Last year, many of us found ourselves relaxing at home – in Lounge Underwear. The British direct-to-consumer giant ended an amazing year: they achieved $19 million in sales, which is three times more than the previous year, and their staff grew to 80 employees. In this episode of Shopify Masters, we talk to the life and business partners behind Lounge, Dan and Mil Marsden, to learn how to create a brand beloved by influencers, and how sustainability and inclusivity are woven into their daily operations.
Combining Business Savvy 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 Lounge was built was very different from the other companies that were being built around the same time with the rise of social media, because I think many other companies were built around finding a market gap where they couldn’t find a product that really fit them or they were really passionate about the product. Lounge was built in a different way because I had started many companies before Lounge. Lounge was built in an opposite 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 at the detailed level. It had to fit into what was called at the time mailer bag so we could ship globally at a reasonable cost. It had to be distinguishable so that when people posted it on social media, you knew who it was. It had to have large margins because we didn’t have any money at the time; we didn’t have any outside investment. It had to be cheap to store because we didn’t have any offices or warehouses at that time. Many criteria. And it so happened that the underwear and the first triangle design we drew fit perfectly with that marketing strategy.
It’s a story of two parts. So you have the business foundations and then Mil’s side, the brand and community and the women empowerment side. But in the early days, it was about building a strong business, allowing Mil to build that amazing community.
Mil: I think we essentially built the meaning and realized what we wanted our values to be over time. The name Lounge was thrown around and we laughed when we came up with the name because we were really sitting in the living room and it was clear that this was the right name. And I think that story about empowering women and inviting our community into this space where they feel safe and like they’re with their best friends even though it’s in a social space. That happened and evolved as the brand evolved and we’re growing at a very fast pace and how this evolution occurs and the values we can now share with huge social media and the broader community have really become strong.
Excelling in Products and Services
Shuang: Given that there are many well-known global brands, how did you plan to differentiate your products and services?
Dan: Many say it’s a very saturated market. I think when we started and even now, except for two or three brands, there doesn’t seem to be major competition. Five years ago, there were almost no companies. Of course, Victoria’s Secret is one of the big players, but they are on the decline. Other than that, all the other lingerie brands seem very outdated. They don’t seem to have a strong brand. Many of them look like they’re in chaos and therefore don’t know who they’re serving. There didn’t and still doesn’t seem to be significant competition and I think that’s what makes Lounge exciting for everyone working here because it seems we’re just scratching the surface; it doesn’t seem we’re in a place where we have to wonder how we’re going to compete with these people?
Mil:
But I believe that the fundamental beauty of Dan’s character is that he is not afraid of anything. So our approach at the beginning of our journey was this quiet confidence but the underlying 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 believe that having that intention since day one, which was truly humble, not arrogant, but we will make this work and we will have to figure out how we get there. I think that was really a true treasure at the start of our journey.
Brand Design Based on Fundamental Principles
Shuang: I understand you have a background in journalism and branding and Dan has a background in business operations, but neither of you has a background in design or fashion. So how did you start handling design and production?
Mel: I think we were very in sync as a couple. And even though we don’t have a design background, we have good taste, so we knew what we wanted our product to look like and we knew what women wanted and what our community liked. It really started with simple sketches and scattered pieces of paper, right Dan?
Dan: In the early days with the basic design, Mel and I had very similar tastes and that reflects in the brand. Even now with the design team, I tell them “I don’t know what we need, but I’ll know it when I see it.” Because we are not designers, but I think one of the aesthetics of not having experience and no prior knowledge is that you don’t follow trends. I think if you were working at another company, you’d be tied to their styles. Because we had no experience, everything we did was new and fresh. We didn’t release collections for spring, summer, fall, and winter; our collections last forever, and I think that may be a different strategy from what many do—they release collections, sell them, and then release another collection. We don’t do that. We don’t work that way because we hadn’t worked in fashion in general.
