Summer 2000: Smartcasual.com Targets Men Who Hate to Shop

Smartcasual.com (http://www.smartcasual.com) co-founder Jesse Stein likes to describe his New York City-based company as a one-stop source "built around the male customer in pain."

An e-retailer of brand-name casual apparel, Smartcasual.com was established in June 1999 for the corporate executive, said Stein, "who concedes he'd like to dress well in the workplace, wants to look stylish, but has no time and is frustrated with the offline shopping experience."

A beta site was launched in April featuring a limited assortment of nine outfits as well as profiling tools and sizing aids. A more extensive site is slated for August that will feature top apparel brands such as Perry Ellis, Claiborne, Axis, Wilke Rodriguez, New Man and 655.

Smartcasual.com hopes to snare a piece of the estimated $22 billion in annual sales of men's casual clothing and the company has convinced a lot of industry heavyweights that its online marketing strategy is viable. The board of directors (also investors) include Richard Marcus, former CEO of Neiman Marcus, Bob DiNocola, chairman of the Zale Corporation, and Edward Jones III, co-founder of Perry Ellis Men's and former president of Esprit Men's. A style board providing editorial guidance includes fashion editors from Esquire, Maxim, and Rolling Stone.

Depending upon whose figures you believe, studies from Jupiter Communications, Forrester Research and Goldman Sachs indicate that this market is expected to grow anywhere between 150-200 percent each year through 2005. Another study by analyst firm Flexo-Hiner said 75 percent of American men now dress casually every day of the workweek.

To capture their share of this potentially lucrative market, Smartcasual.com has taken a different approach in attracting customers. Rather than running banner ads, the company has inked deals with a number of major corporations giving them one-click access from employees' desktops to their online store.

"We now have access to 2.4 million corporate employees," Stein said. "In August, a link to our store will go up on the corporate 'intranets' of firms such as Hewlett-Packard, 3M and Microsoft. These are analogous to shopping portals and provide us with an ideal audience."

The company is also doing "street level guerrilla marketing" - part-time employees have been hired in New York City and San Francisco and are handing out promotional scratch-off cards. The company has ordered several million of these and will distribute them in five other major cities this summer (Smartcasual.com declined to name them).

Smartcasual.com said it currently acquires customers for about $35 each. A study from BCG/ Shop.org estimated that the average nascent e-retailer spends about $108 per customer.

"We enjoy 45 percent profit margins and low marketing costs which is why we're able to keep our customer acquisition cost as a percentage of gross profit so low," Stein said. He added that in August profiling data would be fed into Smartcasual.com's 'SmartValet™' search engine that will leverage user profiling and behavior data to make individualized recommendations.

"It's designed to serve up pre-screened, pre-matched and pre-sized items to the shoppers most likely to want them, and all this in Internet time," Stein said.

Although the company wouldn't disclose any significant site data, Stein said Smartcasual.com spent only $20,000 to market their beta or 'test' site, attracting 70,000 unique visitors in the first month.

The beta site currently contains a limited product assortment, a brief company profile, a 'Ten Commandants' of dressing casual, a 'Foundation of a Smartcasual Wardrobe' providing a checklist of casual clothing basics, FAQ about business casual social mores, and a tongue-in-cheek 'Smartcasual Don'ts' of what not to wear at the office.

Visitors can also enter the company's 'Super Cool TV Sweepstakes' and a chance to win a $5,000 56-inch Toshiba high-definition television. To enter you need to answer six personal questions - first and last names, e-mail address, zip code, gender, and how much do you typically spend on an outfit for work.

Stein said Smartcasual expects to be profitable by 2002.

"We're wholly focused on men's business casual apparel and are dedicated to the customer who has been overlooked both online and offline."

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