Case Study - Everlane, Radical Supply Chain Transparency

A company founded on transparency, Everlane makes ethical clothing at an accessible price point (LaMaack, 2018). Everlane was founded by 20-something Michael Preysman. Designer items, says Preysman, are marked up manifold. The retail price has to support the cost of making an item as well as the cost of brick-and-mortar stores. Also, designers layer it up with a hefty fee for themselves. A Louis Vuitton wallet, for example, retails for 10-11 times more than it costs to make (Shontell, 2012). 


The vertically integrated clothing brand is online only. Everlane produces everything it sells from scratch. It chooses which fabrics to buy, what colors to dye them, and what clothing to make. The inventory is exclusively maintained at the Everlane office. The aim is to avoid over-branding itself to build a strategic brand. All of their products are marked up about 2X. T-shirts retail on Everlane for $15 and cost about $6 to make. Everlane's first product was a T-shirt. Since then it has launched a line of sweatshirts, ties, and belts. Initially most of the apparel was for men, but it eventually launched more items for women (Shontell, 2012). 

Source: About, Everlane (2020). Available at: https://www.everlane.com/about. Accessed on: 1 October 2020


Lack of Variety 


Setting itself apart from other retailers, Everlane does not create multiple designs to give the consumer options. It wants to make one T-shirt very well - like Ralph Lauren's polo shirts. Only four items are released per month. Assuming a cost-cutting standpoint, the lack of variety is strategic. Everlane orders items in small batches and releases one or two styles at a time. It then observes the buying patterns of its customers. A large amount of dyeable griege fabric is purchased in advance so Everlane can produce and dye whichever styles and colours are forecast for the next season, enabling the brand to work close to the market. Nearly 600 items are ordered in every sale, most of them sell out. Of its 200,000 users, more than 30 percent are repeat buyers (Shontell, 2012). 


Using Supply Chain Transparency for Marketing


Everlane chooses to educate their fans about why they should invest in every piece they purchase instead of doubling down on marketing efforts to sell different products. When they launched their jeans they showcased the factories they were manufactured in, and spoke about their efforts to conserve water during production. This not only creates a marketing buzz amongst their target audience for the specific product launch, but also educates consumers about Everlane’s strong commitment to sustainability, which makes one feel good about buying from them (LaMaack, 2018).

The brand uses Instagram Stories to educate followers about their values, holding weekly “Transparency Tuesday” sessions where followers can ask questions that the company employees answer. They do a great job of using social media to give fans sneak peeks of upcoming launches (LaMaack, 2018). They created an infographic detailing how much it costs to make a designer T-shirt versus how much consumers pay for it. The infographic received more than 17,000 notes on Tumblr (Shontell, 2012). 


References


LaMaack, M. (2018) ‘Everlane: A Case Study’, Available at: https://www.fasthorseinc.com/blog/2018/03/everlane-case-study/, Accessed on: 12 June 2018.

Shontell, A. (2012) ‘Hot Startup Everlane Wants You To Know You're Being Screwed Over By Retailers’, Available at: http://www.businessinsider.com/everlane-2012-3?IR=T, Accessed on: 12 June 2018.

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