How a LA shoe brand made the direct-to-consumer switch
- As a DTC brand that produced only a few dozen styles annually, manufacturing in an American factory was commercially viable despite higher costs than China. Reduced lead times and closer relationships with manufacturers improved the product, says founder Haley Boyd.
- The margins on DTC sales are often lower than at wholesale. Marais prepared for the transition by maintaining an e-commerce infrastructure and engaging with its grassroots community via social media even when it was sold in stores.
- The DTC model allows for greater agility and experimentation. Boyd trialled different product categories, including ready-to-wear. Marais also sells one-off collections in shops, though it sees collaboration with stores more as a marketing opportunity.
In 2013 Haley Boyd did the unthinkable. The accessories brand she set up in 2009 was stocked in an enviable roster of stores including Steven Alan, Shopbop and Urban Outfitters. Marais USA was selling well — too well — and Boyd found she was gradually losing creative control.
“Everything was made in China, but to make the MOQs [minimum order quantities], if I didn’t get an order from literally 100 stores, I couldn’t produce the styles that I wanted,” she explains on the phone from her Los Angeles home. “Ultimately, what got made was what [buyers] wanted… and stores might not pick what you believe to be your best style because it might compete with something else they bought from another brand.”
In addition, increasing labour costs had tripled the price of manufacturing shoes in China in the space of four years. “Marais was always the smallest brand at the factories making our shoes, so we didn’t have a lot of bargaining power.”
So Boyd completely restructured the business. She stopped doing press, going to trade shows and taking orders from wholesalers. She moved manufacturing from Dongguan, China, to downtown LA.
Boyd estimates that manufacturing in LA costs her business twice as much. But the pros far outweigh the cons. Costs are stable. Lead times reduced by 50 per cent because the factory is less than a mile from Marais’s warehouse, which has helped her be more responsive to customers, increase cash flow and reduce the brand’s carbon footprint. Transit time went from 30 days to 10 minutes. “A factor that isn’t as measurable is our relationship with our factory,” Boyd adds. “Being able to pop in to meet about development and check on production helps to foster a much stronger relationship.”
A brand built around personal style
For many young fashion brands, bending to a buyer’s requirements is tolerated as a necessary evil for a business to grow sales. But for Boyd, whose brand had become inextricable from her personal style, it was a deal breaker.
Boyd’s brand evokes an easy, mid-century American style with the understated elegance of an off-duty Grace Kelly. The aesthetic is showcased to striking effect on her personal Instagram.
“The link between the brand and my personal style happened organically, but now it is something that I put a lot of energy into”, says Boyd. “When we post an image on Instagram, we immediately see people shopping on the site. It is part of the business model and marketing.”
Moving production to LA enabled Boyd to put her personal style front and centre. “The minimums were so low in LA that I could just produce the styles that I wanted and sell them on my website. I brought it back to how I started – über-simple designs in just the essentials in fun colours”.
The business has six product drops a year, with each delivery comprising approximately eight styles available in two or three colourways. Aside from the occasional one-off collaboration with a retailer, products are sold exclusively via the Marais USA site. The Jardin, a mid-block-heeled strappy sandal, is the company’s bestseller.
Many designers who make the shift from wholesale to direct-to-consumer are disappointed by the margins. For Boyd, the transition was made easier because she was careful to maintain the grassroots, direct-to-consumer following that she had built since launch. She estimates that even at the height of selling collections via wholesale, the revenue split for wholesaling vs. DTC e-commerce was 75 per cent to 25 per cent. “Having that in place before making the leap to entirely direct-to-consumer made it more of a calculated decision than a leap of faith,” says Boyd. “I definitely recommend establishing e-commerce and seeing some success with it before making the jump.”
Since e-commerce had remained a significant part of the business, she consistently invested in the brand’s website from the get-go. International fulfillment and other operations were in place, so a big outlay was not required. The agility of the DTC model has allowed her to trial other product categories, including ready-to-wear. She recently made the decision to wind up this side of the business, citing difficulties creating ready-to-wear collections on a small scale. Instead, Boyd says she will focus on building Marais USA as an accessories-only brand.
Customers can access Boyd’s world via her personal Instagram account(nearly 55k followers) and the brand’s Instagram account (nearly 45k followers). She says that a “significant” number of these Instagram followers are also her customers.
Boyd no longer works with a press team because she has found this muddies the direct-to-consumer relationship. Instead, resources are focused on “sharing beautiful images directly with our community”. Now, her only employee is an office manager.
Marais USA reaches new markets through one-off projects with select partners such as San Francisco-based boutique Lisa Says Gah. In March, Marais USA launched two sandal styles in conjunction with Alex Mill’s debut womenswear collection. These collaborations are a marketing tool rather than a way to bolster the bottom line. They are a useful test responses to new styles and colourways, as well as being “a great opportunity to acquire new customers, which is a nice bonus since the margins are so much lower than e-commerce”, Boyd says.
“The business is much more streamlined and it is growing organically. I am so much closer to the customer now,” she says. “It’s important to take advantage of the data you have access to from your direct customers. We know within a couple of hours of releasing a product if we’ll need to restock it right away.”