Mel: After five years, we are still very much tied to the design element of the brand to ensure that the vision we had from day one hasn’t faded when we look around and see what’s 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 your initial designs and when you were ready to start 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 key. But the influencer marketing landscape was completely different years ago compared to what it is now. We were very lucky to be living in a time of e-commerce explosion and social media. We did a lot of things right, and I think we are very good at many things, but timing plays a huge role in any company growing at our rate and we had a very good time concerning having an opportunity in the market. There was a market gap, and I feel there still is because I don’t feel there is a big competition. There was Victoria’s Secret and they are one of the big players, but they are in decline. Aside from that, most of the lingerie brands seem very outdated. They don’t seem to have a strong brand identity. It seems like many of them are in a mess, so they don’t know who they’re serving. There hasn’t been and still doesn’t seem to be significant competition, and I think that’s what makes Lounge exciting for everyone who works here because it seems like we are scratching the surface of things; it doesn’t seem like we are in a place where we have to wonder how we are going to compete with those people?
Mel:
But I believe the core beauty of Dan’s character is that he is not afraid of anything. So the way we started our journey was this calm yet fundamental confidence that we would make this work between you and me, you are the yin and I am the yang, we will build something strong here. And I believe that having that intention from day one, which was truly humble, not arrogant, but that we would make this work and we would have to figure out how to get there. I think that was truly a real treasure at the beginning of our journey.
Selling Through Influencer Marketing and Building an Inclusive Community
Shuang: After your initial designs and when you were ready to start the store, how did you convince people to buy their underwear online and on your site?
Dan: In the very early days, influencer marketing was fundamental. But the influencer marketing landscape was entirely different years ago than what it is now. We were very lucky to live in a time of e-commerce and social media proliferation. We did a lot of things right and I think we are very good at many things, but timing plays a major role in any company growing at our rate and we had a very good time regarding the market opportunity. There was a gap in the market and I feel it still exists because I don’t feel there is much competition. There was Victoria’s Secret, and they are one of the big players, but they are declining. Aside from that, it seems all the lingerie brands look very outdated. They don’t seem to have a strong brand identity. It seems many of them are in a mess so they don’t know who they are serving. There hasn’t, 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 we are scratching the surface of the matter; it doesn’t seem we are in a place where we need to wonder how we are going to compete with those people?
Mel: But I believe the core beauty of Dan’s character is that he is not afraid of anything. So the way we started our journey was this calm yet fundamental confidence that we would make this work between you and me, you are the yin and I am the yang, we will build something strong here. And I believe that having that intention from day one, which was truly humble, not arrogant, but that we would make this work and we would have to figure out how to get there. I think that was truly a real treasure at the beginning of our journey.
Building a Business with Sustainable Practices and Social Impact
Shuang: Regarding going beyond the product, there is a significant aspect of sustainability and charitable giving with Lounge. Tell us about the importance of being socially responsible within your business.
Dan: Regarding the sustainability side, we decided about 18 months ago that we had reached a size where we could start investing in that side. We decided to put continuous effort toward achieving goals regarding our products and packaging. So within six months, we transformed all our packaging from virgin materials to recycled or sustainable materials. So everything from the product and mailers to hangtags and return cards was changed to sustainable options, and then we started focusing on the products. We began transitioning all our products to recycled or sustainable options, and the best part is that many of them are made from recycled materials. In the past 12 months, about 60% of the products we launched were made from sustainable or recycled materials. We told ourselves, “Let’s draw a line in the sand. Everything we launch from now on must be sustainable or made from recycled materials.” As a brand, that’s how passionate we are about it. There are many companies that claim to have a negative carbon footprint but only purchase the associated credits, which is somewhat of a dodge, but we are trying to make continuous efforts to make a real difference as a brand. Personally, we feel passionate about it not only from a corporate responsibility standpoint.
Mel:
Certainly. We are talking about the care of the natural mother and the attention given to her, which calls the world to explore our female family because she is a woman and takes care of us. As Dan said, it is a personal passion to care for her and it is not only from a corporate responsibility perspective.
The Huge Growth with Establishing a Remote Culture
Shuang: I know that Lounge had tremendous success last year. How are you managing things in 2020?
Dan: We have seen unprecedented growth for a few companies
Source: https://shopify.com/blog/lounge-underwear-dtc
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