The Threadless Way!!
The article ‘Your strategy needs a strategy’, highlights that companies should shape their strategy depending on how predictable the industry is and how much influence they (the companies) have in changing their market environment. Accordingly, it suggests that the Fashion industry should have an Adaptive strategy, as the industry is highly unpredictable- tastes change, trends come and go without a reason, and they have little control or influence over what stays in fad. This requires companies in the Fashion industry to have a strategy that allows the quick manufacture and testing of their products. They should be tightly linked with manufacturing, inventory and logistics to be truly successful. Threadless is the best example of having incorporated the most challenging strategies we have discussed so far.
This week’s article, ‘Going from global trends to corporate strategy’, discusses the need to analyze trends and sub-trends that shape the global landscape in greater detail. It states that using this information, companies should restructure their product portfolios without affecting their core business to achieve strong growth and profits.
Threadless provides a platform for the designers to share their work and have it scored by an active and eager community of people who decide which design gets printed onto clothing and other apparel, and consequently, decide which product enters the market. The social community also decides the number of design prints that will be available to the users. The scoring of designs is done over the period of a week and the winning designer is flown to Chicago where the company is located. In addition, the designer is given $2000 cash and a certain amount of royalty over each t-shirt sold.
Thus, Threadless represents a distinct community driven company that not only crowd-sources the design ideas but has taken it one step further by having the community decide on important inventory management decisions. According to me, this is the most unique thing that makes it profitable.
Typically when a product is developed by a company, they come out with numerous ideas narrow it down, perform market research, test their product and eventually take it to the market where people see it. This might or might not work in their favor. Threadless, on the other hand, asks people what they want them to sell and the consumers themselves provide the ideas. This model is enhanced by allowing the community users to rate the ideas, thus giving the sellers a stronger assurance of the success of their product well before it has been produced.
Trend Analysis: Scoring system
The designs submitted are voted on a weekly basis by an active community of about 2 million designers. This ensures a response of at least 3ooo submissions daily. When the users/active community members vote, they select the most popular ones and Threadless automatically prints the design most in demand at the time. Having the scoring system incorporated into the business model helps them have a pulse on what the current trend is and stay ahead on the trend curve.
Traditionally, inventory questions have been left to management. Threadless operates in an unconventional way in that it simply asks the users ‘how many should we print?’ thus reducing their inventory costs even further. This ensures that every t-shirt is bought in the market.
The Threadless business model is both adaptive and a trend learner. Making the company lean, giving control to the community to choose over the design and the product inventory has made this a winning and sustainable model. Companies who want to keep their model adaptive consider such model, where they know the demand before producing the goods. One might question how long the users would be engaged in such a platform, but I don’t see a reason why members from this community will drift or leave this anytime soon as they are driven by sheer interests and passion.
One may question the staying power of such a platform, but I feel that it would not fade any time soon as it is a business driven by a community of like-minded people supporting artists and creativity.