By Shuang Esther Shan
Introduction
Last year, many of us found ourselves lounging at home – in Lounge Underwear. The British direct-to-consumer giant closed out a fantastic year: they achieved $19 million in sales, tripling from the previous year, and doubled their staff to 80 employees. In this episode of Shopify Masters, we speak with the life and business partners behind Lounge, Dan and Mil Marsden, to learn how they built a brand beloved by influencers and how sustainability and inclusivity are woven into their day-to-day operations.
Combining Business Acumen and Empowering Women
Shuang: Let’s go back to 2015 when you both had a dream of starting this business. What inspired you to start Lounge?
Dan: I think the way we built Lounge was very different from other businesses that were being built at the same time around the rise of social media because I believe many other companies were built around finding a gap in the market where they couldn’t find a product that fit them perfectly or that they were really passionate about. Lounge was built differently because I had started multiple businesses before Lounge. Lounge was built in a reverse way because we knew the perfect way to market a product but didn’t have the perfect product. So there were many criteria that went into that. It had to be small enough to ship even in smaller quantities. It had to fit into what was then called a large letter so we could go global at a reasonable cost. It had to be distinguishable so that when people posted it on social media, you would know who it was. It needed to have large margins because we had no money at that time, we had no external investment. It needed to be cheap to store because we had no office or warehouse at that time. Many criteria. And it just so happened that the underwear and the first triangle design we drew fit perfectly with that marketing strategy.
This is a two-part story. You have the business foundations and then you have Mil’s aspect, the brand and community and the empowering women side. But in the early days, it was about building a strong business, allowing Mil to build that amazing community.
Mil: I believe we built the meaning and realized what we wanted our values to be over time. The name Lounge was tossed around, and we laughed when we came up with it because we were actually sitting in the living room, and it was like we said, “Oh, Lounge. Yes, that’s the name. That’s the right name.” And I think that story about empowering women and inviting our community into this space where they feel safe and feel like they’re with their best friends even though it’s in a social space. That happened and evolved as the brand grew rapidly and how we could share values that we can share now with massive social media and the wider community.
Empowerment through Influencer Marketing and Creating an Inclusive Community
Shuang: After your initial designs and when you were ready to launch the store, how did you convince people to buy their underwear online and through your site?
Dan: In the very early days, influencer marketing was foundational. But the landscape of influencer marketing was completely different years ago than it is now. We were very fortunate to be living in a time when e-commerce and social media were on the rise. We did many things right, and I believe we are very good at many things, but timing plays a huge role in any business growing as quickly as we are, and we had very good timing regarding having an opportunity in the market and I feel there was not much competition. Victoria’s Secret was one of the big players, but they were on the decline. Other than that, it seemed that every underwear brand looked very dated. They didn’t seem to have a strong brand. Many looked like they were in disarray so they didn’t know who their target audience was. There hasn’t been, and still doesn’t seem to be, much competition, and I think that’s what makes Lounge exciting for everyone who works here because it seems like we are scratching the surface; it doesn’t feel like we are in a position where we have to ask ourselves how we will compete with those people?
Mil:
But I think this is the beauty of Dan’s core personality. It seems a bit cliché since we’re a couple, but he is not afraid of anything. So our approach at the beginning of our journey was a calm confidence but a fundamental trust that we would make this work between you and me, you are Yin and I am Yang, we will build something strong here. And I think that having that mindset from day one, which was very humble, not arrogant, but we would do it and we had to figure out how we would get there. I believe this was a true essence at the start of our journey.
Brand Design Based on Core Principles
Shuang: I understand that you have a background in journalism and branding and that Dan has a background in business operations, but neither of you has a background in design or fashion. So how did you start to deal with design and production?
Mel: I think we were really in sync as a couple. And although we don’t have a design background, we have good taste, so it meant we know how we want our product to look and we know what women want and what I love and what our community loves. It really started with simple sketches and scattered pieces of paper, right Dan?
