ASSIGNMENT 1: MARKETING ENVIRONMENT LIM CHIEW CHIN, BRENDA / 1306771E TD03 / VISUAL COMMUNICATION
contents 01 Company Profile 02 Marketing Mix (7Ps) 03 Unique Selling Proposition 04 SWOT Analysis 05 Main Competitor 06 Conclusion
“You are Threadless. You make the ideas, you pick what we sell, you’re why we exist.” – Threadless
company profile
Jake Nickell (left) and Jacob DeHart (right)
HISTORY Founded in 2000 by Jake Nickell and Jacob DeHart, Threadless is an online apparel and product business formed by a community of consumers and designers from all over the world. It allows consumers as well as designers to design and buy products ranging from t-shirts to home accessories. Threadless was an idea that Nickell had executed on an art and technology forum, Dreamless, where he encouraged fellow designers to submit designs in the form of competition and the best ones would be printed on t-shirts for the group. The initial goal was to create opportunities for them to showcase and sell their works online, with no business plan or marketing strategies put in place.
GROWTH As more and more people became intrigued by such an idea, a website was built and the printed t-shirts were sold for under $20. In 2000,Threadless printed new shirts every few months and by 2004, they printed new shirts every week.Their estimated revenue in the same year was around $1.5 million and it leaped to $6.5 million in 2006. With its rising popularity, Nickell and DeHart had to hire their first employee to help out in the business and keep up with the demand that was increasing exponentially. Threadless has eventually expanded their business by selling other printed products to cater to a wider group of people. Today, they have about 80 employees and about 2.4 million members from all around the world who are contributing to the company and its success. Millions of t-shirts are sold per year, with more than 1,000 designs submitted and put to vote online each week. 1
marketing mix The 7Ps of Marketing PRODUCT
MORE THAN JUST T-SHIRTS
The main products sold in Threadless are printed apparels ranging from unisex t-shirts, tank tops, to hoodies, in which 10 new designs would be released on every Monday of the week. Other products available from the online store include art prints, mobile phone cases and accessories such as tote bags and pillows.
Instead of just printing t-shirts, Threadless has chosen to expand their business and reach out to a wider group of target audience by adding new range of products to suit the needs of different people. For instance, people who are tech-savvy would be more inclined to buy mobile phone cases than t-shirts.
CHROMAESTHESIA by Budi Satria Kwan
Printed Products of CHROMAESTHESIA
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PRICE Generally speaking, Threadless products are affordable and considered cheap for a company that does not engage in mass printing production.Their regular t-shirts range from USD$10 to USD$20, while other products such as hoodies, bags or accessories, range from USD$5 to USD$50. ‘LIMITED EDITION’ PRODUCTS However, despite the affordability of the products, Threadless limits the production of each design. This means that once a design for a product has been sold out, consumers have to request for reprints, indirectly indicating that the products sold are limited editions. The company is therefore able to create an air of authenticity and originality through this tactic and retain its consumers in terms of positioning. PROMOTION As an online business, Threadless effectively makes use of social networking platforms such as Twitter and Facebook to connect with people from all over the world. This improves the company’s public relations as feedbacks can be communicated in real time and the needs of the community can also be address efficiently with the help of technology. STRONG COMPETITOR WITH A HUGE ARMY With over 800,000 fans on Facebook and 2.1 million followers on Twitter, it is without a doubt that Threadless’ company image and its presence in the business industry would never go unnoticed by its consumers as well as competitors. Threadless also actively forms partnerships with renowned companies and organisation such as Apple, Dell and UNICEF, bringing a wider pool of opportunities and benefits for its community to get recognised by the general public through such collaborations.
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PLACE As of 2014, Threadless is only makes use of their online distribution channel to reach out to its consumers from all over the world. The online platform is one of the most important aspects of their business and the efforts put into making sure that the website runs smoothly can be seen from how they neatly categorised their products according to gender, style, price, size as well as the different colours available for selection. Photographs of models in the t-shirts are of high quality and this gives the consumer a good idea of how the shirt looks like in actual life. At the same time, due to the colours and typefaces chosen for the website, Threadless is being portrayed as a company that is fun and quirky, hence being able to attract younger consumers who like to keep up with the trends.
