Hi, this is Leena Rao with TechCrunch TV, and we're here with Brian Spaly, CEO of Trunk Club, an awesome new start up that caters towards men's shopping habits. Brian, welcome.
Thank you. Thanks for having me.
You know, I first wrote about Trunk Club a few months ago and got such an overwhelming response from so many men and readers that just love the model. Why don't you share exactly what Trunk Club does?
Sure. So at it's heart, Trunk Club is a way for guys to get awesome clothes without having to deal with the hassle of shopping, either in the malls or in stores or even just going online. We try to take all of the hassle out of it and make it real easy for you to look great.
So, how does that actually work? Most of our customers sign up on the internet on our website, they're assigned to a personal stylist at Trunk Club headquarters in Chicago, and he or she will work with them to figure out what their needs are, what they'd like to get out of the process, you know, it could be as simple as, hey I need better jeans and shirts to wear to work.
It could be more complicated, like, I need a, you know belt, shoes, blazer for this specific event, but in any case, we learn as much as we can about what a guy needs and then we put together an awesome set of clothes, we pack it up in a trunk, and we send it out. We pay for shipping in both directions, and all the guy has to do is pay for the clothes that he keeps.
So it's really sort of a zero risk way for guys to make an attempt at upgrading their wardrobe and having a style expert with them every step of the way.
So Brian, basically, you're solving a couple different problems here. First, men, particularly my husband, have, you know, a particular, some men, to go to the mall, and the whole shopping experience, sifting through racks, that sort of thing.
Yeah. And then second, you're also bringing a personal stylist, which a lot of men not be able to afford or know how to access. To, through their wardrobe, and so, you know, these are two things that are really sort of new, that are not only men, but also to the online space. I'm just wondering, what's been the response so far since you enacted this model a year ago?
Well, Leana, you said it. You got a lot of response in your first article about Trunk Club on Tech Crunch, and we were lucky to get a lot of response from those same folks signed up for our service, and we hope that most of them have had a really good experience. They're spending a lot of money with us, and they're spending a lot of time with us.
And I think what we're finding is, we're just able to do a better job catering to a guy's needs. We all like looking great, but very few of us know how to make that happen, and enjoy the process of the hunt.
Right.
Now I'm sure we all have a buddy or two whose like great at finding super deals on sale or really knows how to bargain shop, but for most of us, we don't even really necessarily know what we're looking for. but once we find it and put it on and feel great, then we do know. So I think a big part of what Trunk Club does is sort of connect the dots there.
Which is, we put great options in front of you, we listen when you tell us what you're looking for, what your budget is and your style preferences. And then, perhaps most importantly, something we do that you can't really do at the mall or online is, we adapt and we learn from you. So every time we send you a trunk, say an average first trunk is ten items.
You might only keep three or four items in that first Trunk, but we also learn a lot about your preferences from what you don't keep.
So, each time that we have an interaction with you we're learning more and what we find is the satisfaction rate and the keep rate, or the refund rate, the refund rate goes down and the keep rate goes up as is a satisfaction with each subsequent trunk, because our stylist is able to learn from you in that process.
Yes, I mean that is a huge part, it sounds like a model, in terms of how the business model works, how do you guys end up making money off of this. So it's a great question. We buy just like a retailer would. So we buy at wholesale and sell at retail. So really that's where the gross margin is for Trunk Club.
And then, you know, we're able to save versus a conventional retailer in that we don't have, you know, an expensive real estate cost of being in a mall or in a private shopping area, and security, and hourly employees, and all the kind of things that come along with the traditional retail experience.
And we're able to pass on that savings in the form of commission to our sales reps and then also in terms of just offering a whole bunch of other things to our customers such as free shipping, a really cool box, and twenty-four seven customer service. And an iron clad return policy that basically is the same one that we had at Bonobo's when I was working there, which is any time, any reason.
We trust you and, you know, building that trust with the customer is a cornerstone of sort of what Trunk Club is about.
