Andrew Patterson talks to Stefan Preston whose company has won this year’s Entrepreneurs Challenge with 'ridiculously affordable', beautifully designed lingerie

By Andrew Patterson

Every so often a brand emerges that surprises and occasionally confounds the experts, delivering a product that seems to defy the odds of success.

One of those examples might be Rose & Thorne.

Starting out as a ‘community’ of ex-Bendon employees who were made redundant when that company relocated to Australia in 2011, the new business that rose phoenix like from the ashes set about the goal of creating what it describes as “ridiculously affordable” beautifully designed lingerie. Essentially, lingerie that women actually wanted.

Following the now traditional route in the apparel sector where design is completed in NZ and manufacturing is undertaken in China the fledgling company has steadily gone despite the ravages of the post GFC environment.

Simultaneously launching its product globally online and nationwide through The Warehouse, this year Rose & Thorne was also named a joint winner of the 2013 Entrepreneurs Challenge organised by the University of Auckland Business School.

Customer led focus

A completely customer-led initiative from inception, involving focus group sessions between women and the Rose & Thorne designers at ‘The ‘Fit  Studio’, the company’s chic inner-city store in Auckland, the approach has been to fill a gap in the market co-founder Stefan Preston, formerly Bendon’s NZ based CEO, says has been ripe for the taking.

“When we started we decided to focus on what is called low-service retail, which is discount department stores where there's no service, very difficult in the changing room, we saw the potential to develop an online offering. Because bras in particular are designed as quite rigid garments, we discovered there was a real issue with many women wearing ill-fitting bras that made them feel quite uncomfortable. That was a key customer insight for us.

“We looked at the difficulty this posed for retailers and you can see in discount department stores the sales are actually lower in units than they are in a mid-market situation. And that's unusual because mostly the lower end of the market has the most volume and so we concluded that this was probably due to the quality of the product and the overall service experience being poor.

“So we set about seeking to help two users. Firstly the retailers to get more value from their lingerie offering and we also needed to help the end user who’s uncomfortable because they're wearing crappy product. So it was a matter of working on both ends of the market.”

The ultimate business challenge

However the challenge for Rose & Thorne doesn’t end there. Operating in a mature, zero growth market requires very careful navigation of the space and necessitating value to be created at both ends of the spectrum.

“Theoretically, it shouldn't be possible to start a business in a market like this. It's only out of necessity that we've had to do it because we're lingerie people right! The other thing to think about in apparel is that most purchase decisions are really made emotively so we had to consider the emotive space that we could occupy, so that's a third layer to thinking about the value gap.

“And if you look at lingerie market, half the brands in the market are really defining themselves around sexuality, you know they're really seducer brands, and the other half are pretty old fashioned 60, 70 year old everyday brands that are very tired and have boring messaging. Then our final challenge for really making this brand work is to understand how to talk to the other side of the market in what we used to think of as an everyday market which we will reinterpret over time at an emotional level.”

Preston says the whole approach to developing the brand involved starting with a clean sheet of paper.

“Companies like Bendon have obviously been around for a long time, but they're just trapped in this industry mind-set of how things get done. What we've really tried to do is take a fresh approach and really look at those user needs, and then build a brand that which speaks to those needs in a market that isn't really letting us have any space to grow.”

Innovation and design approach

So how has the business approached the challenge from an innovation perspective?

“The first thing is at a product level. Obviously we have to innovate and for us that translates into three things; first is what we call forgiving fit, so we accept that most people that buy lingerie in any channel, but particularly in a discount channel, are going to buy the wrong size because nobody has the skill really, to get the right size and shape onto their body. So we've invented forgiving fit which is a whole lot of technology and design that allows the product to be a lot more forgiving but not lose its function.

“Secondly, is shape. Not all women suit all shapes but we've taken the most iconic shapes in the world and simplified them down to five. What that means is you never need to try one of our products on again once you know your shape. You can just buy on-line or in store so what it's doing is it's suiting a low service environment. Then what we can do is target our energy into delivering an experience for people to join our brand based on convenience.

“The last thing we've done is really a bit more advanced. Our design staff work with women fitting all the time so most of our designers would fit hundreds of women, and what we're doing when we see that is we see patterns emerge which have taught us that the way the industry designs product is actually wrong, and so we design in a totally different way so that, in particular, the problems really significant with larger cups and backs because of the way the industry grades the sizing. So we've got a whole new design methodology that basically cancels out that problem.