PHYSICAL ENVIRONMENT In 2007, Threadless opened a retail store Lakeview and it was profitable. However, as consumers felt that the retail store stripped away the image of Threadless being unique and accessible to everyone around the world, plans for retail expansion were stalled and the only physical store was being closed down in January 2014. Currently, Threadless does not have any physical retail store besides their Headquarters in Chicago, Illinois, United States. Headquarters in Chicago
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Employees of Threadless
PROCESS SHOPPING & PAYMENT • Typical shopping cart method • Purchases can be made without account • Cart summary > Shipping info > Shipping method & gift options > Payment info > Order Status VOTING FOR / SUBMITTING A DESIGN • Consumers/Designers are only allowed to vote for or submit a design if they are a member • Membership is free and the sign up process only takes a few minutes • Once logged in, members have the option to vote for designs or to submit their own designs MOBILE APPLICATION • Users can browse an extensive roster of designs • Rate and share their favorite creation • Designs sorted by their popularity or date created • Products can be filtered by their category, such as t-shirts, sweatshirts, prints and bags. • (Payment) One-click checkout process
Workspace of Threadless
PEOPLE FOUNDERS Jake Nickell and Jacob Dehart are the cofounders. However Jacob DeHart are now no longer part of the company thus the current CEO is only Jake Nickell. CULTURE Threadless’ company culture is that everyone does things together, in which everyone shares their joy, and have fun together while working to serve the community together. CONSUMERS Unlike most retail stores, consumers at Threadless are of importance to the company because they cast their vote and ultimately decide what to print and sell, and that is the reason why Threadless exists.
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unique selling proposition With other companies entering the industry such as DesignByHumans that function similarly to Threadless, it is hard to say that their unique selling point is that they allow consumers to design their own t-shirts. COMMUNITY BEFORE BUSINESS Instead, Threadless stands out amongst the many online retail stores because their aim is to cater to the community before business. This is the most prominent when we look at how Threadless encourages its consumers to submit their own designs and engages them through the scoring of designs by others. By allowing their consumers to participate in such activities, they get to be a part of the creative community and this allows them to express and shares their opinions with others who are like-minded. DesignByHumans does the same by creating a community of artists, but their main focus is more targeted towards sales and business, in which is evident when we look at how they highlight and mention that they have some of the “best royalty rates available�, easily implying that they are more profit-driven when compared to Threadless.
Becoming a contributing artist on DesignByHumans
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swot analysis: strengths FREE-OF-CHARGE PLATFORM Threadless’ website is a platform for aspiring designers to showcase and publish their works at literally $0. They can improve on their skills as their works will be critiqued by members of the community. Moreover, the forum on the website also allows designers to interact with one another, hence enhancing their creativity skills and social life. NO GEOGRAPHICAL BARRIERS
USER-FRIENDLY WEBSITE
Threadless makes good use of technology to market themselves, catering to worldwide consumers as well as designers who can participate in their activities at any given time as long as they have access to the Internet.
Threadless’ website is well-organised, and this makes the process of browsing and making purchases a breeze for its consumers. TRANSPARENCY Threadless provides explanations and reasons on why some of the designs were rejected and this allows users to understand the decisions that the company makes.
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swot analysis: weaknesses
UNFAIRNESS IN VOTING SYSTEM As Threadless produces their goods based on the online voting system, some designers might get friends to support their designs so as to win the competition. POOR QUALITY OF PRODUCTS Some reviews highlighted that quality issues of products such as inconsistency in printing, pixelated design, and the thinning of material, causing it to be out of shape. SLOW CUSTOMER SERVICE The staff took days/weeks to get back to customer enquires, and the shipping time is not accurate and slow. This may cause customers to lose faith in the company.
