Natalie Massenet, the fashion entrepreneur who founded the designer fashion portal Net-a-Porter, chaired the British Fashion Council for four years and today runs Imaginary Ventures, a venture firm that’s focused on consumer startups, took the stage a bit ago at Vanity Fair’s New Establishment Summit. There, she was asked why Imaginary has funded more women founders than men (it has just happened that way, suggested Massenet). She was also asked about starting a brand and enumerated the ways that it has become dead simple to do it, from services like Shopify that make launching a storefront easy, to third party logistics companies that make shipping product a cinch, to services like Affirm that make it easier to get paid.
Massenet, of course, noted the challenges of operating in a sea of other brands, many of which are inclined to copy one another. In fact, she recounted that when Net-a-Porter launched, it did so, to her great aggravation, with copy published sideways and upside down on its website — a move that was then replicated by rivals that believed the mistake was by design.
But she also underscored the reasons that direct-to-consumer brands should, if they can swing it, set up actual brick-and-mortar spaces, which a growing number are doing.
Said Massenet: “Consumers want service, and they want to shop how they want to shop, when they want to shop. At Imaginary, we believe that stores are obviously an integral part of shopping, and there’s a big trend out there about direct-to-consumer. [But] direct-to-consumer should not mean online only. Direct-to-consumer to us [at Imaginary] means the product gets to you wherever you are, whether you want to go into a retail store [or shop online].”
Imaginary is an investor in the clothing company Everlane, she noted, where every item it sells is available online, but where there are now four stores — in San Francisco, Manhattan, Brooklyn, and L.A. — where “queues of people every Sunday” stand outside.
“We say to the people, ‘Why are you in line? You know you can buy everything online,'” said Massenet. “And they say, ‘We want to be part of this.” (Interestingly, Everlane’s founder and CEO Michael Preysman told the New York Times in 2012 that he would sooner “shut the company down before we go to physical retail.” It took a few years longer for him to decide that “meeting the customer where they are” is a more winning recipe.)
Ultimately, she’d continued, “community” is a big part of why stores exist, and in a world where Amazon is eating up the retail world, fostering a sense of fellowship with consumers is becoming more crucial than ever. Brands that will thrive are “not competing on price,” she said. “They have high brand values.” And they make shoppers “feel great when they shop from them.”
Certainly, a lot of venture-backed outfits have already absorbed the message that they need a physical presence. Among the dozens of consumer startups that started online but later created real-world outposts are Glossier, Warby Parker, Casper, Away, and Outdoor Voices.
Third Love, which has been selling women’s lingerie direct-to-consumers online for six years, also just opened its first “concept” store, in New York, after years of fielding requests from its customers for a location where they could see its merchandise up close.
That doesn’t mean the leap into offline is an easy one, or that it will ensure a company’s success. For one thing, the field is more crowded by the month. Investment in VC-backed U.S.-based direct-to-consumer startups climbed to $131 billion last year from $89 billion in 2015, according to VentureSource.
It’s also a lot like like starting another, separate company. Third Love’s CEO Heidi Zak wrote in August that her startup is still deciding whether to move forward with physical stores. The primary reason, she said: “Physical retail is simply a different animal,” she noted. The “operational differences are enormous.”