Yeah, so, you know, I should have mentioned though you are one of the co-founders of Bonobos, another e-commerce site for men's clothing. Where do you sort of see generally the trend going with e-commerce? Is it sort of bringing an offline experience to the online experience and making things easier?
Is it more than just being able to have like an Amazon Marketplace like experience? Where do you see the market going in the future?
So, it's a great question, and one we spend a lot of time thinking about at Trunk Club headquarters in Chicago. I think what you first saw was, you know, e-commerce period. Just people being able to take what they would sort of do via a catalog or a conventional retail and offer that online. And then you saw more marketplace options such as like an Ebay or auction sites.
More recently in the last several years we've seen specialty niche retailers such as Bonobos that are only available online and that are really focused. Pretty much everything that Bonobos does and does so well they do via the internet. So I think you're going to continue to see the emergence of niche retailers that customers sort of develop a cult following and use things like Twitter and Skype and other technology web 2.0 kind of add-ins to provide a great service to their customers, and then in the last couple years you've also seen flash sales, and sites like Gilt, Rue La La, HauteLook.
I think that the next phase, and the phase that we're principally engaged in, is what we call assisted commerce. It's the notion of having all of the advantages of technology at your fingertips and being able to use the internet to find customers, and to show your customers what you're about, but at the same time have a human go that last mile with customer service.
The fact that at Trunk Club you can email us or call us us, twenty-four seven, you're mapped to an individual, who's an empathetic, college educated, really helpful person. Gives us a totally different flavor, then say, going on to, you know, XYZretailer.com and buying a pair of pants or shirt and really not knowing exactly what to expect in terms of customer service or the whole process.
So I think you're going to see a continued move towards more hands on, really thoughtful customer service, and the assisted aspect of it is something I think people really like. Getting back to the notion of a really helpful, thoughtful person on the other end of the phone. You know, never having to call and wait on hold.
Those kind of things, I think, are increasingly important today to consumers.
Yeah, and touching upon that, I know you guys are launching today a new sort of customer support angle to your website. Could you explain what you're launching and how it's going to help some of your customers?
Sure. Today we're launching the customer center at trunkclub.com which is the first time that we'll have a place on our website where customers can log in to manage their account to engage with their stylist and to do a host of other things. It's basically our first salvo into the world of, like, very hi-touch technology, like, call it a portal, where we can really do a lot more for the customer asynchronously.
So far, we do a ton over the phone and over email, but we also want the customer to be able to engage with us and to reach out to us. And so, opening up some more functionality on our website and beginning the process of really building out what we hope will become, you know, a virtual closet, a place where we can push a lot of information about the clothing that our customers are buying from us to them, you know.
You bought this shirt from us three months ago. It turns out we got some new pants in today that match that shirt really well and we wanted you to know about that. Sort of...it's a place for us to engage with our customer online where they can kind of choose how much they'd like to do with us. But it's really opened up yet another avenue for us to provide that customer service, that style support, and in general, hopefully push meaningful content to our customers online.
How have...I'm curious, how have brands responded to your model? You know, I know you guys have a number of brands that you offer to men. You know, have you gotten a sense of how they feel about what you're offering?
Yeah, it's been really interesting, Leena. Over the 18 months since we launched Trunk Club in Chicago, we've been to, I guess... sort of this is our fourth trade show season that we're just entering. And it's amazing how much the brands have begun to really embrace what we're doing. When we first started, I think it was, "Okay, you're like the Bonobos guy or you're one of the guy's that helped with this pants company.
You know, what's the story with Trunk Club and how does it work and is it an e-commerce business? We're not really sure." Since then, I think they've seen us grow really rapidly and they've begun to see that we introduce their brands to a very hard to find, yet very sought after consumer, which is, you know, an affluent, urban guy who has a lot of money and not a lot of time and wants to learn more about fashion but doesn't know how to do that.
So, in a way, we kind of think of ourselves as an advertising arms for some of our best brands. And, you know, folks like John Varvados and Jack Spade and Jeremy Argyle and Eaton Shirts. You know, Eaton is a great example of someone that...it's a brand that we have opened six months ago. Our orders with them for fall will be, you know, five times the size of the orders that we initially placed with them.
