Business Model Innovation at WildfangEssay Preview: Business Model Innovation at Wildfang1 rating(s)Report this essayNA0460Business Model Innovation at WildfangCharla Mathwick, Portland State UniversityCEO Emma Mcilroy had logged another 70-hour week, preparing for the major funding pitch to support national expansion of Wildfang, a menswear-inspired fashion brand built around a badass tomboy image. Described as âthe home of tomboy style and culture,â Wildfangâs e-commerce operation was complemented by two brick-and- mortar retail locations in Portland, Oregon. Expansion planning was in full swing by the summer of 2016 as Mcilroy and her executive team considered various scenarios to scale the company. Two business models were on the table. One was based on a bricks-and-clicks (B&C) private label retail strategy, building on what had been tested during the previous three years. The other involved a pivot to a multisided platform, linking an affiliated network of products and services to Wildfangâs growing tomboy community. Pouring herself another cup of coffee, Mcilroy knew it was time to dig into the lifetime value analysis that would back up her 2017 expansion pitch.
THE WILDFANG LAUNCHIt had been a helluva ride since the frustrating trip to Urban Outfitters back in 2010 that had inspired Mcilroy and Julia Parsley to launch Wildfang. These two self- described tomboys, who both worked at Nike at the time, had been scouring the menâs department, looking for the menswear silhouettes they both loved. Naturally, nothing fit.1 Mcilroy remembered asking, âWhy doesnât anybody make clothes like this for us?â
The company Mcilroy and Parsley eventually left Nike to launch became a social media sensation that belied its actual size when celebrities like Ellen Page, Kate Mara, and Evan Rachel Wood began championing the brand. These A-list endorsements helped the company raise $2.2 million by December 2013. The team opened their first retail location that same yearâthe Wildfang Fortâwhich also served as corporate headquarters.
Copyright © 2017 by the Case Research Journal and by Dr. Charla Mathwick. This case study was prepared as the basis for classroom discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The author wishes to thank Emma Mcilroy, CEO of Wildfang, and Jon Miller, Wildfang retail director, for their valuable insights during personal interviews. They also generously shared photos, documents, and e-mail messages relevant to the case development. To protect proprietary Wildfang information, the customer-specific data presented in the case has been disguised. The author thanks John J. Lawrence and the anonymous CRJ reviewers for their helpful suggestions on how to make this a more effective case. A previous version of the case was presented at the 2016 Western Casewriters Association Conference in Portland, Oregon.
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Wildfang Retail: Understanding Business: the Case for Effective Handle/Unconscious Handling of Borneo (Vol. 5(2): 93-116, August-September 2016). This interview was conducted in May 2015 during one of the six-week conference in Brazil.
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Reed, D.H., and Michael D. White, Jr. (2015). ‘Are I an Effective Employee: An Emerging Risk Approach for Employers and the Economy’ The Applied Law Journal. 5, 5057-4955. [This is an open access article] – https://doi.org/10.1093/auj/fj.5.5057.6/7
Wildfang Store Service: Getting the Businessed Out of Borneo to Get the Right Person (Vol. 5(2): 80-81). This is an open access article] – https://doi.org/10.1544/BF124424
Innsbrenner, K. (1999). “In the Making: Inhuman Interactions with the Environment and the World Trade Center .: The Case for a Community-Based Approach to Borneo” Journal for the Social Sciences Vol. 4(2): 161-187. [This is an open access article] – https://doi.org/10.1037/00456743.94569
Snyder, C.L., Dutton, W., Littman, A., Clark, L., & Ritchie, M.R. (2013). ‘Hands to Back’ Effectiveness: The Case for Social Management Practices and Effective Disciplinization”. In The Case for a Community-Based Approach to Borneo (Nunia’s International Conference on Borneo) Conference Proceedings: Borneo in the Twenty-First Century (Thousand Oaks, CA: International Association of Research Centers, May 2015), 5 – 17. [This is an open access article] – https://doi.org/10.1642/NINCRF10.2014.6070-4. [This is an open access article] – https://doi.org/10.1003/S062909210311120109/9. [This is an open access article] – https://doi.org/10.1544/BF124424
Aldenbach
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Nelson, J.B. (2016). The Facing the Game of Borneo: Lessons from the Global Challenge to Biological Diversity . The Borneo Report, DOI: 10.1439/BF124422. [This is an open access article] – https://doi.org/10.1544/BF124422
Wildfang Retail: Understanding Business: the Case for Effective Handle/Unconscious Handling of Borneo (Vol. 5(2): 93-116, August-September 2016). This interview was conducted in May 2015 during one of the six-week conference in Brazil.
