Bespoke, at one point, identified the affluent lifestyle. After all, one must have money to burn to be able to customize products to exact specifications. But now, as company executives revealed in recent earnings calls, Hooker Furniture (HOFT 0.11%), Men's Wearhouse(TLRD), and CafePress (PRSS) are introducing ways to customize sofas, suits, and home furnishings, respectively, at prices nearly everyone can afford.
Tailored suits for budget-conscious men
Men's Wearhouse is making a big play to provide tailored suits for everyone and hopefully rid the world of oversized pants. Currently, 43% of its retail sales and 47% of suit sales are slim fit.
Tailored clothing is currently driving growth in men's fashion. Men's apparel generated $57 billion in sales between January 2013 and July 2013, up 6% year-over-year, according to the NPD Group. While there was little growth in top men's apparel categories such as knit and woven shirts, there was double-digit growth in tailored categories, reports the NPD Group.
So there is demand for tailored offerings. Now, Men's Wearhouse has launched custom Joseph Abboud suits that are completed in three weeks. Men select from two price points -- $595 and $695 -- depending on the level of tailoring that they want.
All stores will offer tailored clothing by summer of 2014. In a few test markets, company executives say the "early read is very encouraging." Ultimately their strategy is to offer luxury quality goods at affordable prices. They are able to do so by leveraging their size to buy premium Italian fabrics and achieve factory efficiency that lowers the production costs. Company executives hope this new product offering will bring in new customers as well as encourage their regular shoppers to upgrade to more expensive items.
One-of-a-kind sofas
IKEA may have pioneered the concept of value-priced sofas, but it also meant it was likely your neighbor would have the same exact couch. Hooker Furniture is hoping to make carbon copies obsolete, and it's hoping shoppers feel the same way, ultimately boosting Hooker Furniture's bottom line. Furniture stores generate $65 billion in revenue each year, with the top four chains representing 12.3% of total industry revenue, according to IBISWorld.
Currently, sofa sales fall into two categories: small mom and pop dealers that provide better customer service but higher prices, and mass dealers that offer value products but impersonal service. "While our business continues to perform well at the upper end," says Hooker Furniture's Paul Toms during a call with financial analysts, "we are proactively adding to the good and better price niche as well."
Now, Hooker Furniture wants to marry the best of both worlds: reasonably priced furniture with excellent customer service. The furniture brand is introducing a special order program called So You! that allows customers to pick the sofa, sectional, or chair silhouette, select the type of leather, and customize the arm, leg, and tailoring details. The items are then shipped in four to five weeks. To date, the company has 80 placements of this program at U.S. dealers, believing that So You! will increase customer satisfaction and sales per square foot.
Although this program is intended to be affordable, company executives say the cost of leather has increased significantly in recent months and those added expenses will be passed along to consumers. So expect to pay more for that black leather couch with red trim.
Family photos join Park Place
Cafe Press, for its part, has always provided customized products. Some 30% of its total revenue in the third quarter came from personalized items. However, what consumers want customized has shifted from T-shirts and posters to entire living rooms, says CafePress' Bob Marino during a Nov. 6 call with analysts.
"Picture this: a living room with a graphic on the throw pillow on a couch. A stretched canvas with a gorgeous cityscape on the wall, a carpet with a modern art design on the floor. A colorful serving tray on the side table with custom coasters." Marino says consumers are increasingly personalizing everything, rather than one or two items.
Indeed, personalized home furnishings helped Cafe Press report third quarter revenue of $50.4 million, up 16% year-over-year. The reason is simple mathematics. Framed wall art and carpeting cost a lot more than T-shirts and posters.
For instance, orders from its subdivision EZ Prints are mostly priced under $10. Now, thanks to higher-priced home items, the average order size is $38, up $4 sequentially. "Home and art products helped us propel Q3 growth in the marketplace and we believe that we are just in the early stages of growth," says Marino.
And it seems nothing is sacred from customization for the masses. CafePress has introduced a new partnership with toy company Hasbro (HAS 4.01%) that allows users to upload family photos and images that are then inserted into Monopoly board games.
What remains unanswered is what happens to affluent industry in light of mainstream personalization. In the past, these types of custom services signified an elevated class status, but if everyone has access to these services, how will one tell the affluent from the mainstream? Stay tuned.