In the five years that Michelle Grant was a senior merchant at Victoria’s Secret, she found herself immersed in the brand’s seductive pink world, populated by barely clad supermodels. But she also discovered some interesting facts about the underwear industry: It’s a $110 billion market worldwide, but the landscape is monopolized by a few key players that have been around for decades, if not centuries.
Fruit of the Loom, Jockey, and Hanes, each founded more than 100 years ago, still rule the lower end of the market, reaching consumers who treat underwear as a commodity. On the higher end, consumers turn to department store staples like Natori and Wacoal, or luxury brands like La Perla or Agent Provocateur. But Victoria’s Secret, which came onto the scene in 1977, is by far the biggest underwear retailer in the world, earning $7.2 billion in revenue during the last fiscal year with an average of $5.06 million in sales at each store.
“The market is dominated by one brand, with one point of view,” Grant tells Fast Company, referring to Victoria’s Secret’s emphasis on sexiness.
Grant decided that there was room for an underwear brand that offered an alternative approach. She wanted to create intimates that would allow women to feel comfortable throughout a 14-hour day–from the gym to the office–that didn’t look like something your granny (or your college-aged granddaughter) might wear. Over the last year, she’s been scouring the best performance fabrics available to create her ideal underwear. Next Tuesday, she’s launching her brand, Lively.
Lively joins a spate of online startups that have blossomed over the last five years and hope to find their place in the massive underwear market. They are differentiating themselves from the more established companies by challenging the idea that it must be either sexy or comfortable, and they’re using high-tech materials to improve the experience of wearing it.
Brands like MeUndies and Thinx, which launched in 2012 and 2014, respectively, have been growing quickly. Both recently closed funding rounds of several million dollars and have national advertising campaigns. They’ve demonstrated that it is possible to sell underwear online and paved the way for dozens of other companies—including Lively—to start their own e-commerce underwear brands.
As a Victoria’s Secret veteran, Grant is familiar with how the company has crafted an entire culture around its products. It’s not just selling bras and panties, she points out, it’s selling an entire worldview. And one way for a woman to experience it is by walking into the stores, which are furnished with glamorous changing rooms, plush pink ottomans, and tables full of underwear for customers to see and touch.
“Online, it can be very hard to provide that experience,” says Natalie Hwang, a venture capitalist at Simon Venture Group, who has invested in both online and brick-and-mortar underwear companies. “Physical retail is a very powerful platform for brands to communicate who they are and interact with their consumers.”
Since Grant is only selling her products online, she’s had to design the world of her brand virtually. Even before selling a single product, she’s used photography to express what her brand is about on Instagram and Facebook. “We’re telling our audience we’re inspired by women with wild hearts and boss brains,” she says. “We’re saying that being happy, healthy, and comfortable is sexy.”
And that message has gained a lot of traction, signaling that there is perhaps a gap in the underwear market for products that don’t ooze with sex, or sacrifice style for comfort. The first weekend she asked her social media followers to spread the word, she received the email addresses of 133,000 people who wanted to be informed about Lively’s launch. “I thought we had been hacked,” she recalls. “The interest crashed our servers.”
MeUndies–which makes underwear for men and women made out of a soft, breathable fabric called MicroModal — has a similar approach. “I wanted to create a brand that spoke to the modern consumer,” says founder Jonathan Shokrian. “I felt that most of the brands out there spoke down to you; they weren’t relatable.”
Shokrian points out that many established brands, from Calvin Klein to Victoria’s Secret, advertise using supermodels in sexy poses. In contrast, MeUndies’s message is that people should feel comfortable in their own skin; their marketing is carefully designed not to be intimidating or hypersexual. “Sexiness is something we think should be accessible and attainable,” he says. “It’s more an attitude and a healthy lifestyle than an outward appearance.”
One of their main drivers of growth has been working with podcast hosts who understand what their brand stands for. Bill Simmons, Tim Ferriss, Joe Rogan, and Bill Burr have all endorsed MeUndies on air. “It’s not a channel you can just jam any product down,” Shokrian says. “The hosts genuinely need to believe in it to put their name on it.”
This messaging has gone over well with their customers, 65% of who are men. Since 2012, their revenues have more than doubled every year; they’ve already shipped over a million pairs of underwear across the country and around the world.