Dan: In the early days with the basic design, I think Mel and I have very similar tastes and that reflects in the brand. Even now with the design team, I’ll tell them: “I don’t know what we need but I’ll know when I see it.” Because we’re not designers but I think one of the beauties of not having experience and not knowing the trends is that you don’t follow trends. I think if you were working at another company, you’d stick to their styles. Because we didn’t have any experience, everything we did was new and fresh. We didn’t design spring and summer and fall and winter collections; our collections last forever and I think that might be perhaps a different strategy than what many do as they launch collections every season, sell them, then launch another collection. We don’t do that. We don’t work that way because we weren’t working in fashion in general, I think.
Mel: Five years later, we are still very much tied to the design element in the brand to ensure that the vision we had from day one has not been lost as we look around and see what is happening in the market. We remain very focused on what we want Lounge to be and what we want Lounge to offer.
Selling Through Influencer Marketing and Creating an Inclusive Community
Shuang: After those initial designs and when you were ready to launch the store, how did you convince people to buy their lingerie online and on your site?
Dan: In the very early days, influencer marketing was key. But the landscape of influencer marketing was very different years ago than it is now. We were very lucky to be living in a time when e-commerce and social media were on the rise. We did a lot of things right and I think we are very good at many things, but timing plays a massive role in any company that grows as quickly as we are and we have very good timing in terms of having an opportunity in the market and I feel there is not much competition. Victoria’s Secret was one of the big players, but they are in decline. Aside from that, it seems every lingerie brand looks quite outdated. They don’t seem to have a strong brand. A lot of them seem to be in chaos so they don’t know who their target audience is. There wasn’t, and still doesn’t seem to be, much intense competition, and I think that’s what makes Lounge exciting for everyone who works here because it seems we are digging at the surface, it doesn’t seem like we are in a place where we have to question how we are going to compete with those people?
Mel:
But I think that is the beauty of Dan’s core personality. It sounds very cliché because we are a couple, but he is not afraid of anything. So our approach at the beginning of our journey was a quiet confidence but a fundamental belief that we would make this work between you and me, you are the yin, and I am the yang; we are going to build something strong here. And I think that having that mindset from day one, which was very humble, not arrogant, but we would do it, and we had to figure out how to get there. I think that was a true essence at the beginning of our journey.
Strategically Pricing to Indicate Value
Shuang: Did you encounter challenges regarding pricing during Black Friday?
Dan: I don’t think it’s Black Friday that causes that. I think many brands get this wrong and find themselves in a tough situation where they shift from discount to discount. We primarily do that; we do two big discounts a year, and that’s it. We do discounts on Black Friday and discounts on our birthday. Other than that, we don’t do frequent discounts, which I believe builds the brand reputation and the true value of our products. It’s a quality product. I think this is where many companies struggle, as they see a quick win when they are small and enter discounts, make a lot of money and start doing it repeatedly and completely lose your credibility as a brand. The problem is that the consumer realizes that and will only buy if you are on discount because you do it repeatedly, so they wait for the discount. So you’ll find that when you are not on discounts, you have no business. We are very strict on this side; we are not a fast-fashion brand; we are not a discount brand. We do two big discounts a year, and that’s it.
Expanding with Agents in America and Germany
Shuang: You are also planning to expand with offices in America and Germany. What are some things you are preparing for as you expand globally with the offices?
Dan: I think places in Europe like Germany, France, and the United States can be targeted from the UK and do well regarding local empowerment, but you can’t really understand the culture unless you are German and live in Germany. You cannot replicate that. It’s very hard for us to understand the German way of doing things and who the famous people are or what’s trending there unless you are actually in Germany. It becomes the case that when you really want to break into that market and achieve great success there, you have to be immersed in that market; you have to understand how things work, and simply you cannot do that from the UK. And since we are…
Source: https://www.shopify.com/blog/lounge-underwear-dtc
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