A look inside Bonobos' Cyber Monday Ninjapalooza
Now on its eighth year, the in-house event was created to fulfill the onslaught of customer orders.
NEW YORK — It was pouring rain outside, but inside the headquarters at 11-year-old yuppie-ish menswear brand Bonobos, near New York City's Flatiron District, there was a Cyber Monday party in full swing.
This staff party-turned-service-event, dubbed "Ninjapalooza" by the corporate heads and now on its 8th year, was created to fulfill the onslaught of customer orders and requests that come in every Cyber Monday. That attention to customer service is particularly crucial to retailers during the all-important holiday season. A recent A.T. Kearney holiday survey noted that more than 60% of holiday shoppers are willing to change where they go based on negative experiences last year.
Henry Dunn (no relation to Bonobos founder Andy Dunn), the company's senior customer experience (CX) manager and a former Bonobos customer service rep himself (or "ninja," in Bonobos-speak), said over 120 employees volunteered this year to man phone lines, answer emails, and generally pitch in, augmenting what is normally a staff of about 30. Everyone on the Bonobos team, from lawyers to C-Suite execs, lends a hand. The one-day event was a team-building exercise for the company, which is mostly made up of 20- and 30-somethings. It's intense: Dunn estimates that on this year's Cyber Monday alone, "ninjas" fielded as many as 5,000 requests. By contrast, Bonobos usually handles 3,000 requests a week.
To prepare for the event, each representative got a 1-hour crash course in customer care. In turn, the company provides food, beer, and even hosts comedy and musical performances throughout the evening from staff, many of whom moonlight as performers in New York City. Gift certificates and trophies are handed out, and the overall feel was more raucous company-wide party than stressful, rain-soaked Cyber Monday.
Bonobos culture in the age of Walmart
It's certainly a far cry from what naysayers envisioned when Walmart agreed to buy the brand in June 2017 for $310 million. At the time, consumer pushback was fierce, and echoed problems faced by Modcloth, which experienced similar skepticism when Walmart bought them. But sales figures released by both Bonobos and Modcloth in the wake of the acquisitions have not reflected any significant dropoff, and analysts say the outcry was a lot of sound, but very little fury.
"The worst day of the Walmart acquisition of Bonobos was the first day," said Ray Hartjen, marketing director of RetailNext, in an email to Retail Dive. "Customers were freaked out that the brand would 'devolve' into a Walmart brand. That hasn't happened, and the core customer is still with them, bringing new customers into the fold alongside them. Today, customers don't think of Bonobos as a 'Walmart brand,' but rather as its own brand, with its own culture and very much its own market voice."
According to Chris Travers, COO of digital consumer brands for Walmart U.S. eCommerce, maintaining the Bonobos voice was always part of the Walmart acquisition plan. "We have all of these different companies under one umbrella," said Travers, who was at the Ninjapalooza event manning customer service lines. Travers currently handles Bonobos, Modcloth, Eloquii, and mattress startup Allswell, and was previously general counsel and chief business officer for Bonobos. He said Walmart was not looking to change the internal corporate culture at Bonobos.
"A large part of [why Walmart purchased Bonobos] is because of the culture," he said. "So, after the purchase the last thing they would want to do is come in and say, 'Hey, now you have to change the culture.' So they're very hands off in many regards. Now, there are certain things that, obviously, we want to change. But not from a cultural perspective. More like shipping costs. We want to take advantage of [Walmart] shipping accounts. So there's certain things in that regard that, you know, you have to change. But that doesn't change the Bonobos culture, unless you actually work on those teams."
Travers said that the larger corporate culture remains intact. "I mean like, for instance tonight," he said, gesturing to the managed chaos of the Ninjapalooza event. "This could be three or four or five years ago. It's the same energy. Which I was surprised about. I mean, I was worried initially, when we started talking, about one of the largest companies in the world coming in and saying, 'Hey, your culture's not good. You have to wear a tie.' But that didn't happen."
According to Erin Grant, senior manager of public relations at Bonobos, who was also at the Ninjapalooza event, "Walmart came in with a lot of humility. I looked at the acquisition as a graduation."
Travers added that consumer fears about a culture change at Bonobos also proved unfounded. "Initially, over the first couple months [after the Walmart acquisition], people were worried that the product would change and the quality would change," said Travers. "And what we've said from day one is 'no, it's not.' And in fact it hasn't. Customers don't mention Walmart. No one even cares."
