“Love Wins” DTC 브랜딩 전략
Inspection on Ganni and DTC brands
Community and love is at core for the Dennish womenswear brand Ganni. Having one million followers on Instagram and 86K organic posts on #GanniGirls, the cult brand is built on loyal fans. Since 2009, the brand is operated by Creative Director Ditte Reffstrup and CEO Nicolaj Reffstrup as a husband-and-wife team. Ganni redefined the Scandinavian fashion with designs that are effortless yet full of personality - where two streotypes on Scandinavian fashion was minimal-androgynous or bohemian. Not only for its creativity, sustainability also lies in its DNA with a careful approach in promoting consciousness.
Once little known, the brand became a cult in the fashion circle including press and buyers. Spreading through word-of-mouth with social media presence rising, it was also worn by influencers such as Rihanna, Kendall Jenner, and Gigi Hadid. Growing exponentially in the recent years, between 2017 and 2019, the brand has seen 50% growth in revenue year over year. In 2021 its revenue reached $21 million. Going through the pandemic its growth slowed down, but was relatively resilient compared to the contracted growth of the apparel and footwear market. Proven its vision for the future of the industry, L. Catterton, a private equity firm funded by LVMH, acquired 51% share of Ganni in 2017 - as LVMH and other incumbents are betting on new ventures rather than competing directly or acquiring the rising DTC brands.
Despite its success, there remains concerns whether the brand is future-proof. During the last decade the industry witnessed proliferation of DTC brands. Many emerged but survivors were only a fraction. With the rise of e-commerce that further expanded into social commerce, DTC brands accumulated consumer loyalty especially in the consumer goods sector. Mainly building and distributing physical products, these brands were hard to scale. However, Ganni is evolving to prove its competence by rebuilding its strategy, diversifying business, and expanding its market, yet anchored on DTC channels. On top of these business tactics, keeping integrity of its core values remains the most important, which are uniqueness, community, and sustainability.
Looking into Ganni’s strategy, first comes the product. The brand keeps minimal assortments, with drops or capsule collections in small volumes but frequently launching new lines. This adds value to its products with scarcity as well as delivering diversified range at a lower cost on inventory. Collaboration is also their key strategy in their branding and marketing, where they can expand their boundaries by experimenting with different charateristics of products as test orders without harming their core image. It also has a "Sweet Spot" Pricing Strategy, being affordable yet exclusive.
For place, although starting as a DTC brand, it is currently sold at selected retail stores worldwide. When expanding its business overseas for DTC brands, retailing with wholesale partners becomes a strategic choice. Since it is expanding its global presence via social media, US and Asia became Ganni’s key emerging markets. Therefore utilising retailers of international network such as Net-a-Porter and Farfetch, as well as local select shops such as Beaker in Korea could save additional costs on international delivery and opening of local stores. At the same time, its DTC sales are growing as well, accounting for 40% of revenue in 2020 which grew from 24% in 2019.
The company also diversifies its business by launching a rental service named “WEAR, SHARE, REPEAT”. As For promotion, Instagram remains to be the key player for delivering its images and messages to foster its community. They also have a podcast titled “Ganni Talks CULTURE CLUB”, in line with their way of engaging with their community, which many DTC brands in US and Euope are using to promote their philosophy on brand, as well as to link with their audience directly and create stronger bonds. In promoting their ideas, the brand delivers its ethos on sustainabilty very carefully - unlike many other brands that are currently using keywords on ESG as a tool for promotion, which broughtabout bans on greenwashing of companies in the Europe. Since community plays a large part of their promotion, brand equity and its fans becomes an asset in itself, which is in a way similar to the case of entertainment business where sales comes from merchandising, anchored from experiential events such as concerts and showcases.
In summary, DTC brands reinvent the value chain in two ways. First, with simplicity at core, these brands eliminate unnecessary practices and create value by providing convenience to customers. They simplify design, function, and range of the products, cut off excessive cost to lower the price, and finally provide ease in the purchase experience. In addition, as scarcity becomes the new value that consumers desire, DTC brands are positioned at niche, adding value to customers as well as satisfying the heterogeneous needs of diversified consumer profiles - which are often latent prior to their advent.
Innovations become meaningful when it meets the unspoken and undiscovered needs of consumers. Narrowing focus helps targeting the right fit for DTC. Ganni’s disruptive positioning started with Ditte herself, the creative director’s own desires which were unmet from the existing market. The brand’s ethos on love, community, sustainability, as well as the creative styling were part of Ditte and her friends’ DNA. In an interview with Fortune, Ditte states that when starting the business, she wanted to develop a style she needed that did not exist at the time, building Ganni as the “Scandi 2.0”. With a keen focus on its target customers, the brand created a differential advantage with consistency and stayed relevant.
Although comfortably positioned niche and expanding its market, the brand is competing with legacy players entering the mid-market. For example, H&M expand their portfolio by launching niche designs under sub-brands such as COS, & Other Stories, Monki, whereas Zara has a wide range of product within itself. Despite the threat, the legacy players’ risk lies in that consumer needs and government regulations are demanding brands to be more consciousness and transparent, with consumer movements avoiding mass production. WIth the fundamental shift in consumer mindset, although DTC brands are hard to scale, we see the dawn of the new era of DTC market.
