James Wakefield: I feel like it’s taken 10 years to be an overnight success. We’ve built a great business with a great team and foundation with a really good platform, but I feel like we’re only just getting started. We have now become more of a household name and we have a lot more happy customers out there spreading the word. We’ve got a great network of showrooms and a great online experience. It’s only just beginning.
Most people still don’t think about custom suiting when they think about a suit. They think, ‘Oh, I’ll just go to a department store.’ But I feel like it’s starting to shift. People are actually thinking, ‘If I need a suit, I go to institchu.’
Robin McGowan: We’ve always done an OK job of getting brand awareness, but there are still a lot of people who haven’t heard about us, or even the concept of getting an affordable, made-to-measure suit online.
So this year, we’ve gone out with a mainstream media custom clothing campaign, with the tagline, ‘Custom clothing you love too much’, which is off the back of us doing a deal with Channel 7 and working with them on a broader media strategy that we think will help people discover us and learn more about made-to-measure.
JW: We’ve gone through a brand building exercise to fuel that brand awareness at the top of the funnel so that people can ultimately become customers. Our customers aren’t just a one-off transaction. We invest so much time in that initial experience – enjoying a beer, wine or whiskey, helping them pick a garment, taking measurements, creating a profile. It’s all about the second, third, fourth, and fifth orders. In a normal monthly period, roughly 60 per cent of our orders are repeat purchases and that’s continuing to grow. It’s our existing customers who are the lifeblood of our business, because they’re the ones driving the referrals and word-of-mouth, which is how we got to where we are now. Now, with our partnership with Channel Seven, it’s about reaching new people.
IR: Can you tell me what that strategy looks like?
JW: On Channel 7, we’ve created a really cool TV commercial. It opens up with a guy running on the beach in a tuxedo, then catching a wave. Then there’s a garbage guy putting the bins on the back of a garbage truck in a beautiful suit. There’s a woman out jogging and a man mowing the lawns in a suit.
Then we’ve done bus wraps, too, but most importantly, we’re tying all of that into a digital strategy with Google AdWords – retargeting, paid social. We’ve put this strategy in place just in New South Wales, so then we can compare what happens there in growth in brand awareness, new customers and repeat purchases, with all of the other cities. Then we can attribute that back to this above-the-line strategy so we can measure it.
We ran the TV campaign in isolation first and we saw an immediate 50 per cent increase in brand searches. It will take time for those people who have become aware of the brand to actually purchase, but it shows positive signs.
We’re already seeing the impact of that campaign. It wasn’t focused around weddings, but at the moment, we’ve never been so inundated with wedding parties. We don’t want to be a wedding suit business, but at the moment, it’s so difficult to get a suit for one person in a particular style, price point, and size. When you’ve got five guys all over the country, it becomes near impossible. But our value proposition is so strong and as we create this brand awareness, you’ve got aunties and uncles, you’ve got cousins, like, ‘Oh, you’re getting married? Hey, go check out institchu.’
RM: The wedding business is our mass market appeal because you really can talk to anyone who either knows someone getting married, or they’ve got a wedding coming up or they’re a guest, so it kind of works for us.
IR: I’d like to talk to you about your journey towards an IPO listing. I know that last month, you secured $7 million in an investment round. Where are you guys tracking there?
JW: Yeah, it’s really exciting. So we have completed an investment round, with the idea that we’ll work towards listing the business. If you look at the stock market, it’s a little bit of a choppy time. But for us, it’s not something that we’re rushing towards this month or next month. We’re basically working on growing the business, putting it in the right place with all the right governance, then looking to list in the not-too-distant future.
As we go towards that listing, our strategy is to not be positioned as just Institchu, the direct-to-consumer retail business. We’ve just launched a software-as-a-service product [called Taper] to allow traditional retailers to offer made-to-measure orders in their existing stores. For example, a David Jones, or any traditional large format retailer, can suddenly do made-to-measure and we can give them the supply chain and technology in a turnkey solution.
Ultimately, there is nothing in the world that is as sophisticated as the technology that we’ve built. The group that helped us build it is Dovetail. Essentially, they’ve re-engineered the IP and systems that we built for Institchu into a software-as-a-service product to power other retailers’ made-to-measure, and make it work for them and taken it online.
IR: That’s so great. To make made-to-measure and sustainable wardrobe options mainstream, you need other retailers and brands to be able to offer it to their customers, too. It’s a community effort.
