BUSINESS MODEL INNOVATION AT WILDFANG

CASE SUMMARY:

Wildfang? Yes, it’s a brand which defies all gender roles that are holding women back. Started in
2013 by CEO Emma Mcilroy (CEO) (not required) and Julia Parsley as an e-commerce brand
with two additional brick and mortar retails, Wildfang is a fashion brand inspired by menswear.
The two self described tomboy founders of the brand started with their first retail (The Wildfang
Fort) in 2013 in Oregon, which served as the headquarters as well. Eventually, with an enormous
growth rate of 250%, their second retail (The Wildfang Outpost) was opened in Portland.
Consequently, with the growing base of enthusiasts of the brand and the need to make the brand
grow arises. This is when Mcilroy starts analyzing the various variables to steer her business
expansion in the right direction-to go either with B&C (Bricks and Clicks) or a Multisided
Platform.

MAIN ISSUES:

In the infancy stage of any business, challenges are prevalent. Moreover, as the brand continues
to grow, the founder Mcilroy is torn between two business models to adopt for strategic
expansion/leverage.

Some of the challenges are highlighted below:

1. Branding Challenge: In the beginning of their journey, the CEO was faced with a
challenge on how to best emanate their core qualities and what merchandising strategy
best embodies the fashion aesthetic.
2. Product-Market Fit: It is concerned with who and how to leverage their success at
creating compelling, “in-the-moment” social media content.
3. Customer Segment: The various segments vary in retention rate, churn rate, purchase
frequency and return rate.
4. B&C Model (Bricks and Clicks model): A further expansion of the already existing
business model of Wildfang.
5. Multi-sided Platform: This will be a system of linking affiliated network of products
and services to the highly assorted Tomboy market of Wildfang.
ANALYSIS OF THE ISSUES:

1. Branding challenge:
 The brand wanted to position themselves as the ultimate choice of the tomboy
space.
 It was challenging to develop a position themed: aspiration, empowerment,
embolden, etc because of the pre-existing niche markets aimed at sexuality alone.
 Finding the right audience and the right content for keyword strategy was also a
challenge to channel awareness.
2. Product-Market Fit:
 Prior to coming out as a brand( introduction as a brand) that inspired to
penetrate the tomboy culture, there was a lot of validation that needed to be made.
 It posed the biggest question in their mind: Would a women’s brand be defined by
an empowered, rebel identity and would a menswear inspired look have a broad
appeal?
 Another concern was which decision would result in the best in market share
growth.
3. Customer Segment:
 The walk in shoppers in comparison to the Wildfang Core Loyalists recorded
higher AOV of $96 compared to $68.
 Although the walk-in-shoppers generate higher AOV (Average Order Value), the
churn rate is the highest with this segment. It is a very volatile segment of
customer with little or no brand loyalty.
 The CAC (Customer Acquisition Cost) is the highest in Online Shoppers segment
despite their high churn rate which stands at 70%.
4. B&C Model:
  Having been a former employee of Nike, Mcilroy was very well versed with
private label retail model. Wildfang had already two retail stores operating at the
time.
 If B&C strategy would be pursued, then the projected revenue from private label
sales must be 70%.
 However, this requires additional costs for grooming skills in-house to support
product design, manufacturing, inventory management and retail site selection.
 Neither the owner nor the investors (use word stakeholder) want to pursue a
pure e-commerce business.
 Launching private label brands means entering a very competitive segment.
5. Multi-Sided Platform:
 If Multi-sided platform business were to be implemented, then merchandise
assortment would be heavily weighted towards third party brands.
 This would mean increased investment in IT infrastructure, and the development
of affiliate management skills.
 This model will result in limited number of Wildfang Outposts.
 This strategy will result in change in composition of customer portfolio.

SOLUTIONS TO THE ISSUES:

1. Branding:
 Having known who their target customers are and what are their
need/gaps/frustrations are in the current market, Wildfang works to create a
lasting impact on its community. The brand aims to be the “North Star” that
guides its community. It is a feminist channel working to make those who feel out
of place feel like they belong and are accepted.
 This was achieved through the many inspirational brand stories, video and social
media and its corporate blog. Influencers embracing the brand for its core value
such as actress Kate Moennig, soccer gold medalist Megan Rapinoe, fashion
blogger Frou Frouu also brought about brand awareness.
  The merchandising strategy included its tactical decision of operating their
Headquarters from Portland, where the undercurrent of tomboy inspiration
permeated the culture for the “Inclusive” feels.
 Personalization experience can be created in its stores to embrace tomboys into
adulthood by continuing its section of corner bar, swings and carving wall to all
prospects and buyers even if no purchase is made.
2. Product-Market Fit:
 This is achieved by really understanding the person the brand truly wants to help-
in short, it is called having a defined Ideal Customer Persona.
 Wildfang appeals those who want to bust fashion stereotyping- A person who is
fed up of mainstream fashion and wants a fresh outlook on old-school fashion.
3. Customer Segment:
 The walk in shoppers and online shoppers account for 45% of their total customer
portfolio.
 Walk-in-shoppers and online shoppers churn rate (70-75%) can be decreased by
creating loyalty programs directed at them. Sending a welcome-mail, scheduling
follow up routines on customers, newsletter updates about seasonal sales, offers
and other campaigns, upgrade offer, bundle offers, tailored offers are some
techniques that can be used to convert them to loyal customers.
 It is so because retaining a customer is cheaper than acquiring new ones. This can
help generate revenues and save cost for the brand.
 Since the Core Loyalists and Exclusives of Wildfang are highly engaged and loyal
to the brand, following up on them for a more personalized customer service and
engaging them in upgrade offer will help in increase their average spend in their
shopping bhwvior.
4. B&C Model vs Multi-sided Platform:

