhar, 2020). To reinforce their current value proposition, the company needs to communicate a quantifiable value proposition by indicating that the company will deliver the product within three weeks or will deliver affordable MTM menswear at an affordable price of $ 350-450, for example. Also, the company needs to show the credibility of its offering to convince potential clients of the value (Payne et al., 2020). If the company has evidence of its success in providing the same offering, this serves as a mark of credibility. Indochina's MTM suits have been a success in the industry, and they have been delivered with speed. Thus, communicating this with its clientele will strengthen its value proposition.
Executing a Blitzscaling Plan
Indochino's target is to increase its revenue tenfold within five years (between 2017 and 2021). To achieve such aggressive growth, it will have to effectively execute a blitzscaling plan. Blitzscaling involves achieving massive growth by focusing on speed rather than efficiency, especially in uncertain times (Hoffman & Yeh, 2018). A blitzscaling plan will ensure that Indochino becomes the first mover at scale, thereby gaining a competitive advantage. Below is a detailed description of how Indochino should execute a blitzscaling plan.
Step One: Establish customer expectations and products suitability for blitzscaling
What do customers want or expect from the product? Indochino will have to understand what the customers want because speed takes precedence. According to Kuratko, Holt, and Neubert (2019), it is important to establish whether the products can be launched fast while still meeting the specific expectations of the target market. If this is not possible, then blitzscaling will be an unsuccessful endeavor. For instance, can the MTM menswear be released quickly without impacting the convenience or stylishness desired by customers? How can that be achieved? Kuratko, Holt, and Neubert (2019) reveal that some products are unsuitable for blitzscaling, and the sooner a company establishes the suitability, the sooner it can achieve success.
Step Two: Ensure access to resources
For successful blitzscaling, companies must identify and have access to the right business environment. Kuratko, Holt, and Neubert (2019) indicate that blitzscaling requires talented human resources who will grow the company amidst high levels of uncertainty. Additionally, they need access to sources of funding, such as venture capital, to facilitate risky investments that have not been tried and tested. Companies must also have operations in cities that have the potential to accommodate blitzscaling efforts. Hoffman and Yeh (2018) indicate that having access to a large market size that can generate huge sales per year is essential for successful blitzscaling. Indochino will have to source the best talent in the workforce to ensure access to talent in areas such as design, style consultancy, among others.
Also, it will need to convince existing and potential investors to invest in the scaleup through a well-laid-out business plan or financial forecasts. According to Kuratko, Holt, and Neubert (2019), blitzscaling is characterized by errors, and as such, companies need sufficient funds to lessen the severity of the errors. Finally, Indochina will need to focus on cities such as New York and Vancouve...