RM: We built this part of the business because people were approaching us and saying, ‘Hey, we’re interested in doing made-to-measure or made-to-order. Can you help us? Can we use your technology?’ We spoke to one brand, which basically told us that if this business model works, they’d be interested in changing their whole model and changing their ready-to-wear to made-to-order, because it would solve so many headaches for them.
If you look at the stats, your return rates for made-to-measure are sub 2 per cent, versus 20-30 per cent [in traditional retail]. Plus you don’t have to invest in stock. Everything’s made-to-order, so there are some major benefits, like it’s anti-fast fashion. People spend a bit more on the product and keep it for longer.
JW: As we go towards this IPO, we won’t be just a retail business, we’ll be an innovative technology-enabled direct-to-consumer business that also has a software-as-a-service product.
IR: Where do you see the future of customisation heading?
RM: Speed is a big thing that we’re focused on. The delivery time is probably the one disconnect between made-to-measure and traditional retail. It’s something we’re always working on with our suppliers. I think there are certain elements of technology that are getting better, like sizing technology, visualisation, augmented reality – anything that can make the process of seeing the products in real life better for the customer.
When we think about customisation for Institchu, it’s two things. It’s the ability to customise your measurements, sizing, it’s also the ability to customise the product. I think a lot of brands just focus on the product side of things, whereas we try to do both. Technology is getting to a stage where you can make both those things easier and better for the customer to see the product in real time. We use a lot of tech at Institchu, but at the end of the day, we still think the personal physical store and the tape measure are our best tools. So as good as technology is getting, we still rely on a very physical retail experience, but with the technology supporting it and making things work better.
JW: I feel like the terms personalisation and customisation have always been thrown around the wrong way. Adding a monogram to something is not customisation. That’s not really personalisation in my eyes. Really, what I think people want is being able to design from scratch the product that they want, whether it’s design, style, fit or sizing.
IR: I know a few years ago, you guys were discussing overseas expansion. Where are you on that journey at the moment?
JW: We were trading really well in the US. We had a beautiful store right in Midtown, but our lease came to an end at the peak of New York lockdown, so it didn’t make sense to renew it. And on the other side, right as the outbreak was emerging, we were due to open in London. We had a lease signed, staff hired for a store in Covent Garden on Long Acre. Luckily, we were able to pull out of that in a cost-effective way.
But what Covid-19 has shown us in the last couple of years is that we have so much opportunity in Australia. We are still at the tip of the iceberg. We could be 10 times larger than we are now domestically and we’ll let our software service the offshore market, so we will still be an international brand generating revenue from all over the world.
IR: Institchu does womenswear, too, do you see that part of the business growing?
RM: We started with menswear, it’s our bread and butter, but womenswear has been performing well for us. It’s a high average order value, which is great. Women seem to respond well to the design aspect of it, they enjoy the process. Guys will maybe focus more on the custom sizing. We’re seeing more exciting colours and designs come through from women’s. It allows us to look for locations that probably weren’t [originally] appropriate for us from a retail point of view. There are some shopping destinations that attract more female shoppers. We’re still discovering how to incorporate it into marketing. But for us, it made sense. It wasn’t an investment by any means. Same showroom, same fabrics – there are some female-exclusive ones – but it was just about training and getting the product out there.
JW: That’s what we like about our business model and why we’ve built the business the way that we have. We can add in these extra channels like womenswear or new product categories for no extra cost and leverage our existing network of showrooms, staff, e-comm – and again, there isn’t that investment in stock.
IR: In 10 years’ time, where would you like Institchu to be?
JW: Honestly, a household name. So when people think of suiting, it doesn’t even come to mind that they would go and buy a suit that’s been made to somebody else’s sizing and design. They’ll think, ‘I’m gonna get a suit. so I’ll go to Institchu and design a suit made to my measurements, then have it delivered back within three weeks.’ But in 10 years’ time, it will be one week! One day.
RM: Thinking outside of suiting, we’ve got a whole new product range. I really think Institchu could be the focus of your wardrobe, where you use your individual measurements to get anything you want, exactly how you want it, in whatever size you are.
JW: Shoes, jeans – everything.
RM: The product range is live now. We’ve launched over shirts, some new bomber jackets coming, overcoat, polo shirts. We’re thinking of how we can expand our product line made-to-measure.