But as much as a consumer is attracted to a brand’s message, there are still some obstacles to getting them to buy the product. Without seeing it in person, it’s hard to know if the fabric is a good quality or get a sense for how it might fit. And unlike clothing products, nobody wants to send used underwear back to a company.
Online brands have to get creative with enticing consumers to take the plunge. White Rabbit New York, a brand that is launching this summer, offers a comfort trial program: women buy two pairs of underwear, try one and if they don’t like it, they can return the other but receive a refund on their full order. MeUndies does not charge shipping and has a very liberal refund policy, so there is little risk to giving the product a try. Thinx offers a satisfaction guarantee.
They also have to provide detailed sizing guidelines and offer customer service representatives that can advise shoppers. However, these efforts pay off in the long run because consumers are typically very loyal to underwear brands once they land on one that they like. MeUndies, for instance, says that a customer will typically order one pair of underwear, then come back to buy a pack of five or 10. A proportion also come back to subscribe for the brand’s underwear of the month program.
Between 2012 and 2014, a spate of online companies–including Dear Kates, Knix Wear, and Thinx–began to offer high-tech period underwear, designed to prevent leaks. “I have a feeling that we were all working on our ideas at the same time,” says Joanna Griffiths, founder and CEO of Knix Wear.
Griffiths believed it was about time for some innovation in women’s underwear. In the ’70s and ’80s, brands like Triumph International incorporated a layer of plastic into their regular underwear and marketed it as period underwear. And other brands that touted sexiness didn’t offer period-friendlier underwear at all. “The very idea of ‘period underwear’ goes against Victoria’s Secret’s branding,” Griffiths points out. (Victoria’s Secret did not respond to Fast Company’s request for a comment on their product mix.)
However, since the barriers to starting an e-commerce company were so low, Griffiths decided to invent her own period underwear and sell them online. She bought swaths of high-tech fabric from companies like Invista to construct underwear that was both comfortable and functional. Some underwear even has a layer of carbon to absorb odors. She’s now expanded into a range of other performance underwear for sport, including a high-tech bra that earned $1,514,492 in a crowdfunding campaign.
According to Tom Patterson, who founded men’s underwear brand Tommy John eight years ago, the design of boxers and briefs was also wanting. For years, he had been frustrated with undershirts that rode up and underpants that needed to be inappropriately readjusted in public. He went to the garment district in Los Angeles to find better materials and developed a line of shirts and underpants that are soft, moisture-wicking, and customized for different activities.
While the prospect of taking on Calvin Klein and Jockey was intimidating, Patterson believed it was worth a shot because there was so much room for improvement. “I believed that functionality was something that had been missing in the underwear category for a long time,” he says. “Guys had just gotten used to the fact that they had to readjust themselves throughout the day.”
His bet paid off. In fact, while selling underwear online has its challenges, he’s found that many men prefer it to awkwardly discussing their privates with a sales representative at a brick-and-mortar store. Some retailers report that up to half of men’s underwear is purchased by women, so in some ways, underwear e-commerce is great solution for men.
But Patterson still works to make the process as easy as possible for his customers. Instead of expecting them to understand the different categories of men’s underwear–boxers, briefs, boxer briefs–there are clear descriptions of each. Instead of using euphemisms to describe comfort, the website states that the underwear comes with a “no-wedgie guarantee.” There are lots of pictures, but they are selected carefully. “We show flat shots of products, but if you want to have a look at a picture of underwear on a man’s body, that’s a thumbnail option you can click on,” Patterson says. “We’re not showing crotch shots in your face on the Internet, because that’s weird.”
While the majority of Tommy John’s sales occur through the website, Patterson is not ruling out the possibility of opening a physical store someday. He’s already started selling products at Nordstrom and sees the benefits of the offline retail experience. MeUndies has also says that a brick-and-mortar store might be in the cards down the line.
The internet has made it possible for these brands to tap customers who might otherwise have shopped elsewhere. And as they’ve proven that there’s a market for their high-tech products and alternative message, it’s possible that we will begin to see these once online-only brands appear next to Victoria’s Secret or Calvin Klein at the mall.