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 Model:
Threadless Model:
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.
Inventory control:
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.
References:
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