Brandless, Bonobos and Rent the Runway on the unparalleled power of community

(L to R): Nick Brien, Maureen Sullivan, Micky Onvural and Tina Sharkey
(L to R): Nick Brien, Maureen Sullivan, Micky Onvural and Tina Sharkey

These are the brands which have learned to love discomfort in the face of dramatic change -- and it's paying off.

Have a guess at how many Americans own shares today.

Fourteen percent.

"So there’s 86 percent of the population who don’t get any benefit when Facebook pops," said Nick Brien, CEO, Americas, Dentsu Aegis Network at the Effie Next 50 summit in New York City on Thursday.

There’s a reason why 50 percent of Fortune 500 companies are not growing profits or revenues today: we’re in the midst of a crisis in the effectiveness of advertising and marketing.

He continued: "The old fashion model of capitalism which is just about public companies making money for Wall Street is over.

"There’s been a fundamental shift in the balance of power. When I started in marketing, I lived in a brand-led world -- you changed consumer behavior. But now we live in a consumer-led world. It’s about changing your brand behavior, it is about personalization, it is about relevance, it is about engagement."

In this new world marketers must learn to love discomfort or risk becoming entirely irrelevant. Bonobos, Brandless and Rent the Runway are loving discomfort like no-one else.

That’s because their brand DNA is embedded in the power of purpose, community and word of mouth, fuelled by that massively overused word we all know and love to hate: authenticity.

Maureen Sullivan, COO at Rent the Runway, said 94 percent of its customers throughout the brand’s almost 10-year history have come organically. All driven by word of mouth.

She explained: "It’s this moment when you’re at a wedding wearing this amazing dress and someone says, ‘you look great -- I love that dress.’ And all she needed to say was ‘thanks’ -- she didn’t need to be an infomercial for Rent the Runway to a stranger at a loud wedding, but she was, over and over and over again. Thank God for that, given how capital-intensive our business model is, there really wasn’t money to spend on marketing in the early days.

"Flash forward to today and we’re now getting women dressed over 120 days a year who are part of our subscription service and we have just seen what we refer to as word of mouth 2.0 continuing to accelerate."

The founders did not expect to become the world’s largest dry cleaner. But the market forced their hand to the point where they now have a 250,000 sq ft dry cleaning facility in New Jersey and are immersed in a game of how quickly they can send clothes out, get them back and fly them out the door again.

There was no off-the-shelf technology to service such a demand, but Rent the Runway transformed with consumer need to create it (with immense success).

"It’s a great business model and the inventory ROI is great and the customer demand for what we’re doing is off the charts, but this is not for the faint of heart," she said. "This is not normal logistics."

Sullivan explained how purpose has been a major driving force in the brand’s success as well.

Customers are encouraged to review their outfits -- something that had designers very concerned in the company’s early days.

"There were a lot of designers who didn’t want to see what real women in their clothes being real," said the COO. "They’ve changed their mind, thank God. We have designers obsessed with seeing the scale and depth of reviews. They give their weight and bra size to the community, not Rent the Runway.

"They’re taking the time to give us that information because they know someone is going to want to use that outfit. That magic of the community that cares about what we’re doing and trying to make the experience better for everyone else is lightning in a bottle."

Customer reviews are the brand’s main driver of growth today.

Brandless is reaping the rewards of chatter too. The wellness and home products company, which aims to redefine what it means to be a brand in today’s world, has enjoyed dramatic hikes in sales through its purpose-driven agenda.

Everytime a customer checks out at Brandless, it donates a meal to Feeding America. These gives are enhanced on the third of every month -- and people wait for it.

People who know about this give are 80 percent more likely to recommend the company to a friend, said Tina Sharkey, co-founder and CEO. This is done with zero marketing. The company has donated around four million meals through its work in the past two years.

"We’re built for profit and for purpose and we believe those two things can live together harmoniously under one company," she told the crowd. "We also believe that people should be living more and branding less and brands are not about what someone tells you about you, it’s what you say about yourself."

Building this kind of brand starts with sculpting the right culture internally. New employees get a welcome box and 100 meals to help understand how Brandless walks the walk.

Sharkey has flipped the supply chain model so that it’s run quite literally by word of mouth.

Brandless found more success in customers’ sharing images of its products than pushing sales through its own high-end photoshoots. It first noticed this when one photo went viral and the firm ran out of stock for that particular item.

Now, the social media managers and inventory heads are looped into one channel so when Brandless sees a product gaining traction, it can prepare to ship more. The "likes" actually relate to the supply chain. And these photos are put back into its funnel -- something Sharkey calls "the love loop."

"It’s what a friend tells a friend, and we have to listen to friends all the time. On day one we listen, and on day two we serve."

She added: "Social media is facilitated media -- it is not planned media."

Brand model and community culture is something Bonobos did not change when it was bought by Walmart two years ago. Today, the model is the same because Walmart recognizes the power of the brand, said its CEO Micky Onvural.

Bonobos is now on a journey to build on the strength of is direct-to-consumer-born community -- something that can easily wane if done wrong.

The brand slipped up around three years ago when it started developing a mobile app, said Onvural.

She explained: ‘The thinking was ‘consumer is going mobile we must have an app,’ and it was a catastrophic waste of time -- a year’s worth of time --of engineering resources which we all know are very precious.

"Men shop 1.2 times a year for clothing. So why are they going to bother downloading an app? So what we should have been doing is making sure we invested in our web experience. At that time we hadn’t started invested in digital marketing which sounds crazy.

"That’s a business decision we paid the price for. Where we got away from ourselves as a business on it was what everyone was doing and not what the consumer was doing. That was the fundamental error of judgement."

Onvural stressed that "the more things change, the more things stay the same." And if you stay focused on what the customer is doing and keep the customer as your compass, you’re not going to go too far wrong.

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