The Secret to Everlane’s Success: Sustainability, Transparency, Inventory Management

MakersValley Blog: | The secret to Everlane’s success: sustainability, transparency, inventory management
Tashfia Parvez

Tashfia Parvez

Everlane launched in 2011 as a direct-to-consumer e-commerce company specializing in only men’s apparel. It began as just another retail startup with a referral invite list, but ended up acquiring 60,000 subscribers in five days despite only having 1,500 T-shirts in inventory. Soon after, it gained a more competitive advantage in the industry, hitting a total revenue of $50 million by 2015. That amount doubled annually for the next three years, leading to the opening and success of 6 brick-and-mortar stores, all located in California and New York.

Since its inception, Everlane has had a unique approach in mind: radical transparency. It uses this as a mission statement and brand strategy, which is one of the top reasons behind their growing popularity amongst consumers. Besides that, Everlane focuses heavily on sustainable practices through ethical sourcing and production, avoids overstock with smarter inventory management, and advertises mainly to their existing customer base via social media. Below is some detailed insight on each of these strategies.

MakersValley Blog | supply chain transparency

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First Came Supply Chain Transparency

Everlane tries to educate consumers on every aspect of its business, breaking down its transport, factories, mills, labor, and cost to produce each product. For example, its classic $15 black T-shirt is broken down to the last 11 cents spent on transportation. It also states that a traditional retailer would charge $45 which provides insight into the industry average and how Everlane uses a lower markup. This itemized cost breakdown strategy started with its T-shirts but spread to sweaters, shoes, bags and denim as the product mix grew.

To be transparent with consumers in terms of its supply chain, Everlane formed a strategy to nurture long-term, effective relationships with fabric mill and garment factory owners. The supply chain extends to farmers producing raw materials like cotton or leather, to mills turning that material into fabric or fiber, and to another factory turning that material into clothing.

Customers find Everlane reliable and trustworthy because it always puts its money where its mouth is: CEO Michael Preysman refused to release a denim line until it found a factory that met its sustainability standards and threshold. Now Everlane produces denim with a manufacturer where 98% of the water used is recycled, turning the leftover sludge, filtered of chemicals, into bricks used to construct affordable houses.

“We love the idea of each fabric coming with its own spec sheet of what it does for the environment and what it does for social implications from the farm through to leaving the mill,” said Nikki Player, Everlane’s sustainable materials R&D manager.

Player further said that it will require long-term partnerships between mills and companies to successfully understand and relay that information to customers. This is why Everlane seeks to first build a strong foundation with garment and fabric suppliers that share its values for transparency and high levels of social compliance. The mill provides all of the necessary information and certifications to verify environmental and sustainability claims so both parties are on the same page regarding innovation goals. Only then further growth plans can be set.

MakersValley Blog | Everlane's Sustainability

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Everlane’s Embrace of Sustainability

In 2018, the company pledged to stop using virgin plastic by 2021 and to complete all production using only organic cotton by 2023, including in packaging and in clothing made of synthetic fibers. Soon after, Everlane launched ReNew, a line of outerwear made from 3 million recycled plastic bottles.

Everlane carries two main sneaker styles, called the Trainer and the Court, made up of full-grain leather from a certified tannery. The soles of these shoes contain a mix of natural and recycled rubber that’s 94.2% free of virgin plastic, with a lining made from 100% recycled polyester. In May 2019, Everlane released the DayGlove ReKnit, a shoe made entirely of recycled plastic bottles. Everlane has also partnered with NativeEnergy which ensures that transporting these shoes leaves a net zero carbon footprint.

For all its leather or suede products, Everlane makes sure not to extract it from animals raised for their hides. Furthermore, their Tread sneakers use leather tanned at a facility that uses 47% less electricity and 62% less water and that emits 46% less CO₂ compared to other certified facilities. You can find more about their sustainable materials here.

Besides ethical sourcing and production, Everlane also provides insight about all the factories it works with, which claim to be maximizing labor conditions, fair wages, and water conservation while minimizing carbon footprint and energy usage.

MakersValley Blog | Smart Inventory Management

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Inventory Management, and the Marketing That Followed

When Everlane finally opened its first store, it had a line of 75 people waiting outside, and justifiably so. Customers had eagerly waited to get their hands on affordable, high-quality basics—$100 cashmere sweaters, $15 pima cotton T-shirts, $65 Japanese denim jeans.

Before releasing its denim line, Everlane created hype about it by sharing pictures and stories from its factories, which led to about 44,000 people joining its email waitlist. A year before that, Everlane let its customers know that its cashmere sweaters would be dropping in price since the cost of raw materials had gone down, which led to cashmere sales rise by 200%.

Everlane uses a combination of these waiting lists, real-time data, and customer feedback to increase inventory turnover and reduce overstocking. Usually most items on Everlane’s website sell out, but its close relationships with suppliers and tight inventory assortment make it easy to restock and notify customers who sign up for the waitlist.

According to Forbes, Everlane’s approach to creating lines that are item-based rather than collection-based. That means its merchandise is comparatively more durable. It drops an average of only six new items into its collection each month, and they are more or less classic pieces.

A plain black T-shirt is a timeless item, and if it’s made well and fits comfortably, its overall lifecycle will be greatly extended. Because Everlane cares less about the latest trends, it opts for more seasonless collections, and avoids significant end of season markdowns.

Everlane is great at leveraging its loyal customers for word-of-mouth marketing. Even in case of employee recruitment, Everlane first emails open position notifications to its customer list. This allows the brand to invest little to no ad dollars.

This brand also uses social media platforms to offer customers a virtual look inside its global network of factories and give a voice to the workers who create its merchandise. Every piece of content Everlane creates is a manifestation of their beliefs: a simple aesthetic, that highlights high quality and sustainable products, instead of participating in short-lived trends or challenges. This gives Everlane a bigger boost in reliability and a stronger consumer credibility score.

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