BONOBOS’SBLUE-OCEANSTRATEGY IN THEU.S.

MEN’SFASHIONRETAILINDUSTRY
ILLUSTRATION
CAPSULE 6.1

It was not too long ago that young, athletic men struggled to find clothing that adequately fit their
athletic frames. It was this issue that led two male Stanford MBA students, in 2007, to create Bonobos, a
men’s clothing brand that initially focused on selling well-fitting men’s pants via the Internet. At the
time, this concept occupied relatively blue waters as most other clothing brands and retailers in
reasonable price ranges had largely focused on innovating in women’s clothing, as opposed to men’s.

In the years since, Bonobos has expanded its product portfolio to include a full line of men’s clothing,
while growing its revenue from $4 million in 2009 to over $100 million in 2016.

This success has not gone unnoticed by both established players as well as other entrepreneurs.

Numerous startups have jumped on the custom men’s clothing bandwagon ranging from the low-cost
Combatant Gentlemen, to the many bespoke suit tailors that exist in major cities around the United
States. In addition, more mainstream clothing retailers have also identified this new type of male
customer, with the CEO of Men’s Wearhouse, Doug Ewert, stating that he views custom clothing as a
“big growth opportunity.” That company recently acquired Joseph Abboud to focus more on millennial
customers, and plans to begin offering more types of customized clothing in the future.

In response, Bonobos has focused on a new area of development to move to bluer waters in the brick-
and-mortar space. The company’s innovation is the Guide-shop—a store where you can’t actually buy
anything to take home. Instead, the Guideshop allows men to have a personalized shopping experience,
where they can try on clothing in any size or color, and then have it delivered the next day to their home
or office. This model was based on the insight that most men want an efficient shopping experience,
with someone to help them identify the right product and proper fit, so that they could order with ease
in the future. As Bonobos CEO Andy Dunn stated more simply, the idea was to provide a different
experience from existing retail, which had become “a job about keeping clothes folded [rather] than
delivering service.” Since opening its first Guideshop in 2011, the company has now expanded to 20
Guideshops nation-wide and plans to continue this growth moving forward.

This strategy has been fueling the company’s success, but how long Bonobos has before retail clothing
copycats turn these blue waters red remains to be seen.

Bonobos’s Blue-Ocean Strategy in the U.S. Men’s Fashion Retail Industry

© Patti McConville/Alamy Stock Photo

▪Given the rapidity with which most first-mover advantages based on Internet
technologies can be overcome by competitors, what has Bonobos done to retain its
competitive advantage?
▪Is Bonobos’s unique focused-differentiation entry into brick-and-mortar retailing a
sufficiently strong strategic move?
▪What would you predict is the likelihood of long-term success for Bonobos in the retail
clothing sector?

 Given the rapidity with which most first-mover advantages based on Internet
technologies can be overcome by competitors, Bonobos do the following unique
focused strategy to retain its competitive advantage.
As the counter-response, Bonobos focused on Blue-Ocean Strategy by establishing a new area of
development in the brick-and-mortar space : Guideshop – a store where you can’t actually buy
anything to take home and instead allows men to have a personalized shopping experience,
where they can try on clothing in any size or color, and then have it delivered the next day to
their home or office (differentiation). This strategy was emphasized on value creation and
innovation and based on the convenience of the customers and not on the competition with
rivals. It eliminates job about keeping clothes folded by delivering service which in turn can
reduce the number of staffs in store (can reduce cost than other existing retails) and creating
customer value with an efficient shopping experience, with someone to help them identify the
right product and proper fit and raises the coverage of the strategy by expanding to 20
Guideshops nationwide and planning to continue the growth.

 It is a sufficiently strong strategic move because it is stated that this new strategy has been
fueling the company’s success as blue waters before copycats seen to turn it red.

 To predict the likelihood of long-term success for Bonobos in the retail clothing sector,