Within its first three years of existence, the Spanish digital-native fashion brand laagam has managed to reach €1M revenues in sales. But that’s not all: the company started by the 24-year-old Business graduate and influencer, Inés Arroyo, is inspiring thousands of women and is changing the way fashion is made and sold.
The values behind laagam are visible in their products: versatility and quality, guided by their slogan “Buy better, wear more”, they create affordable luxury pieces for millennial women to wear at all times. What isn’t that obvious in their products is the business model behind laagam, which is the driver of the brand’s triumph and is proving that innovation is not a nice-to-have anymore, but a must. So, what are laagam’s keys to success?
1. Zero-stock shops
Laagam’s “guide shops” are not like the kind of shops we are used to. Situated in Barcelona and Madrid, they are only open four times a week and they do not have any stock. How does this work? They act as showrooms, in which customers can see the different pieces, try them on and be advised by the stylist in store. Once they’ve decided what pieces they want (if any), an order is placed and sent to their address within 48h. This fused online and offline shopping experience enables direct contact with customers, improving their shopping experience and allowing for feedback gathering, as well as nulling the costs of stock characteristic of offline stores.
2. Knowing their customers and what they want
One thing it’s clear, and becoming more apparent as time goes by: know your customers or you are dead. In the social-media driven world that the fashion industry is turning into, laagam is leveraging its 74k followers on Instagram to not only know who their customers are, but what it is exactly that they want. It is common to see polls on the brand’s social media accounts asking for their followers’ opinion on the new designs, while their being created. Colours, pockets, patterns, length and other product features: laagam gathers this information and creates their products ensuring that they match their customers’ preferences and taste.
3. Pricing options
To reach all their different customer laagam offers different pricing options and products. From the laagam box, a subscription-based programme in which customers receive some of the latest products monthly for €45; to the sisterhood card, a loyalty card giving holders a balance to spend on their products up to €500 higher than what they initially paid. The digital-native company offers different options suited for different options, and ensures a healthy cash-flow to produce their newest products.
4. Crowdfunding
Kickstarter was laagam’s choice to fund the 4-in-1 fashion bag, and it was a great success.
“We thought of raising €5,000 to kick-off, we already have €21,000 and we still have two weeks of campaign left”, said creative director Inés Arroyo in an interview for La Vanguardia. By selling the bags before they were actually produced, the firm could pay for the whole production without any external funds while only making the amount of pieces that were wanted, avoiding expensive surplus.
5. The sisterhood
Laagam is more than just a brand, it has become a community. “Inspiring girls to take the world by storm” is their motto, and one can breathe that scent in each one of their actions. Instagram posts with inspiring messages, their podcast series Ruido dazz interviewing inspirational and independent women from different backgrounds; events such as Yoga lessons and brunches at the terrace of their guide shop and their latest Valentine’s day campaign “Send love”. Last February, the brand invited all its followers to write sorority messages that were then turned into a book. The idea behind such book? To promote a positive view of female online platforms, against the increased insecurities developed from Instagram’s boom.
The fashion industry is imminently changing, only those that innovate and adapt will remain, and Laagam seems to be having a successful approach to fight the storm. What can we learn from the young Spanish company? Find new ways of reducing costs, like stock costs; increase cash flows through different pricing options and crowdfunding strategies; listen to your customers and treat them as more than just that.
References:
Blog Empresas. (2018). Laagam, el negocio de la influencer Inés Arroyo | MÁSMÓVIL Empresas. [online] Available at: https://blogempresas.masmovil.es/laagam/ [Accessed 29 Sep. 2019].
Jover, A. (2019). De influencer a emprendedora: Así es Laagam, el negocio de Inés Arroyo. [online] La Vanguardia. Available at: https://www.lavanguardia.com/de-moda/moda/20181018/452404630223/ines-arroyo-firma-laagam.html [Accessed 29 Sep. 2019].
Kickstarter. (2019). laagam – The fashion bag for any occasion. [online] Available at: https://www.kickstarter.com/projects/laagam/laagam-the-only-fashion-bag-you-need [Accessed 29 Sep. 2019].
laagam. (2019). Buy better, wear more | laagam. [online] Available at: https://laagam.com [Accessed 29 Sep. 2019].
Pinuaga, P. (2018). Laagam, la start up fashion que supera los 600.000 euros de facturación. [online] Fashionunited.es. Available at: https://fashionunited.es/noticias/retail/laagam-la-start-up-fashion-que-supera-los-600-000-euros-de-facturacion/2018110728767 [Accessed 29 Sep. 2019].
Ponce, J. (2018). Laagam, una startup con stock cero – Marketing y Servicios. [online] Marketing y Servicios. Available at: http://marketingyservicios.com/laagam-una-startup-de-stock-cero/ [Accessed 29 Sep. 2019].
Very interesting to see how a fashion brand can build competitive advantage and differentiate themselves by leveraging social media and online sales platforms. Nonetheless, it would be nice to see emerging fashion brands taking a more sustainable approach to producing and disposing clothing items. Is laagaam by any chance already considering to implement a circular model?
As far as I know, laagam is not making any specific efforts towards implementing a circular model. However, we can see an important environmental awareness behind the brand in different ways. Some examples are: their fight against fast fashion by providing good quality and versatile pieces, integral production in Spain, use of vegan leather and the fact that they produce in smaller badges to avoid unnecessary production.
Hi Paula, interesting read! To be honest, I did not know of this Spanish company before the read. However, the way how they conduct their business is definitely eye-opening since this is the first time I have heard of this kind of business model. I think many of the traditional retail stores can learn from this start up company. The way how they leveraged kickstarter and social media to build up to being a successful fashion company is definitely praiseworthy. In addition, it is kinda amazing that they do not have any stock in the stores. This way they can focus on their customers while saving on the extra space the stock will take. Thanks for the interesting read! 😉
Thanks for your comment, Ann! I also personally find it super interesting and also inspiring to see how such a young company (run by young people) can be doing so well.