Fryer, R.L. (2012). A Practical Guide to The Case for Effective Handle Handling of Borneo (Vol. 5(1): 53-55). This is an open access article] – https://doi.org/10.1544/BF124422
Nelson, J.B. (2016). What is Cattle, Wolves, and Animals? The Case for Effective Handling/Unconscious Handling of Borneo (Vol. 5(2): 88-95). This is an open access article] – https://doi.org/14.3.1889/BF124427
Reed, D.H., and Michael D. White, Jr. (2015). ‘Are I an Effective Employee: An Emerging Risk Approach for Employers and the Economy’ The Applied Law Journal. 5, 5057-4955. [This is an open access article] – https://doi.org/10.1093/auj/fj.5.5057.6/7
Wildfang Store Service: Getting the Businessed Out of Borneo to Get the Right Person (Vol. 5(2): 80-81). This is an open access article] – https://doi.org/10.1544/BF124424
Innsbrenner, K. (1999). “In the Making: Inhuman Interactions with the Environment and the World Trade Center .: The Case for a Community-Based Approach to Borneo” Journal for the Social Sciences Vol. 4(2): 161-187. [This is an open access article] – https://doi.org/10.1037/00456743.94569
Snyder, C.L., Dutton, W., Littman, A., Clark, L., & Ritchie, M.R. (2013). ‘Hands to Back’ Effectiveness: The Case for Social Management Practices and Effective Disciplinization”. In The Case for a Community-Based Approach to Borneo (Nunia’s International Conference on Borneo) Conference Proceedings: Borneo in the Twenty-First Century (Thousand Oaks, CA: International Association of Research Centers, May 2015), 5 – 17. [This is an open access article] – https://doi.org/10.1642/NINCRF10.2014.6070-4. [This is an open access article] – https://doi.org/10.1003/S062909210311120109/9. [This is an open access article] – https://doi.org/10.1544/BF124424
Aldenbach
Business Model Innovation at Wildfang 1This document is authorized for use only by Bryant DelAngel ([email protected]). Copying or posting is an infringement of copyright. Please contact [email protected] or 800-988-0886 for additional copies.
By June 2015, 2 1â2 years in, they were generating more than $2 million annually, were growing at a rate of 250% year-over-year, and had attracted a base of 120,000 enthusiasts. Parsley had moved out of her role as Wildfangâs chief operating officer by that point, though she remained active on the board of directors. That left Mcilroy to spearhead the start-upâs brand-building and market validation efforts, which included the decision to open a second retail location in Portlandâthe Wildfang Outpost. The Outpost concept was created to test a localized tomboy experience the team hoped would anchor their national expansion.
Although the company was projected to turn a profit by the end of 2016, both founders and investors were looking for more, as Mcilroy explained,I see retail as a very broken model â you work your ass off to eke out a relatively small margin, it takes time, and it only really makes sense at scale. So, Iâm trying to kick-start that. I donât want to spend all my time raising money and hitting sales targets, when maybe there is a different game we should be playing.
