When Monica Royer launched her baby clothes business five years ago, she was ready. And not just because she was a new mom who fiercely believed that whatever touched her infant daughter’s skin should be safe and organic—although that certainly helped.
What really made her ready? Her family ties.
Royer’s younger brother, it turns out, is e-commerce star Andy Dunn, the founder of men’s clothes retailer Bonobos. Dunn famously launched his brand in 2007, fresh out of Stanford business school, and Royer, then a pharma executive, served as an official consigliere.
Dunn confided in her almost every day, ringing her up to unpack all the excitement, stress, and grand ideas that come along with launching an ambitious startup. It was a close relationship that was forged when they were kids growing up in Chicago.
“Our parents made us work through our disagreements from the time we were really little,” Royer says. “I think that laid the foundation for a lifelong bond between the two of us.”
So, it’s no surprise that Royer decided to name the baby brand after that steel-forged sibling love. Yes—you guessed it—Monica + Andy.
Royer, who is CEO (Dunn is chairman of the board), taps into her years of advising her pioneering brother and watching Bonobos’s highly publicized ups and down as she builds out Monica + Andy.
The business press tracked Bonobos’s early wave of enormous growth, including the fit-focused e-tailer’s struggle to keep pace with investor demands and establish a positive company culture; and its eventual acquisition by Walmart for $310 million, which puzzled observers because the two companies seemed at odds culturally.
“We’re in this interesting position of being able to learn from Andy’s successes and mistakes as we build another e-commerce company,” Royer says. “We know exactly how decisions he made at Bonobos panned out.”
For Royer, that means studying the Bonobos playbook, but not necessarily following it. I chatted with Royer recently to discuss what’s working for her—and what needed tweaking.
What’s your thing?
Bonobos now sells more button-downs than pants, but it made its name with tailored chinos designed to flatter a man’s derriere, while most products on the market stretch out resulting in what Dunn once described as “khaki diaper butt.”
Bonobos managed to capture the attention of fit-focused men who were then introduce to the rest of the product line, which now includes and included shirts, blazers (sold in standard and slim cuts), and even tuxedos.
For Royer, her thing was certified organic cotton clothing that she could tell new moms was trustworthy on their infants’ skin. Monica + Andy’s initial focus was on marketing to women before they gave birth—and to friends and family buying them gifts.
Among the big sellers were Hospital Cuddle Boxes, which come with a blanket, top knot cap, and newborn baby pants and tops. While the brand now makes clothes for children all the way to age 7, she continues to specifically target pregnant women. These women could put the brand’s products on their registry, which introduces the brand to their friends, who likely include other new parents.
“I wish we had an unlimited marketing budget to target all our potential customers,” she says. “But we don’t, so we need to be very strategic about who we introduce the brand to.”
The brand has a robust social media that deploys targeted ads and runs an Instagram account with adorable newborns in tiny hats and blankets covered with Monica + Andy prints, including whales, sushi, and macarons. One yawning baby wears a onesie covered in an avocado pattern. A pair of twins wriggles around in booties and bodysuits with a banana print.
Choose the right price point
Neither Bonobos nor Monica + Andy are discount brands. Their customers tend to be willing to pay more for higher quality, and better fit and design.
In 2013, Dunn published a fascinating piece on Medium about the e-commerce pricing dilemma, saying it was impossible to compete with Amazon.
“The answer is you don’t compete with Amazon in the low-cost selling of third-party brands, because you can’t. The downward pressure on your gross margin combined with operating at a fraction of Amazon’s scale means you won’t get past being niche,” he wrote.
The Monica + Andy brand sits squarely in the middle of the market. Onesies cost $26, hats are $13, and dresses start at $38, which means that its more expensive than say, Carter’s and Old Navy, but less expensive than luxury brands like Jacadi and Petit Bateau.
How big, how fast?
Bonobos grew fast thanks to the $127.6 million poured into it by VC firms, putting the brand under intense investor expectations and rapid scaling pressure. Monica + Andy has only taken around $2 million but is in the midst of a new funding round for further expansion.
Royer is, for now, happy with growing at a more modest pace, steadily building a fan base among chic, generally progressive urban moms. That growth is enhanced by her determination to collaborate with customers on the brand’s aesthetic.
For instance, unlike other children’s brands that have very distinct gendered collections, Monica + Andy makes a lot of unisex items, which seems to resonate well with modern millennial parents. Many of the prints, from rainbows to peaches and palm leaves, are popular with parents of both boys and girls.
“Our customers seem to like the freedom we give them not to force their kids into a predetermined look,” Royer says. “We’ve found pink is a popular color for boys, and gray is popular for both boys and girls.
A brick-and-mortar strategy
Both are digital native brands but also include brick-and-mortar locations in their strategy, bucking the so-called retail apocalypse. It is estimated that more than 3,800 stores will close in 2018.
In 2015, Dunn went against the trend by launching a new kind of store, which he called Guideshops. The idea was for customers to be able to stop by, try on some products, and place an order, which would eventually get shipped to their home from the warehouse.
It was a win-win situation: Bonobos could pick smaller, more cost-effective retail spaces since it would not carry inventory, while the customer could continue their day without schlepping around heavy shopping bags.
Royer also decided it was important to launch stores. It was a different strategy from competing premium children’s brands, like Tea Collection and Petit Peony.
“The stores let people touch and feel product, of course,” she says. “But for me, the real value of the store was to allow me to really understand my customer and learn what they wanted. It allowed us to better cater to her.”
Like its urban mom strategy, its six stores are in posh neighborhoods, including on Chicago’s Magnificent Mile, New York’s Upper West Side, and in Atlanta’s affluent Dunwoody suburb. The clothes are also sold at Nordstrom.
Royer’s stores also started as Guideshops, but she found she had to go a different route from the Bonobos approach. She discovered many customers want to be able to go home with products, rather than have them shipped. A big part of the business comes from people who are buying gifts for upcoming baby showers, and they want to be able to go home with products in tow. The brand now caters very specifically to these customers, offering complimentary gift wrapping, and offering curated sets of coordinated products. Customers still have the option of having their purchases delivered to their home, if that suits them better.
“After Bonobos launched, we kept seeing stories about brands that wanted to be the Bonobos of X or the Bonobos of Y,” she says. “But you have to be careful about what you borrow from other successful startups.”
Overall, it’s been a lot of fun creating a brand that centers around so much cuteness—and is rooted in family.
“I was inspired to build a business like this because of my daughter, who just turned seven,” she says. “I hope to one day give her a sibling largely because my own lifelong relationship with my brother has been so great.”