“Now what this all means is we can produce product for the same quality at half the price and it fits way better, and it's way more comfortable.”

Brand strategy

Preston says that at a brand level it has also required a whole new approach.

“When we innovate we search for insights, define the problem and then we experiment and iterate. So at a brand level we're still in the middle of iterating and figuring a few things out but we've recently finished the research and strategy piece for our third iteration, and we're about to go to design on that which will just evolve the brand to a point where we're talking about a really complex subject but in a really simple way, and that's what we're attempting to do in this round.”

Preston’s involvement though does beg the obvious question: What’s it like to be one of only two guys working in what is, after all, a very female domain?

“It's a very intimate business and being one of the few men involved clearly it's not me that's conducting the real customer insights! Our design staff, in particular, spend a lot of time in the changing room with customers and they're just developing this encyclopaedic knowledge of everything for all different shapes. Some of the insights are just simply different sized women even view the world in a different way, and how you would want to talk to them would be different than other sized women. And that's created distinctions in our product range that are coming out next year that are amazingly different than the way we would have looked at the world for the last ten years.

Empathy project

Gathering insights from customers has also involved being creative in the way those insights are obtained.

“We do what’s called an empathy project where we really try to understand what's going on in the home. What would be ideal would be for women to just empty out their lingerie drawer and tell stories about their lingerie – but obviously that’s never going to happen! So I think you have to use inference a lot and we're stuck with interviewing rather than observing, which is not great, but I think if we're sensitive to it and we're just listening to storytelling and not asking direct questions we do get a lot of really good insights.

Social media is also an integral component in the marketing effort of Rose & Thorne’s range.

“It's a very friendly brand and we haven't had too much trouble with that part of our marketing. You can see the way we develop the brand it’s about conversations. If you look at our Facebook page for example, there's lots of feedback from our customers, lot of advocacy flying through that's unprompted advocacy and that's just the conversational atmosphere that we're trying to create around the brand. We're taking the point of view, in terms of brand development, that we're more discovering the conversation people want to have rather than telling them the conversation we want them to have. That’s an important distinction.”

“Generating customer advocacy is one of what we call our six obsessions so in a perfect world I'd like to think the brand would never need to advertise, that it's just word of mouth and with the internet we can sort of see a reasonable amount of the word of mouth and that's fantastic. But it is slow and you've got to be patient.

But Preston says the real challenge comes in trying to both listen to the customer while at the same time create a product that doesn’t already exist.

“There are still a lot of people who don't really get what it is we're trying to do. We see it in the feedback. Some of those who join our club you can tell literally don't understand what we're trying to do and then they go away and then some people come in and they really get it straight away.

“We're trying to create something that doesn't exist so you find that there's two sides to that; you have to have the courage of your convictions but you have to be a very good listener at the same time. I think we can taste what this future we're creating looks like but it's fuzzy and we have to live with that while we make it real.”

Distribution channels

As the future of retail continues to change, rethinking distribution channels is critical for a brand such as Rose & Thorne.

“For us online is clearly a very important part of our approach, but I don't see a future of lingerie stores the way you would see them today. I think what they are is places for people to come in and deeply immerse themselves in the idea of the brand and really get the brand. They come here to join the club and once they're in the club they can buy online or they could buy it in their large department store or they could buy it anywhere really, it doesn't matter, it's the channel you ought to be agnostic to channel right now, but the brand should deliver based on the constraints of that particular channel.”

Winning this year’s Entrepreneurs Challenge has also had its upside.

“Part of what it's meant for us is the ability to get a commercial loan on reasonable terms which is sort of semi-equity in a way, but what it's also meant is that it allows us to be a 100% staff owned for longer. And that is amazing because what we're trying to create here takes money and part of one of the other objectives we've got is to try and create an opportunity and a living for a team of really talented people who want to work on their own terms.

And next big opportunity for Rose & Thorne?

“We see a huge potential opportunity in the US. If you look at Victoria Secret which was founded around 1980, it's now a six billion dollar company. It's almost entirely defined around seduction and sexuality. The question I've got is, where do the customers go afterwards? Because most women grow up and where do they have to go, they have to go to the boring old department store to buy mostly boring as product or over-priced product, and so we see an opportunity to define ourselves into that space over time.

“I think there's a different brand of femininity when you grow up and we're still exploring just exactly what that is, because it has to be very, very compelling, and we're trying to put our finger on it right now at a creative level. I think once we do it will open up a space for people to relate to our brand in a way that's really positive.”

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