In 2011, Victoria’s Secret was the leader in the underwear market, which produced bright youth underwear. It is the bright color that angered the founder of ThirdLove. She thought that there was no comfortable underwear on the market for women who did not want to wear lace or bright colors. So ThirdLove appeared. Today the company is estimated at $ 750 million.
Within the framework of the “ Added Value ” project, Mikhail Prikhodko talks about young companies several times a week, who built a large business on a simple product at the expense of a creative approach to packaging and marketing.
- Website: Thirdlove.com
- Year of launch: 2013 year
- Business today: revenue of $ 80 million in 2016
- Employees: about 500
- Founding age: about 30 years old
- Previous founders activity: google employees
In 2011, Victoria’s Secret was the market leader in lingerie . But this brand focused more on young women and released youth underwear in bright packages. The recipe for creating “added value” from Victoria’s Secret is to fold the laundry into a bag filled with gift paper and sprinkle with perfume.
It was the bright color that angered the founder of ThirdLove when she bought herself a bra for a party. “I was so ashamed to carry this bright pink bag that I shoved it in my black bag,” says founder Heidi Zak. She thought that there was no simple and comfortable underwear for adults and wealthy women in the market who did not want to wear lace or bright colors. So ThirdLove appeared.
How to start
In December 2011, ThirdLove founder Heidi Zack bought a bra to go to a party at Google, where she worked then. She went to Victoria’s Secret, which was the market leader in lingerie. According to Heidi, there she bought a bra, which was very uncomfortable. Heidi wanted to find lingerie that would fit better with her body, she believed that millions of other women also did not have the opportunity to purchase the perfect underwear at an affordable price. But instead of returning the hated bra, she decided to try to create her own line of underwear. “I wondered: why modern bras are so uncomfortable, and why nobody can change this industry?” Says Heidi.
So, Heidi Zak and her husband David Spector founded ThirdLove. Heidi saw a good opportunity in this project for several reasons: first, the market leader Victoria’s Secret owned only 29% market share, and young women had already switched to online purchases by that time. Thirdlove made and makes its product, based on a large number of parameters, such as breast shape, cup size and density of the strapless. These parameters were developed by Thirdlove on the basis of data from more than 11 million women from an online questionnaire to create perfect bras, paying attention to intermediate sizes.
After studying the statistics, Heidi and David found out that women buy about 4 bras a year, which means that if they produce quality goods, they can enter the market. They calculated that the price of one bra should be about $ 68 to reach an audience of adult women who could afford the wrong Victoria’s Lingerie but could not buy luxury underwear for $ 200 from brands like La Perla .
In June 2012, they left Google and invested all their savings ($ 50,000) in a company that was launched in 2013.
Soon, a journalist from ABC’s Good Morning America called Heidi to talk about Thirdlove. After the transfer, people began to go to the ThirdLove site en masse, the server could not stand it and the site stopped working. Heidi admits that this technical error has let them down a lot with sales, but still people found out about them.
To collect the necessary data, Heidi and David purchased the application Indi Custom, which at one time designed jeans, based on the size of the users. Heidi and David changed the Indi technology to make the app fit bras, eventually they created the ThirdLove app, in which users downloaded 2 of their photos in their underwear to calculate their body size and make up the recommended bra size. Each ThirdLove bra has up to 35 parameters that are unique to each size.
But despite all this, by 2015, after two years of work, the company still did not reach enough customers, and the money began to run out. “We sat down and asked ourselves:“ How can we make women buy our bras? If we do not do this, we will die within the next year, ”says Heidi.
The founders found the solution in the program “Try before you buy”, which was launched in March. For the cost of delivery, ThirdLove sent a bra to customers, which could be worn and handed over for 30 days for free if the goods did not please the buyer. The plan worked. In 2016, more than 75% of NewLove’s new customers came from this very program. Today the share of such customers is 10%.
The company does not use Photoshop, adheres to the policy of Body Positive and removes plus-size models.
The company’s website has a questionnaire with which the website will automatically select the most suitable bra for the client. The site will need answers to questions about growth, the brand of your bra, chest and cup girth, whether there is asymmetry, as well as how much you already wear your bra and how to fasten it. But to get the result you must specify the mail.
Today, the company provides 24 types of bras in 74 sizes. ThirdLove still uses customer data to determine future projects. For example, the company recently developed a line for women with a non-standard cup size N, which is not in regular stores. ThirdLove claims that bras of this size brought the company $ 1 million in revenue in the first five days of sales, and the entire collection was sold out in 3 weeks. The company’s sales increased from $ 1.5 million in 2015 to $ 80 million in 2016.
In Instagram, ThirdLove has about 214 thousand subscribers. They are famously positioning themselves, not as linen for everyone, but as linen on any body.
Today, the company has extended the warranty period to 60 days. With the goods you can do anything, even wash, and if suddenly the buyer did not like the product for any reason, you can return it.
In 2018, ThirdLove hit the Forbes annual list of the richest startups thanks to a venture capital of $ 30 million, including L Catterton and New Enterprise Associates.
Today the company is estimated at $ 750 million.
Why did they succeed
- Targeting The company has chosen a specific audience, to which stores in this price segment paid little attention.
- New approach to production and going beyond the standard service. ThirdLove solved the old size problem. In the shoe industry, for example, a part produces intermediate sizes, while in clothes and underwear there were only standard sizes that were not suitable for everyone. ThirdLove made comfortable underwear for women with completely different shapes. We personally faced an example when a more detailed scheme for measuring the size of trousers influenced the decrease in the percentage of returns of goods.
- Low price. Despite the great opportunities for customers, ThirdLove remains in the middle price segment.
Is it possible to repeat in the Russian Federation
In Russia, there are many European manufacturers of quality underwear. For example, Intimissimi or Etam, in which the price for a basic bra can reach 5,000 rubles. But even for this price, stores cannot provide as many sizes as ThirdLove.
The company La Senza, which produces bright underwear in the low price segment, left the Russian market in 2016, and premium underwear, like Agent Provocateur, is actively developing.
If the Russian manufacturer introduces the function of individual selection of sizes for a price less than 2000, it will cover a huge audience that is forced to buy clothes in cheap mass market.
In addition, the function of the application, which itself selects the size or the program “Try before you buy” for Russia is very unusual. Companies that are the first to introduce these new opportunities for customers in Russia will be able to stand out in the market.