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Atlanta-based women’s underwear brand Spanx has decided not to dive into the Chinese market, but it’s dipping a toe into the world’s second largest economy using new digital platforms while overhauling its broader e-commerce outreach.
Spanx has spent the last year transforming the way it does business. For its first 17 years, the company sold 90 percent wholesale and worked with retailers to position its bras, leggings and shape wear on their racks or in Spanx-branded displays in their stores.
But with retailers reeling from the “Amazon effect” and online shopping on the rise, Spanx last year upped its Internet game, launching a new website to enhance relationships with customers. By year’s end, a large percentage of Spanx were sold online, even as wholesale volumes continued to grow.
The changes have created some back-end logistical headaches for the billion-dollar brand, Chief Operating Officer Mala Brindisi said March 28 during a keynote speech at Partnership Gwinnett’s Movers and Makers Supply Chain and Manufacturing Awards.
Chief among them? Hangers.
Spanx products had come in from factories around the world ready for a brick-and-mortar environment. Stores like Macy’s and Nordstrom stage products on racks before they hit the floor — even those that will not be displayed that way. With more Spanx being sold online and facing the prospect of handling returns, having everything on hangers made little sense.
“Now I’m spending money taking off these hangers every time I get a .com order,” Ms. Brindisi said. Hangers also made for larger cardboard boxes that the company eventually found it could phase out on direct-to-consumer sales.
Given all these challenges, plus plenty of “runway” for growth in the U.S. market, Spanx decided that it would hold off on an all-out blitz in China, despite the fact that its products are already sold in 65 countries worldwide.
But executives still had a hunch that the same factors that make the brand resonate with women in the U.S. would make it popular in China. Spanx had considered using popular shopping platforms like Tmall or JD.com to enter the country, but decided to take the brand straight to the buyers as a test.
Enter ShopShops, a Beijing-based app where hosts livestream shopping sessions inside retail stores, trying on clothes and answering questions from thousands of users watching online, mainly back in China. ShopShops gets a cut of the purchases made through the webcast and also ships the goods to the customers in China. Investors apparently see commercial value, as ShopShops recently raised $6.1 million in seed funding.
Spanx now streams once a month in its company-branded retail stores. Some are located in airports, others in places like the high-end New Jersey mall where ShopShops did its first Spanx webcast. The two-hour sessions give the company valuable consumer feedback in addition to revenue, Ms. Brindisi said.
“We found out we might have a consumer in China, and her habits aren’t really that different than that of the U.S. consumer,” she said.
So far, China sales are a drop in the bucket for the privately held company estimated to sell hundreds of millions worth of undergarments per year. Forbes puts founder and CEO Sara Blakely’s net worth at $1.1 billion, largely thanks to her 100 percent ownership in Spanx.
But the China experiment is part of the broader pivot to digital outreach for a company that has traditionally built its business in around word of mouth and has always espoused the ethos of empowering women by helping them feel good.
Ms. Blakely herself and her executive team sometimes answer live help chats through the website to get a feel for customer concerns. Spanx has also hired data scientists, adjusted website copy and weighed potentially disruptive technologies like virtual-reality shopping.
Ms. Brindisi said the company is still in the early stages of the shift and that it’s affecting the supply chain as well as the front end of the website. The company is eyeing software that can prototype new products digitally, avoiding the cost of sending samples back and forth, while improving communications with factories.
“When you get into sending designs to a factory in another country, it can no longer be manual email and patterns. It has to be that you’ve got some technology so that you can speak to each other faster.”
Ms. Brindisi’s speech set the tone for the broader Movers and Makers event, now in its eight year in Gwinnett.
On the manufacturing side, winners included:
- Small (1-99 employees): The Sherwin-Williams Company
- Medium (100-199 employees): TOMC02 Systems Company
- Large (200+ employees): Heatcraft Refrigeration Products
Supply chain Pioneer of the Year award winners were:
- Small (1-49 employees): Stradis Healthcare
- Large (50+ employees): Mitsubishi Electric Trane HVAC US
The 2019 Corporate Citizen Award went to Valentine Enterprises. The award recognizes companies who go above and beyond to make their company and their community a great place to be. Peachtree Packaging & Display took home the award for being the community’s MVP, Most Valuable Provider, to the manufacturing and supply chain industries.