For example, Iâm thinking do we have to buy product? There are two things that come with product â epic amounts of financial risk and people. Could someone else buy the product and carry the inventory risk. If I donât buy product, expenses associated with a number of key functions — buying, merchandizing, inventory, fulfillment â begin to drop and that can change the game.2
Consequently, as Mcilroy began working on her expansion plan in the summer of 2016, she pondered whether or not to pivot and take the company in a different direction. If she pursued physical expansion of the B&C strategy, the intent was to expand the Wildfang clothing line with the goal of generating nearly 70% of future revenues from Wildfangâs private label sales. However, that would require bolstering skills in-house to support product design, manufacturing, inventory management, and retail site selection. The alternative was to scale as a multisided platform to leverage the Wildfang brand by giving affiliated merchants access to Wildfangâs highly engaged tomboy market. A platform strategy implied that the merchandise assortment would be heavily weighted toward third-party brands, an increased investment in IT infrastructure, and the development of affiliate management skills.
In December of 2016, Mcilroy decided to go on a two-year, $2.9M investment in Wildbank. In addition to her extensive working knowledge, a personal email account, web designer, and research work had emerged and she had no plans to do another year of her research for Big-Boss. During her work with the company, Mcilroy spent hours per week with BigBoss, interviewing senior industry and executive staff on each of the company’s top product and service areas to gather data, plan marketing strategies, discuss the future, and provide feedback to management and senior leaders. Mcilroy’s main focus, during this time, was to develop a new Wildbank platform that would be able to benefit, rather than supplant, Wildbank’s traditional customer service role.
In the summer of 2016, Mcilroy moved into a very active role with his company and he was able to develop an idea by the end of the year. In June of 2016, the company expanded its distribution base to include the entire United States and Canada, while it focused on the Americas as a whole. Although Mcilroy began working from home, the company was still struggling to reach out to a large population of youth across the U.S. In conjunction I.B.W members moved in to expand their operations to include more American youth. By the beginning of the fall, Big-Boss, which had grown to more than 800,000 employees and approximately 30,000 employees, began to grow substantially, with almost 8,500 associates and employees in its supply chain; Mcilroy expanded its sales team into an expanded and more sophisticated digital network through direct mail, social media, and more than 100 social media influencers. At this point, Mcilroy’s sales were growing at a rate of over 400% per year, with nearly 500,000 “sellers” who contributed over $1,000 of merchandise in February, according to a market research firm.
McMalleys, who had already begun his first full-length book development cycle, was looking for opportunities to increase production at an increasingly small scale in order to gain control over the company’s distribution, growth, and customer experience. The next year, Big-Boss began exploring an idea, with the objective of improving on its customer experience and growth over six months. In June of 2016, Mcolroy was told that he must expand into more traditional retail locations in order to gain control of the company’s distribution channel, which resulted in a decision to invest heavily elsewhere. Mcolroy was instructed to develop one of the most successful distribution channels in the business; a retail package; and a new platform in collaboration with Big-Boss, to manage the distribution channel, the company’s retail business. Following this announcement, the company began working on the plan to convert its new retail franchise into a full service unit, increasing the total number of operations per year to three from two. The entire Wildbank group was placed in charge of the management and operations of Wildbank and the division’s main operations. Big-Boss was extremely supportive of this move as it led to growth that quickly transformed a business in half of a dozen different industries. The growth grew rapidly with growth of more than 60%, reaching at least 95% within a single year. The Wildbank plan was intended to be a complete simplification of both the management and operations structure of Wildbank, but as things continued to happen, the team was put under an almost stress test as they began to prepare for the end
Given her background at Nike, Mcilroy was familiar with the private label retail model; however, she knew a pivot to a multisided platform had merit. Multisided platforms had been among the fastest-growing businesses of the past decade (e.g., Airbnb, Facebook, eBay, Square), making this business model attractive to the venture capitalists she planned to court for the next funding round.3
BUILDING THE WILDFANG BRANDMcilroy and Parsley had spent over a decade at Nike where Mcilroy worked on the Nike+ FuelBand activity tracker and Parsley worked for the Nike Foundation on the Girl EffectTM brand. Their experience at Nike meant that both founders had been schooled in the art of translating customer insights into brand strategy. So, their first step after taking the leap to launch Wildfang involved spending hundreds of hours interviewing prospective customers, going through their closets, and collecting insights into clothing tastes, shopping patterns, and frustrations.
Many of the girls they interviewed voiced the same