Shopping for underwear at a department store is so old-school. Plus, it’s inconvenient and uncomfortable. And for entrepreneur Jonathan Shokrian, it was an eye-opening moment that spurred him to launch MeUndies in 2011. With sub-par product in hand, for which he felt like he’d overpaid, Shokrian had the same epiphany that many disruptor brand creators do, saying to himself: There has to be a better way.
Eight years and 9 million pairs of MeUndies later, Shokrian is morphing the original business model from subscriptions to memberships, with à la carte purchases still making up nearly half his sales. The founder and CEO is doubling down on online community building and connecting in real life with a retail location at the tony Westfield Century City mall in Los Angeles and pop-ups at Legacy West in Plano, Texas, and the Mall of America.
Underwear may be a necessity, but Shokrian doesn’t see his product as “basic,” especially when it’s decked out in unicorn patterns and Keith Haring designs. Shokrian will take the stage as a speaker at Challenger Brands: A Brandweek Event, Feb. 6-7, in New York.
Ahead of that gathering, which will feature C-suite executives from Levi’s, M. Gemi, Pandora, Peloton, Papa & Barkley and other companies, Shokrian spoke with Adweek about the rising cost of customer acquisition, passing up venture capital and battling in the jam-packed direct-to-consumer space.
Adweek: What is the strategy behind your move to a membership model, and how consumers are reacting to it so far?
Jonathan Shokrian: The main goal of The Membership is to cultivate a deeper relationship with our community. With access to exclusive prints and a lower price point on all products, we have set out to create something that allows our community to really feel like they are part of something special. We have an incredible tribe of advocates, and they’re engaging with the brand in ways that transcend the physical product. They’re posting photos in their MeUndies all across social, they’re voicing what they love about the brand and they even advocate for prints they want to see next. As one of the first direct-to-consumer companies, we’ve built a huge portion of our brand online. With Membership, we want to translate the brand into the real world and connect with our community in their everyday lives.
What do you see as your most significant marketing challenge of 2019?
MeUndies was built on innovation, and that approach is mirrored in our advertising strategy. We were one of the first brands to leverage podcast advertising, and we are always searching for the next big channel. One challenge to overcome will be trying to solve for the ever-increasing cost of acquisition, particularly as we work to grow and scale a company of this size.
What did you glean about your consumer, and some of your quirky past moves like advertising on porn sites, recreating a Beyonce video, selling via vending machines and partnering with Saucy grow the business?
Our community embraces our bold and, at times, irreverent approach to a product that is categorized as “basic.” The thing is, MeUndies is anything but basic. We inject life into a wardrobe staple that is considered an afterthought. One of the core values that guides our team is to not take ourselves too seriously. This business was built outside the confines of tried-and-true rules, and we pride ourselves in taking a bolder approach. We believe in self-expression, we celebrate individuality, and we’ve found that our customers share these same values. We often see our customers proudly posting pictures in their undies, which empowers us to keep doing what we’re doing. Embracing this content on our own channel and featuring members of the community in campaigns is nothing new to MeUndies. In some ways, our bold advertising has resulted in even bolder campaigns, featuring the very same customers that were most attracted to them in the first place.
What kind of growing pains have you experienced at the brand, and how did you course correct?
When MeUndies launched in 2011, we only offered a monthly subscription. We’ve since introduced single purchases and packs into our model after recognizing a customer need for those who don’t want to commit to a monthly plan. Scaling to offer both membership and individual sales definitely came with logistical and cost challenges, but it’s important to us to make sure we are serving our customer and meeting their needs first and foremost. We’ve also decided to forgo massive rounds of VC funding in lieu of slow, sustained growth. This has allowed us to stay laser focused on our customer, in addition to building a strong business and brand identity.
How do you see the DTC space evolving, particularly the trend of e-commerce brands moving to physical retail?
As one of the first digitally native subscription businesses, we have witnessed a nascent category through massive growth. We’re noticing greater investment opportunity by translating online brands to offline. That doesn’t necessarily mean opening your own storefronts, but it does mean finding new ways to connect with consumers in the real world. How can you, in an authentic way, have a presence where they shop, where they eat and where they play? DTC companies need to continue evolving to appeal to their customer base, and that often means blending omnichannel strategies. For MeUndies, we’re always looking for ways for the consumer to experience how soft our product is in person.
What’s the toughest aspect of being a legacy (as opposed to a startup) challenger brand?
DTC companies are no longer a new thing. It’s a crowded, ever-growing space, and brands need to find continuous ways to innovate. Convenience and quality are expected; a brand can hardly survive without both. The space has become more focused on creating an exceptional customer experience, from owning your values to figuring out how to cultivate a community around those values.