They're really excited about what we've been able to do to grow their presence in the United States as they've...you know, they're a Swedish brand with a big focus in Europe and they're just making a big push into America. And I think they see us as a really helpful partner for educating guys on why they make such a great shirt and why our guys should want that shirt.
In fact, I'm wearing one today and, you know, they have embraced us. Eaton has been an amazing partner for us. Jeremy Arguile, another boutique shirt maker in New York, I think, is the same way. And these are brands where we're really excited about them because they're not available in the big department stores, and they're not available at every boutique in America.
They're more of a special or a newly discovered brand for our guys.
And so it's a nice partnership. It's a symbiotic relationship that we can offer the vendor. A few folks have been a little bit reticent to work with us, but I think that's primarily because they're a little bit slower to move in general in terms of opening new retail accounts.
Right.
And over time, we've basically found that persistence pays off and most folks have been really glad they did open an account with us over time and are continuing to do very brisk business with us as a result.
Well, I know that you said that you're growing at five times what you were last year, and that's just great for the company. I know you're also, announcing some funding today. Would you like to share some of the details on that?
Yeah. So we're really excited to announce that we just closed a series A financing with USVP and Greycroft leading the round as well as our current investors, Anthos Capital from from Menlo Park and also Apex Ventures, a smaller VC firm in Chicago, is going to participate. So we've got a great group of new investors and our current investors, Anthos stepped up for this round as well and showed us a lot of support.
We're excited to announce the total funding is $11 million and it's really just growth capital to to advance the company in all directions.
So, more inventory, better marketing and advertising, continued emphasis on the technology build out. We've been adding to our development team, and we're really excited about the engineering talent that we now have on hand on the team in Chicago. And as well, it's just really a great stamp of approval from the Valley.
Folks have recognized that we have a really valuable customer and a long-term value proposition to that customer that they're really excited about supporting. So this is a great day for Trunk Club and I think a really nice validation of what we're trying to build here.
Well, I really just hope that you extend the service to women soon because I would totally use this.
Lena, we get a ton of requests for Trunk Club for women. And I have to be honest, it's something we're thinking about. But right now we still have so many guys that we can serve, that we're really just focused on that at the moment. But we hear you. We hope that one day we'll be able to offer you this same great service as well.
Absolutely. Well, thanks, Brian. I appreciate your time, and keep us updated on how Trunk Club's doing.
Will do. Thanks for having me.
A gentlemen can sign up via the website, pick preselected looks, and answer a small questionnaire with questions like “where do you shop right now?,” “what’s your favorite item in your closet,” sizes, price and color preferences and more. A stylist will then call/contact the customers via their preferred method of communication. Once the stylist gets an idea of the customer’s style, he or she will send a “trunk,” of clothes and ship out via Fedex a handpicked collection of shoes, pants, shirts, and more.
Once the customer receives the order, he can try on the items and send back the clothes he doesn’t like in a prepackaged box. The customer is only charged for the clothes he keeps and isn’t charged for any shipping costs. Outside of of Illinois, customers don’t pay sales tax either.
Trunk Club, which has over 3,500 active clients, buys clothing at wholesale and sells it at a normal retail markup. There are no sales/discounts on clothes and Trunk Club stocks its own inventory. Customers don’t pay anything extra for them as they would in a fancy department store.
Trunk Club’s CEO Brian Spaly has considerable experience in the online retail world. You may remember Spaly from Bonobos, a recently-funded startup that makes custom-fit pants for men. Spaly and Andy Dunn founded Bonobos together and parted ways due to differences in vision.
The company is also launching a brand new customer center where users can now request additional orders on-demand based on current needs, provide detailed feedback on items in previous orders, and manage their clothing preferences in an interface. The new feature will also utilize data around each customer’s unique preferences to provide targeted recommendations with every order. Spaly says he is trying to bring the Netflix model of contextual suggestions to clothing. The new funding will be used for additional hiring marketing, and further expansion.
In the end, Spaly explains “Trunk Club about helping guys never have to go to the mall again.”
