Menswear brand DTC Goodlife takes inspiration from the CPG playbook
In times of economic boom, it’s easy for apparel brands to chase seasonal trends, collaborations, and new product categories to attract more customers. But that’s not the time we live in, and the opposite approach of limiting product assortment is a safer bet. In the wake of inflation, supply chain issues and reduced consumer spending, some fashion brands are betting on reliably salable staples and styles.
Goodlife, a men’s fashion brand launched in 2012, is a case study in which a limited range of products works to the brand’s advantage. The bread and butter of Goodlife’s assortment are its T-shirts, of which just three styles account for more than 70% of its inventory and sales.
Co-founder and co-CEO Andrew Codispoti said he adheres to a strict 70-20-10 rule. Seventy percent of the brand’s inventory is made up of t-shirts and the few other products, including sweatpants, which together drive the majority of sales. But Goodlife reserves 10% of its inventory for new seasonal experimental items, like swimwear. If something in the 10% is selling well and demand seems high, it is moved to the 20% section, which Codispoti classifies as popular products but not yet considered essential or persistent. Only once a product has stayed in the 20% for at least a year and is selling steadily during that time, such as Goodlife’s velor hoodie introduced in 2020, is it added to hero inventory at 70%.
The 10% novelty can take the form of a new product category, such as swimwear; a new material, as for the velvet hoodie; or a new fit, like the scalloped tee launched this month. This strategy was not always part of the Goodlife model, but it was adopted before the pandemic.
“Years ago, we were more tempted to give in to newness and try new products all the time,” Codispoti says. “But if you only acquire customers with something new that you’ve just introduced and won’t resell, is that really a customer for life? We have found that the people who love us for the flagship product – our T-shirts – come back again and again.
Codispoti said the brand’s repeat purchase rate was nearly 60%. And it owed its low 8% return rate to both having customers who are familiar with the Goodlife product and offering an online try-before-you-buy feature – the feature allows customers to make themselves deliver shirts and only be charged if they don’t return them. The industry average return rate for apparel is more than 16%
Codispoti specifically compared Goodlife’s business model to a consumer packaged goods brand, like toothbrush startup Quip. Quip focuses on a few SKUs and builds a loyal following for those products.
But Codispoti also distances Goodlife from the wave of DTC brands that emerged before the pandemic and achieved immense valuation quickly but without a sustainable model. He said Goodlife, unlike many DTC brands, does not shy away from wholesale and has been selling its t-shirts to Nordstrom since the brand launched. According to the brand, Goodlife is the origin of the best-selling luxury t-shirt at Nordstrom. Its overall revenue is growing by a high double-digit percentage each quarter, Codispoti said.
“A lot of these DTC companies were overfunded,” Codispoti said. “A lot of tech investors have given a lot of money to these brands to just buy growth. They’re not apparel investors and don’t understand equity or brand retention. Growth can be very You can grow a lot and then hit a wall because you haven’t created loyal customers.”
In another initiative taken by the CPG industry, Goodlife last year launched a subscription model called T-shirt Club. It sends members a new shirt every one, two, three or six months, charging 20% less than the shirt’s retail price in exchange for recurring orders. Goodlife t-shirts are $70, but are only $54 for club members. As Goodlife is still learning from the program, it has not marketed it aggressively yet. Goodlife did not share membership figures.
With forecasts for the rest of the year signaling the possibility of reduced sales across all sectors, extracting more value from fewer products is increasingly an attractive move for fashion brands.
“During a booming economy, you always wonder how and where you can grow,” said Matt Field, founder of MakerSights, a company that works with brands like Madewell to plan their inventory and avoid overproduction. “But recently there has been a leak to SKU productivity.”