The plus-size market could be e-tail’s new battleground.
This week alone has seen major pushes into the category from media property Styleite, which revealed plans to transition into RunwayRiot, a plus-size site with e-commerce capabilities, and Modcloth, which said it would remove the term “plus-size” from its site altogether and include those products in its normal offering.
Hana Ben-Shabat, a partner in the retail practice of A.T. Kearney, said, “Essentially we are talking about an approximately $19 billion market in the U.S. in 2014. Considering that the average size of women in the U.S. is 14, it means that there are more ‘plus-size’ people than there are sales to the segment. This is driven by the lack of offering of fashionable products in this segment — there’s a very limited number of dedicated brands and a limited assortment in department stores. No pun intended, but it’s a big opportunity in the fashion industry.”
Ben-Shabat said that beyond the few dedicated plus size brands (Lane Bryant among them), the small corners in the back of department stores relegated to the category often carry a selection that’s far from what’s considered “fashion forward” or even “fashion essential.”
But increased focus on e-commerce in plus size, as well as related digital marketing efforts, could open the door for both more accurate targeting and enhanced service.
Al Sambar, retail strategist at Kurt Salmon, had a similar take, saying: “I think plus size, big and tall, and petites are all ripe for e-commerce models. Consumers typically find a paucity of options in traditional physical retail, but leveraging e-commerce-only options allows retailers to build out their offerings to these market segments without having to carry substantial additional inventory in stores.”
That could be where Gwynnie Bee comes in, perhaps the largest fashion Web site most consumers have never heard of.
Call it the Rent the Runway or Netflix for the plus-size market, where members can choose to rent from thousands of apparel items with a monthly, subscription-based service. Sources in the venture capital space contend that the site’s founder and chief executive officer Christine Hunsicker has raised $100 million in funding, although Hunsicker declined to reveal who specific investors are or how much they’ve invested.
The stealth start-up, which is headquartered in Long Island City, has a staff of nearly 350 that spans 200,000 square feet and five spaces in Palo Alto, Calif.; Columbus, Ohio, and Dehli and Bangalore in India. Hunsicker projects staff to increase to 400 to 500 people by the end of next year. Gwynnie Bee started shipping in 2012, was kept in beta mode during 2013 and opened up to the public last year. Hunsicker is clear that she doesn’t “celebrate anything on the fund-raising side,” but she did say the company is likely to take on more capital early next year to increase warehouses, add more designers to the site and grow the user base quicker.
“Sixty percent of women in the U.S. are plus-size, and if you take size 10 and above, it’s 75 percent,” Hunsicker told WWD during an interview at the brand’s 12,000-square-foot office in Long Island City. “Seventy five percent of the population spends less than 25 percent of the entire market. That’s messed up. It’s all about options, [and] you have these untapped consumers who are ready for options.”
Gwynnie Bee carries more than 2,000 styles from 150 brands that are available to rent via a subscription service. Numerous membership options exist, from plans for one item a month for $35 dollars to 10 items for $159. The most popular option is the three items for $79 dollar plan, according to Hunsicker, who said members rent the equivalent of about $1,100 of apparel each month. About 700 styles will arrive on the site for the fall and winter seasons, with new arrivals going live every other day. A private-label collection commands between 15 and 20 percent of all product on site.
“The fact is that there is such a huge market there and designers have just not found the right way to enter. I don’t think it’s for lack of recognition. The distribution options are lacking,” Hunsicker added.
In addition to exclusive styles, Gwynnie Bee has worked with straight-size labels like Amanda Uprichard and Corey to design and manufacture exclusive capsule collections for the site and has expanded the size range for Karen Kane, Taylor Dresses and More. A series of collections designed in partnership with straight-size designers is in the works, but is set to be released closer to the end of the year.
“Sole ownership doesn’t make sense,” Hunsicker explained, as to why she opted for the rental model, as opposed to an e-commerce one (women do have the ability to buy something they’ve rented for a discounted rate). “Seventy percent of what women have in their closets has not been worn in the past year. It makes sense for things you wear repeatedly, [but] for everything else, you should rotate out.”
For her, not only can members take more risks with what they wear, but they can rent clothing from a range of price points.
Hunsicker declined to reveal the amount of members the site has thus far, but industry sources estimate that nearly two million users have signed up for an account and 150,000 are using the service.
The site is in rapid growth mode, though. Hunsicker said the past two months saw a slew of initiatives and updates to the site. For starters, a mobile app launched on Oct. 2, and Melissa McCarthy’s Seven7 line hit the site on Sept. 29. In August, an Inspired by You tour started, hitting cities including New York, Washington, Los Angeles and Chicago to engage members in local markets. A prioritization feature on gwynniebee.com also launched around the same time, giving users the ability to pick and choose clothing in their closets and have more control of what gets sent to them in each delivery. Increased and elevated content started to populate the site, including a monthly “We’re Inspired By” feature and “One Style, 3 Ways,” as well as user-generated photos. The latter was an effort to make reviews more robust and help users gets a sense of how clothing actually looks on different body types and sizes.
In September, a partnership with City Chic rolled out to provide members with well-priced basics including bras, panties, lingerie, shapewear, tights, leggings and belts. Hunsicker explained that this isn’t a move away from the rental model, but rather an extension of items that are complementary to what the site offers (as well as things one wouldn’t want to rent).