What Walmart brings to Bonobos
Hartjen put the transition in a larger perspective. "Most of Walmart's recent acquisitions have been done with a strategic intent in mind, paying premiums, particularly for Jet, in an effort to build a holistic retail enterprise that stands a chance of going toe-to-toe with the likes of Amazon," he said. "These acquisitions are every bit as much [about] acquiring new retail thought leadership and blended retail talent as it is for the brands themselves."
Hartjen agreed that Walmart has so far let acquired brands such as Bonobos run autonomously. "Bonobos, both brick-and-mortar and online, still feels very much like Bonobos, and distinctly not like Walmart," he said. In addition, Bonobos' availability on Walmart-owned Jet has allowed for some demographic overlap — the Jet urban, millennial customer is the Bonobos urban, millennial customer — and positive brand associations.
Of course, Walmart also gets to learn about that ever-elusive millennial customer from Bonobos, whose fashion-forward male consumer, aged 25 to 45, with a household income of $75,000, is extremely desirable. Bonobos is particularly well-suited to mining that data set, and an event such as Ninjapalooza is like data collection on steroids.
"We've got a ton of valuable feedback today," said Micky Onvural, Bonobos' CEO, who was also present at the event and manning customer service requests. "We also get a lot of feedback and insight into our service experience, and how we can continue to improve that not only here in the head office, but also in the guide shops." 'Guide shops' are Bonobos corporate-speak for their brick-and-mortar inventory-free showrooms.
Walmart is almost certainly paying attention to the information Bonobos is collecting. "Technically speaking, obviously, as a fully owned company, [Walmart has] access [to all that data]," said Onvural. "We don't actively share it or use it, but they could access it if they so desired. They can use it to understand trends in e-commerce, and in apparel and in menswear specifically, if they choose."
There are other benefits for Walmart as well. "The benefit for Walmart is that they are learning how to build brands," said Onvural. "And whether it's Bonobos or Modcloth or Eloquii or Allswell, it's really about how do you build these digitally native brands that they can distribute through other channels, whether that's Jet or Walmart.com or whether it's the Walmart stores."
The acquisition may also help Walmart better understand small-scale retail. "Walmart has a better handle on very large [brick and mortar]," said Travers. "But they don't have a better handle in terms of small shops, and our models are different. We don't have inventory in our stores. So their expertise actually doesn't really apply when it comes to real estate."
Of course, Bonobos is also benefitting from the acquisition, specifically in terms of shipping costs and credit card fees. Moving forward, Onvural said that there may also be opportunities for Bonobos to distribute through Walmart directly, in addition to the distribution via Jet.com.
What's next for Bonobos?
If the activity during Ninjapalooza is any indication, the rest of 2018 will be smooth sailing for the menswear brand, though its impact on parent company Walmart is still untested. "Holiday should be good for Bonobos, but it won't drive results for Walmart as a whole," said Hartjen. "There's simply not the scale. As for Walmart, I expect a banner season. The vacuum created by the disappearance of Toys 'R' Us will be filled by Amazon, Walmart, Target and, to a lesser degree, Kohl's." Although Hartjen said there's not much margin in toys, Walmart should still benefit from increased shopper attention, which should lead to cross-selling of other holiday items.
Moving into 2019, brick and mortar will be a driving force in Bonobos brand development. Bonobos currently has 58 guide shops, with more on the way. Andrew Wingrove, Bonobos recently hired chief experience officer, who was also on hand at the event to man customer service requests, said that expanding into new markets and deepening market reach in existing cities is crucial to the Bonobos strategy. "When you're able to go in [and] chat with someone who is in a store nearby, they're that much more apt to be giving you personalized service," he said. "And so we view the guide shops really as the next mechanism for us to scale. It's efficient from a human capital perspective, but also, as we penetrate deeper into more markets, we'll have that many more people close to our customers as well."
In the U.S. market, Bonobos will open a guide shop in Salt Lake City next week, with shops in Tampa, Florida, and Charlotte, North Carolina, to follow. Looking beyond the U.S., Bonobos recently launched with Nordstrom in Canada, and also currently ships to a select number of international markets. "We have plenty of runway even in the largest cities in the country," said Wingrove. "We don't have stores in Long Island or New Jersey. We're not in Santa Monica or the Inland Empire. We're not in Fort Lauderdale. So we're very bullish on where we can continue to serve customers here in the U.S."
Meanwhile, the party at Bonobos rolls on, and thoughts of Walmart don't seem to be dampening external or internal spirits in the least. "To be frank," said Onvural, "you know, since the acquisition the only thing that has really changed for people is that their paychecks now say 'Walmart.'"