How Frank and Oak's Community Contributed to its Success
Frank & Oak’s business model is not revolutionary: the Montreal-based men’s fashion retailer sells smart-casual clothes to a youngish urban clientele. The majority of its sales are online, and its additional paid-membership program, Hunt Club, allows members to receive a crate of pre-selected items each month and only pay for those they decide to keep. It’s like Trunk Club-meets-Everlane for the hip, urban gent.
The company’s growth, however, has been revolutionary. The company, which started solely as an e-tailer, has racked up two million members in North America and has opened brick-and-mortar locations in eight cities since it was founded in 2012 by childhood friends Ethan Song and Hicham Ratnani. The Wall Street Journal also reported that the company raised $15 million in funding in September 2014, which will be used to open a New York office and increase the number of full-time employees to 100. This rapid growth has all come at a time when major retailers are shuttering spaces across the continent (Gap recently made announced plans to close 175 stores, for example).
So why the success? The secret may come down to a simple answer: community.
While its online business provides ease of shopping and its Hunt Club offers a more personalized level of service, Frank & Oak’s offline endeavours have focused on bringing its clientele together.
The first Frank & Oak store opened in Montreal in 2013 and was designed to be more men’s club than a space simply designed to move product. Walking through the doors of the St-Viateur Street shop – dubbed The Atelier – visitors are first greeted by a café; at the back, there’s a lounge area where two barbers have set up shop. The storefronts are also used for events such as speaker series featuring entrepreneurs, art showcases, and casual meet-and-greets.
Frank & Oak co-founder and CEO Ethan Song says this strategy was devised to appeal to the company’s creative-class cliente. “We found that stores tend to be very cold, transactional in nature. You’d go once every couple months. So what we decided to do is create a space that is more welcoming and where the staff feel more like your friends,” Song says. “It’s really about creating a space that you'd want to hang out in.”
Then there’s Oak Street, the company’s lifestyle magazine. The website features a blog showcasing “the art of living” which blurs the line between retailer and men’s magazine, with posts like “5 Tips For Grooming A Summer Beard,” and “How To Do Palm Springs In A Weekend.” Or the mixtapes made by up-and-coming DJs. And then there’s the pop-up shops that feature personal style consultants, trendy cafés and barbers where customers can get a fresh cut and shave after buying a sweater.
Song says the company’s goal is to craft different experiences through all of its channels. The online experience can be unique. The in-store experience can be unique. And the bridge between them is in the smartphone in your pocket.Customers can download the Frank & Oak app and be pinged when, say, chambray shirts go on sale – turning the act of clothes shopping into an impulse activity.
“Mobile is not a portal and mobile is not just a place that you can shop and market. Mobile is also your wallet. Mobile follows you wherever you go,” he says, pointing to potential services like tying smartphone shopping with same-hour delivery in cities. “People need to stop to thinking about the old ways of things,” Song says, noting that when you are an online business, you serve customers all across the continent. “And that’s the reason why our focus in not on expanding; our focus is on delivering a better experience [for] our customers.”
From an outside perspective Frank & Oak has hit some home runs, but also needs to be shrewd in its growth. Retail strategist David Ian Gray says that the company has excelled when it comes to defining their brand and knowing how they can be relevant to their target market. “If you’re trying to really go mass audience, it’s very hard to resonate deeply with any one particular group,” he explains. But as the company quickly expands, Gray says that maintaining this brand and connection with their customers can become a challenge.
The clothing industry can be fickle, he says. The price has to be right. The quality has to be high. And the brand has to be continuously spot on. This is why growth has to be carefully managed. “[As Frank & Oak] starts adding stores, they’re adding complexities and they’re adding people,” Gray says. “The key for them is to be very good at developing a culture – and that’s really the people side of the business – where all the people that are engaged day-to-day in making the experience happen either behind the scenes or in front are all on the same page.” If this is not properly done, the value that brand has built can be watered down, bit by bit.
From a customer point of view, Frank & Oak seems to be buttoned up. In addition to Montreal, Frank & Oak now has physical locations in Toronto, Vancouver, Halifax, Calgary, Edmonton, Ottawa and Boston, along with its New York plans. And with 70% of its business coming from the United States, it seems the online business continues to thrive.
“I think that the definition of what is a traditional experience and what is a true e-commerce experience is meaningless now,” Song says, in support of his company’s multi-faceted business model centred heavily on the customer. “People should stop thinking that way because that actually limits them in the types of experiences that they can have.”