Anomalie offers brides a new way to buy a wedding dress—custom designed, online, and at a reasonable price. That makes the company, well, an anomaly in the $55 billion United States wedding industry, which is well known for its opaque labeling and pricing. “When you make the same product white and attach the word ‘bridal,’ it makes it cost 5 to 10 times more,” says Leslie Voorhees (MBA 2015), who founded Anomalie with her now husband, Calley Means (MBA 2015). “It’s offensive to a woman who understands how things are manufactured.”
And Voorhees understands how things are manufactured. Before launching Anomalie in 2016, she was a supply-chain manager for Apple Watch—and a bride-to-be in search of a wedding gown. In the process, the self-described TOM nerd discovered that one city in China produces 75 percent of the world’s wedding dresses. On a visit there, she realized that a dress that sold for $5,000 in a boutique might cost as little as $200 in labor and supplies. By working directly with the factories, Anomalie can produce a custom gown for about $1,200.
In the first two months that it was open for business, Anomalie fielded about 1,500 customer inquiries and saw a high conversion rate, Means says. The company also raised $1.5 million in seed funding—all without spending a single dollar on marketing.
Calley Means and Leslie Voorhees (both MBA 2015).
(photos courtesy of Anomalie)
Anomalie attracted its first customers by offering custom wedding dresses at affordable prices, a unique offering in the otherwise crowded wedding industry. But custom design creates ongoing operational challenges. As it grows, should Anomalie leverage its supply-chain advantages to create a line of off-the-rack styles, with the potential for higher profit margins, or is custom design the company’s real value proposition?
Why not have a set of silhouettes with customizable features at a range of price points? With X bod- ices and Y skirts and Z trims, the bride now has a large number of permutations, but the factory ben- efits from making the same “parts” over and over. Additionally, because most women aren’t fashion design- ers, it reduces the overwhelming responsibility of designing some- thing from scratch.
—Erica Keany Blob (MBA 2006)
Change the business model, and morph into a platform that allows designers to connect with new customers. Collect revenue share on transactions and provide curated fulfillment/logistics.
—Tony Chao (MBA 2007)
Stay the course and focus only on made-to -order, which is the best way to build a sustainable competitive advantage. The made-to-order model is inherently very challenging to execute, because it requires expertise in various parts of a complex supply chain and high efficiency (to keep lead times down and costs manageable). But that is valuable precisely because it is difficult and thus very hard to replicate.
—Ankur Daga (MBA 2005)
What makes this online retailer unique is that it has brought transparency to the pricing and cut out the middleman. So I say yes absolutely you can and should have some off-the-rack options (still tailored to fit). This may even be preferred for the woman who is time-strapped or low on creativity and just wants to choose between some well-curated options.
—Sara Cherlin Diniz (MBA 2005)
Today’s consumers expect more customized and personalized products, services, and experiences. Anomalie’s value proposition to provide a custom product at the off-the-rack price is spot-on with this consumer trend and a formula for success. I recommend Anomalie stay the course and build the capacity to create a second brand that focuses on off-the-rack dress. Many examples are available in fashion and the hospitality industry, such as Banana Republic and Old Navy or Andaz and Hyatt Place hotels.
—Cindy Park (PLDA 12, 2013)
Case Study Update
In September 2014, readers weighed in on a question posed by KitNipBox cofounder and CEO Deena Malkina (MBA 2008): How could the monthly subscription service for cat owners erect sustainable barriers to entry to the market and secure a market leadership position?
How they answered the question:
KitNipBox focused on creating the best cost structure in the market. But the company wanted to compete primarily on quality not price. To that end, it struck exclusive deals with suppliers and marketing partners.
Where they are today:
The company continues to see high double-digit growth year-over-year both in subscribers and in revenue. In mid-2015, KitNipBox—which now has eight employees—became profitable. They have a small number of competitors but are the largest player in the market—another barrier to entry for others.
Launched in early 2014, KitNipBox is now gearing up for profitable growth. “Being the largest player in this industry is still pretty small,” says Malkina. “The biggest thing to figure out is how we can grow at or below our optimal customer acquisition cost at a much greater scale. We have the cash to invest in marketing, but we want to make sure we are investing it productively.”
From Baker Library:
Anomalie is one of a growing number of retailers adopting transparent pricing in an attempt to build trust with consumers, many of whom have become disillusioned by variable pricing and other tactics they see as deceptive. HBS faculty research supports this strategy, suggesting voluntarily sharing cost information improves retailers’ sales. For more information about pricing strategy or retail supply chains, check out ABI and other resources on eBaker.
Class of MBA 2015, Section A
Class of MBA 2015, Section D