B&C Model Label Multi-sided Platform

Label
Introduction  B&C is a combination of physical  Multi-sided
stores and online platforms. platforms bring
together distinct but
 interdependent
participants such as
users vs. buying
customer (Google),
sellers vs. buyers
(Amazon), etc. This
platform acts as a
value creator by
actively increasing
participation on all
sides of the
platform.
Tactics  Largely requires
The
The maintenance of third
party’s assortment
company will mix of affiliated
products or services
expand the coming with the
private label.
private  Requirement of

label either
system to actively
respond to user

with in-
feedback or product
reviews.

house
 Affiliated merchants
would manage

designers or
inventory and
fulfillment

collaborations
processing, thereby
cutting inventory
costs for Wildfang.
  Limited number of
with Wildfang Outposts
(high profile) in key
existing markets only.

clothing
labels
Competitors
The company
will
expand the
private
label either
with in-
house
designers or
collaborations
with
existing
clothing
labels
Competitors
The company
will
expand the
private
label either
with in-
house
designers or
collaborations
with
existing
 clothing
labels
Competitors
 The company will expand as a
private label either with in-house
designers or by collaborating with
existing label competitors.
 Wildfang’s target customer is very
specific and does not have many
competitors in this area.
 Wildfang will focus on promoting
in-house brands in this model.
 After which web based goals will
be focused on to make the B&C
model work.

Q. Which business model should be proposed for the Wildfang expansion and where were
the risks in that plan?

Ans: Multi-sided platform is strongly recommended for Wildfang because the increased network
and participating with the help of other affiliates will drive awareness, sales and hence, more
revenue. And, the upgrade in IT system is definitely the way to go about in this era because
customers are more engaged in devices rather than taking the time out to visit a physical store.

 Pros:
i. Increased and active participation from all sides of the platform owing to the
expanded network effects.
ii. This model leverages Wildfang’s core competencies in brand building,
content creation and community development.
 iii. Inventory costs will be reduced as inventory will be largely managed by
third party affiliates.
iv. Increase in online customers’ portfolio from 15% to 55%. This is a very
clever move because their AOV is $200 compared to just $60 for CAV.
v. This model serves as the fastest growing business of the past decade
(Facebook, Airbnb).
 Some risks in the plan are:
i. Less personalization experience with regards to the satisfaction of visiting a
store and trying out clothes, or the satisfaction of immediate purchase in
hand.
ii. Decrease in core loyalists portfolio to 25% from 40% meaning revenue
would fall.
iii. Huge investment in IT Infrastructure, expertise and affiliate management
systems.
iv. Investment in paid advertisement to increase traffic in their website.
v. Walk-in customer’s portfolio also decreases to 5% from 30%.

REFERENCES AND BIBLIOGRAPHIES:

 Taylor K. (2016), WomenInRetail, Wildfang Knows What Its “Tomboy” Customers

Want, Available at: https://www.womeninretail.com/wildfang-knows-what-its-tomboy-
customers-want/, Viewed on: 4th Sep, 2020
 Macaela M. (2018), Forbes, How To Build A Feminist Empire, According To The
Founder Of Wildfang, Available at:
https://www.forbes.com/sites/macaelamackenzie/2018/03/29/how-to-build-a-feminist-
empire-according-to-the-founder-of-wildfang/#6430d88556ec, Viewed on 4th Sep, 2020
 Wildfang Case Study, SearchSpring, Available at: https://searchspring.com/wildfang/,
Viewed on: 4th Sep, 2020
 AlexaBlog, An Inside Look At Wildfangs Rise in Women’s Fashion Using Alexa
Insights, Available at: https://blog.alexa.com/customer-spotlight-inside-look-wildfang/,
Viewed on: 5th Sep, 2020
 Vanessa V.E., Science of People, Wildfang Master of In-Store Brand Signals, Available
at: https://www.scienceofpeople.com/wildfang/#:~:text=Wildfang%20likes%20to
%20think%20of,they%20think%20of%20that%20product., Viewed on 5th sep, 2020
 Erik R. (2020), Super Office, 5 Customer Retention Programs To Implement in 2020,
Available at: https://www.superoffice.com/blog/customer-retention-programs/, Viewed
on: 5th Sep, 2020