Businessmodel of Bonobos

Customer Segments

Bonobos offers a range of clothing and accessories to the general consumer market. Its business model is built around providing a hassle-free, efficient and enjoyable process, through which men are able to purchase high-quality clothes for all occasions.

The Company has a specific target market, namely millennial males who do not enjoy traditional retail experiences. Bonobos typically serves male customers who prefer to shop for clothes no more than once or twice per year and appreciate a shopping experience during which they can receive fashion consultancy and fitting from a professional, and leave the store without having to carry it with them. Bonobos is also reported to operate a model with no-discounts, appealing to customers who do not enjoy the pricing complexity of traditional apparel retailers.

Bonobos serves customers primarily in its home market of the US, where it operates a network of guideshops across most major US cities, including Boston, Chicago, Atlanta, New York, Miami, Los Angeles, and Washington DC. The Company also ships orders to select group of international locations, namely Canada, Mexico, Australia, New Zealand, and Japan.

Value Propositions

Bonobos provides value to its customers in the following ways:

• Its innovative sales model, with the Company employing an innovative and unique sales model, providing personalised fitting and consulting services to customers through its guideshops, in conjunction with an online store and domestic and international delivery;
• Its high-quality products, with the Company providing a range of high-quality shirts, trousers, and other items, with its trousers utilising a signature curved waistband for a more comfortable and flattering fit;
• Its personalisation offerings service, with the Company offering various personal choices, allowing customers to select different cuts, fits, and styles of various items;
• Its affordable prices and shipping model, with the Company offering its customers quality items at affordable prices, with free shipping both ways, including for returns; and
• Its high-quality customer care, with the Company making tailored customer care and assistance available to all customers. ### Channels

Bonobos operates a website at www.bonobos.com, through which it provides information on its products, services, and locations. The Company’s website also serves as it online sales channel, where customers are able to browse products, place orders, manage account details, and arrange deliveries. The Company also offers a Bonobos iCatalogue app for iOS devices, through which customers can browse the Company’s catalogue of products on the go.

In addition to its more traditional online retail business, Bonobos also operates an innovative sales model that combines the convenience of online shopping with more personalised shopping experiences. The Company operates a network of more than 20 guideshops across the US – including in major cities such as New York, Los Angeles, Miami, Chicago, and Boston – where customers can try on clothes, receive personalised advice and fitting assistance from one of the Company’s specialist guides.

The guide will subsequently place an order for the customer which will be shipped to them directly. Hour-long appointments can be booked through the Company’s website.

Bonobos operates its own logistics infrastructure, including distribution centres and warehouses. It does not, however, operate its own fleet of delivery vehicles. The Company, instead, works with various distribution partners to complete its deliveries.

Customer Relationships

Bonobos operates an entirely self-service channel through its website and mobile app. These channels allow customers to browse the Bonobos catalogue of products, manage their account details, place orders, and arrange deliveries without interacting with members of the Company’s sales personnel. Customers can also make returns by post independently and free of charge.

Bonobos also provides a more personalised service through its guideshops, where specialists guides are available to provide tailored assistance to customers, offering advice on clothing ranges, fit, style and cut, as well as responding in person to any queries or questions about the Company or its service. The Company’s guides also place orders on behalf of customers. Under this model, Bonobos seeks to secure regular recurring business from customers.

The Bonobos website also includes a range of online support resources, including FAQs, shipping guides, and returns policy information. Alternatively, customers can contact the Company’s dedicated support staff, either its telephone support team – which operates seven days per week – or via an online contact form.

Customers are also able to interact directly with bonobos through its various social media accounts, including with Facebook, Instagram, Twitter, and YouTube.

Key Activities

Bonobos is a clothing and apparel retailer, engaged in the design, manufacture, and retail of clothing and accessories. The Company operates a hybrid online and offline retail service, providing a range of products for men, including trousers and shorts, shirts, suiting, sweaters and outwears, shoes, and accessories.

Bonobos operates a network of guideshops across the US, which operate effectively as fitting shops, where customers can book an hour-long appointment with a guide to discuss the Company’s catalogue of products, try on clothes, and receive advice on fitting and style.

The Company then ships the order directly to the customers, allowing them to leave the store without carrying any items. Alternatively, Bonobos operates an online retail store that ships domestically, as well as internationally to customers in Canada, Mexico, Australia, New Zealand, and Japan.

Key Partners

Bonobos has a number of partnerships in place that ensure that it is able to provide high-quality, efficient, and reliable services to its customers. These partners include:

• Supplier and Vendor Partners, comprising suppliers of resources, tools, services, and technologies that are utilised across the Company’s manufacturing, sale, and distribution operations;
• Manufacturing Partners, comprising a range of contract manufacturers and clothing producers that assist in realising Bonobos’s designs;
• Distribution and Delivery Partners, comprising a range of delivery and distribution service provider, both in the US and abroad, that assist in fulfilling the Company’s orders and shipping packages to customers; and
• Retail Partners, comprising various retail businesses with which the Company cooperates, or to which the Company supplies products for resale. In 2012 Bonobo agreed a partnership with Nordstrom, under which the Company provides clothes to Nordstrom for resale at Nordstrom outlets. The Company also collaborates with various non-profits and charitable organisations on social and community projects.

Key Resources

Bonobos’s key resources are its brand and intellectual properties, its products and supply chain, its manufacturing network, its sales and distribution infrastructure – including its guideshops and warehouses, its digital platforms, its IT and communications infrastructure, its partnerships, and its personnel.

Bonobos owns and or leases a range of properties across the US that are key to its operations. This includes its network of more than 20 guideshops – including in New York, Miami, Chicago, Boston, and Los Angeles – and its distribution centres, fulfilment centres, and warehouses.

Cost Structure

Bonobos incurs costs in relation to the design and manufacture of its clothing, the development and maintenance of its online channels, the maintenance of its IT and communications infrastructure, the operation of its physical sales and distribution infrastructure, the implementation of advertising and marketing campaigns, the management of its partnerships, and the retention of its personnel.

Revenue Streams

Bonobos operates primarily as an online retailer of men’s apparel and accessories. It derives its revenue from the manufacture and sale of unique products, including trousers, shorts, shirts, sweaters, and suits, with sales made either directly through its online sales portal or via one of its numerous guideshops.

Bonobos remains a privately-owned company, and as such is not obliged to publish its financial results on its website. Recent reports, however, suggest that the Company generated more than $100 million in revenue for 2015, with the Company expected record growth on this figure in the coming years.