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swot analysis: opportunities MOTIVATION FOR DESIGNERS Nowadays people are very driven by getting ‘likes’ and feedbacks. The biggest motivation for designers is to have their works seen by the crowd and to get feedback from people to learn and enhance their skills. Strong identity, constant intellectual challenge and the sense of belongingness to the community that shares the same values are priceless.
SOCIAL CAUSES Some of Threadless’ partnerships bring attention to important causes, such as the Whole Foods - Whole Planet Foundation t-shirt competition. The competition aims to highlight the issue of global poverty, and celebrate those entrepreneurs who are lifting themselves out of poverty through their own energy, work and creativity. Other causes they had been involved in include the Architecture for Humanity T-Shirt Challenge to raise money for earthquake victims in New Zealand, the Japan and Pacific Relief T-Shirt Challenge to raise money for those affected by the Japanese Tsunami and Earthquake, and the World Alzheimer’s Month Association T-Shirt Design Challenge to raise money for the Alzheimer’s Association This shows that there are opportunities that would allow Threadless to be a part of social causes. Architecture for Humanity T-Shirt Challenge
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swot analysis: threats LOW BARRIERS TO ENTRY Since web-based online platform has a low startup cost, anyone can join the market at any time as long as the have the necessary knowledge and support. COPYRIGHT ISSUES Designers might have to deal with legal issues if their designs violate the copyright issues imposed by some companies.
SATURATION IN SUBMISSIONS With the increasing popularity and awareness of Threadless, the community would eventually be bombarded with different designs, whether good or bad because of profit-driven consumers out there. At the same time, there might be a lack of uniqueness when designs are actually reprinted due to popular demand.
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main competitor
DesignByHumans is no doubt the main competitor of Threadless due to its almost identical business model. INTRODUCTION DesignByHumans functions very similarly to Threadless as it allows consumers/designers to submit their own designs to be printed on a variety of products ranging from t-shirts to mobile phone cases. DesignByHumans also uses a voting system to determine what designs should be sold. In addition, both companies do not give the user community a specific theme to work on but rather the users are free to design anything they want. Moreover, designers who win are offered a sum of money in both companies. REWARDS Threadless’ awards winners with $2,000 and $500 worth of vouchers. An additional $500 is given for reprinted designs and $10,000 is given to winners of the “Bestee” Annual Threadless award. In contrast, DBH offers $750 to winners of “Shirt of the Day”, $1,000 for “Shirt of the Week” and $1,750 for “Shirt of the Month”. DIFFERENTIATION POINT The main thing that differentiates DesignByHumans from Threadless is that, in this case, for t-shirt designs, are allowed up to 14 colors, as well as gradients and half-tones, and the designers can make use of 8 different printing technologies, ranging from fuzzy text to embroidered. On the other hand,Threadless only offers up to 8 solid colours printing.This allows designers a greater area for their imagination field, giving them the opportunity to express their talent on their maximum amount.
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conclusion
With Threadless’ rising popularity and thriving community, it is inevitable that more companies similar to them would join the industry in search for profits. Such online companies have a lot of potential to appeal to a wider base of audience as they are able to reach out to consumers from all around the world. However, Threadless is a company that will stand out from the rest due to its USP as mentioned earlier – their mindset of catering to the community before business. This is selling point connects with the consumers on an emotional level as they would feel a sense of belonging when they are included in the community.
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bibliography • D’Onfro, J. (2013). Meet The Coder Who Dropped Out Of Art School To Sell These Clever Techie T-Shirts. Business Insider. Retrieved July 8, 2014, from http://www.businessinsider.com/jake-nickell-founder-threadless-201311?IR=T&op=1 • Lorimer, A. (2014). Case Study: Threadless. Design Intelligence. Retrieved July 8, 2014, from http://www.di.net/articles/ case-study-threadless/ • Threadless. (2014) Threadless. Retrieved July 8, 2014, from http://threadless.com • Wikipedia. (u.d.) Threadless. Retrieved July 8, 2014, from http://en.wikipedia.org/wiki/Threadless
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