When MeUndies thinks about their underwear subscription service they compare themselves to Netflix. What the streaming pioneer did for TV, the Los Angeles startup wants to do to your underwear drawer. The goal is to provide monthly subscribers with the staples they love while delivering elements of surprise - Think briefs with donuts and dinosaurs - right to your doorstep.
Kellie Swanton, Director of Product and Merchandising at MeUndies, is responsible for leading the charge. Prior to joining e-commerce startups One Kings Lane and Reformation, Swanton was a research associate at UCLA where she did mathematical modeling for HIV/AIDS and at Harvard where she studied how to improve medication adherence. Today, she relies on similar models and predictive analytics to create the product assortment plans fueling the company’s growth.
Since joining MeUndies in January 2016, Swanton’s made merchandising the startup’s backbone. From design to marketing, it informs everything they do. “The strength in a solid merchandising strategy is the ability to combine data and creativity,” she says. “Merchandising supercharges every team and allows your company to make smarter bets more often.” Today, Swanton explains why startups should establish a merchandising function in the early days and how to integrate the insights into your process. She provides actionable steps to create your first assortment and line plans, highlights the metrics you should be measuring, and how to harness your learnings as your competitive advantage.
How did you introduce and integrate your merchandising function at MeUndies?
One of my biggest priorities when I joined was creating a new assortment calendar. At the time, we were launching a new design every month but didn’t have a strategy around it. We started by diving into our past sales to find out what our customers love. We assigned various characteristics to our older prints and tracked how they performed over time. It allowed us to hone in on what people are looking for and build out a comprehensive line plan that includes, but is not limited to, those products. Once that was in place, we scheduled when we would introduce new products and the metrics we were going to use to measure their success. Updating our subscription model was really helpful. In the past, our entire subscriber base received the same print. It really decreased our ability to take risks. We don’t have to put all of our eggs in one basket anymore. Now, we launch multiple things at once, see what works, and adjust moving forward.
How do you assess your data before making your line plan? What factors are most important?
Our primary differentiator at MeUndies is our heavy emphasis on predictive analytics and how we use them to shape our future plans. We use past selling data to create models that capture the relationship among several product variables, spanning from descriptive attributes like level of contrast to demographics and customer purchase patterns. By assigning every new design the same characteristics and running it through the models, we quantify the predictive nature of each of the attributes and how they may influence a product’s success. It allows us to assess opportunities at a very granular level so we can minimize risk and make smart investments. Then, we measure specific goals for each product. We don’t solely start with an expectation of how a print is going to sell on day one but among women’s boy shorts overtime. When we model things correctly, each new print and style has an associated expectation so we can quickly determine whether it’s performing to plan and adjust.
Repetition is a big part of merchandising. We measure and review these factors daily. You might not recognize a winning design attribute if you don’t see it over and over again. We noticed that contrast level drives success so we started testing for it. It’s so important to look at things in aggregate because you would never think contrast is a top sales driver. Look at all of the products you’ve created, rank them, and see how they perform relative to each other. There are benefits of launching multiple versions at once. Observing and measuring what a customer clicks on and doesn’t click on teaches you about their preferences, what they want to see, and the things they actually buy. The more things you can test, the more things you can launch, the more data you have to glean these insights.
What is the biggest merchandising lesson you have learned during your time at MeUndies? How does it inform your work?
My biggest learning is the importance of building flexibility into your sales and inventory plan. Being a math person, I was trained to be exact in everything. Early on, I tried to achieve exactness at the specific unit level. The truth is you can’t predict precisely how a product or design will sell. It is unnecessary and unproductive to place that kind of pressure on your team and yourself. We focus on building plans that will collectively achieve our goals but aren’t reliant on a single design or product. We make sure that when things don’t go to plan, which they never fully do, we can quickly identify the learnings and move forward with minimal impact to the bottom line.
What role does serendipity play in your process? How do you leave room for it?
It all comes down to having the right skeleton in place. When we design our line plan (the order we release products and the quantity of each), we have several line items. Each one has different characteristics associated with it based on the amount of analysis we’ve done and what we want to offer our customer. We are never going to get the print exactly right in terms of buy rate but we can get really close by assigning it to the right place in the overall plan. That’s the magic of merchandising. Collectively, all line items roll up to our plan which protects us from any individual mistakes. The only way a model like this can succeed is to go big with how many things you’re launching. You can’t do it small because by definition you are putting pressure on a single item. Launch small batches of things, measure of them, and replace them at a faster cadence.
How do you communicate your merchandising goals to your team and ensure they are internalizing them?
My team decodes the complex analysis and presents only the essential takeaways. There is no point in building these models if you can’t explain what they mean and why merchandising matters. We create digestible reports and visuals that illustrate what we learned and more importantly how we need to design to respond to them. Especially at a cross-functional company, you have to make sure that everything you are doing has a clear and actionable insight associated with it.
We work very closely with our creative and design teams. We provide a high level blueprint with number of new designs, when we are offering them, and what they are replacing. The goal is to make it specific enough so they have direction, but not so specific that we strip away their ability to innovate. Your creative team needs the freedom to design the pieces that capture customer desire but also require enough guidance to ensure you hit your monthly sales quotas.
Compromise is really important too. Our design team came up with a great orange and red bright floral print. Based on our analysis, we thought it would sell better in a subdued tone. There are times when the creative team pushes back that the color scheme is critical to the season. That is completely okay. We find a way to minimize the risk and make up for the volume in other ways in case it doesn’t go as planned. That’s the merchandising team’s number one job: Helping the creative team protect the assortment while maintaining a viable business.
If you could give everyone working in merchandising a card with four things to remember, what would you write?
Leave room for creativity. Create assortments that are specific enough to exhibit intention and curation but not so specific that you omit your ability to delight customers.
Iteration is key. The more you iterate the more you can hone in on what is working and optimize your process. This empowers you to always put your best foot forward.
Never stop at the obvious conclusion. There is always another way to tweak your data. Make it a habit to ask and understand why.
Don’t over assort. It is easy and common to fall in the trap of adding more products to your line plan to fill a void. What you really need to do, is take a hard look at your existing products and tweak your strategy to hit your revenue goals. If you don’t keep this rule top of mind you can easily end up with an overwhelming set of products.
Most importantly, own your failures as much as your successes. Failing early, learning from it and moving on is so important. Internalizing this mentality enables your team to constantly take bigger risks.
All image credits to MeUndies.
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