Threadless is a t-shirt company whose business model has
caught my attention recently. I first heard of them from my high school friend
that’s a frequent customer. He always sports funny or clever t-shirts that I
hadn’t really seen anyone else wear. Me being a crazy cat lady, I was impressed
by the amount of kitty shirts I saw on Threadless’ website. Keep in mind that
being a cat lady isn’t easy because not all retail stores share the same love
of cats as you do! I was interested in picking this company for my report
because I really admire their business model (which I will describe later in
this blog). Threadless has a fresh and innovate way of doing business and I
haven’t heard of any other clothing companies that could compare to them. They
are a one of a kind company and I’m (actually) excited to learn and analyze
their business model.
Threadless is an online-based retail store that concentrates
on putting the community first. You can find men and women t-shirts and various
accessories (phone cases, backpacks, wall art, and home items) on their
website.
How It Works: Graphic designers submit their artwork to
Threadless under certain guidelines. After the community votes on their
favorite designs, the winning artwork gets printed and sold exclusively on the
website. The creator also receives $2,000, a $200 gift card to the website, and
an invitation to a forum where they can receive critiques and suggestions on future
designs. There are about six to ten winning designs that get printed and sold every
week. Threadless only produces a certain amount of shirts and once it’s gone,
it’s gone for good. In 2011, the company’s annual revenue reached above $30
million and continues to grow every year.
Because Threadless uses a crowd sourcing method of
operation, they attract many different kinds of customers; one of which being
graphic designers. Threadless receives anywhere from 100-200 different t-shirt
designs every day. This means that there are thousands of designers and artists
visiting the retail store’s website per week. The designers are a vital part to
their business model because without them, the t-shirts would have no artwork.
Threadless gives artists the amazing opportunity to gain publicity and earn
money while they’re at it. It’s also pretty neat to know that thousands of
people voted on your design and are wearing it on their shirt.
A big portion of Threadless’ consumers consists of those
that are actively involved in the community (AKA die-hard Threadless geeks).
These are the people that are constantly commenting on the website’s blog and
always voting on designs. They shop on Threadless because they know no one else
will be wearing what they have. This customer segment relishes on the fact that
Threadless is exclusively online and not available in stores. Because the
community votes on the designs being printed, they gain a sense of ownership in
the company. Threadless always asks the community via blog before they take
action on anything. For instance, a big corporation approached Threadless and
asked to have some of their shirts sold in stores. Before making a decision,
the company went straight to the community and asked for their thoughts.
The last customer segment of Threadless includes the young,
urban individual that simply enjoys the t-shirts. These customers don’t
particularly spend much time commenting and voting on the website, they just
visit Threadless to make their purchase. The styles of the shirts include
witty, weird, and sometimes cute designs that the urban consumer likes wearing.
These are basic shoppers that don’t find a great amount of value in Threadless,
compared to the other segments.
I really respect Threadless’ ability to involve the
community and make it an essential part of their business model. Instead of
paying attention to what other retail stores are selling and doing, they focus
on giving the people exactly what they want. What better way to ensure customer
satisfaction? The word-of-mouth throughout their community is so strong that
Threadless never has to spend money on advertising.
Sources:
http://www.threadless.com/
http://www.ducttapemarketing.com/blog/2011/04/07/how-threadless-nailed-the-crowdsource-model/
http://www.huffingtonpost.com/ernan-roman/relationship-marketing-in_b_829370.html
http://www.marketingpower.com/ResourceLibrary/Publications/MarketingNews/2011/4_30_11/Inspiration.pdf
Hi Jennie – I think you’ve made a really great choice here. The size is appropriate and there’s just enough differences between consumer segments for you to really be able to do a lot. I’d suggest thinking a little more about articulating what the value proposition is for the average shopper. They probably still find great value in the company’s offerings, I’d imagine its just entirely based off humor and style. Really interesting business model though and I think this will be a fun paper. Great job.
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