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The Glossy Podcast
Mack Weldon's Brian Berger on surviving as a DTC brand in the modern landscape
00:30:41
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- [00:05]
Danny Parisi
Hello and welcome to the Glossy Podcast. I'm senior fashion reporter Danny Parisi and today I'm speaking with Brian Berger. Brian is the founder and CEO of the DTC menswear brand Mack Weldon, started in 2012. Probably a lot of you listening have heard of them or you, or you know, the, the brand. Maybe you own their sweatpants or some of their underwear like I do, but they've launched into all sorts of other categories over the years. Denim, I think, is a recent addition. And also recently, Mack Weldon had their largest ever marketing campaign came out, including doing TV for the first time. So I'm gonna talk to Brian a little bit about that. I also wanna talk about sort of the way the DTC landscape has changed in the last decade or so, because Brian has been there through all of it. So, Brian, thank you for being here. It's great to have you.
- [00:45]
Brian Berger
Thank you so much for having me. I'm a DTC dinosaur.
- [00:49]
Danny Parisi
I was gonna say, how was my description. Would you say you've been there through that whole DTC period of like the 2010s?
- [00:55]
Brian Berger
Yeah, when we started, there was pretty much Warby Parker and Bonobos were really the two brands that everybody was getting excited about. And I mean, just think about how many companies have come and gone over these years and, you know, and it makes sense. It's like any emerging technology driven opportunity, a lot of companies go after it and flame out and many are able to capture it and really use that as a way to grow faster and more beautifully than traditionally.
- [01:26]
Danny Parisi
I mean, it's like you said, I think anytime there's a big opportunity like that, there's sort of a gold rush. Everybody gets in on it, and then a couple years later, you can see who had an actual handle on how this business model works and who was just riding the wave. Yeah. Just before the recording, you were telling me that you're coming up at the end of the lease on your office. And I was saying a lot of companies don't get to the end of that lease. They sign a big lease and they're not even around by the time it comes up. So that must feel pretty good for you guys.
- [01:55]
Brian Berger
It does. You know, I think longevity is something that we often overlook. We're more focused on, you know, the vanity business metrics that we're all chasing. But I think in the consumer world, specifically, having an opportunity to, you know, be around for a long time and remain relevant to your customer base and still be able to acquire new customers, bring new people into the brand that in and of itself is a huge. Is a huge thing because since the very beginning, we were not focused on chasing any specific trend or being sort of a flash in the pan. We were really trying to solve problems for guys in these product categories that we were focused on. And I think that's paid off. It's enabled us to expand the brand into other categories and it's certainly resulted in a lot of customer loyalty.
- [02:45]
Danny Parisi
Yeah. And in those early days of Mack Weldon, were you in 2012, were you thinking about 2022 Mack Weldon, or were you just thinking about getting through the next year, the next two years? I mean, at what point did you start to think more long term for the brand?
- [03:00]
Brian Berger
You know, I think it's. You kind of go back and forth and you're living in such a tactical, you know, environment when you're starting a business like this. And so, you know, oftentimes what's top of mind are things that are very near term and specific to what's going on at that moment in time. But sure opportunities to sit back and think about what are we trying to build and is what we're doing today helping us get to that next place. And even within that, the environment has changed so much. Early days, it was all D2C, all really building up the E Comm business and the macweld and Direct brand. We didn't have any aversion to wholesale or third party retail, but it wasn't a major priority area for us. Now it is. And part of that is just maturity and part of that is a function of how the market has evolved. And it's, you know, incumbent, I think, on any consumer brand now to have multiple pathways to market. I think just having a singular one is very challenging.
- [04:05]
Danny Parisi
Yeah, I mean, the classic eggs in one basket kind of problem. I mean, I've heard from a couple of brands recently. Somebody was telling me that you don't want to have a company that can only survive in certain conditions, like only when the climate is just right. You'd like to have a company that can survive whether certain things are up or down and whether one channel is up or down. Yeah. So what was your approach when you first started to kind of diversify Mack Weldon a little bit? Did you keep certain things in mind about how do you evolve with the times without kind of losing whatever essential feeling or strategy you had for Mac Weldon from the beginning?
- [04:42]
Brian Berger
Well, I think we always felt pretty good about, you know, our ability to withstand ups and downs just by virtue of the product Categories, we were focused on early days. It was premium basics, so socks, underwear, undershirts, tees, things that every guy needs, every guy wears, and making sure that we are not only delivering good price value, but that we are delivering on the brand value proposition, which was really all around innovation and comfort and easy shopping. And I think those are the things that we've took advantage of in the early days to really make sure that we really stayed very focused on those things. Because I think when you're starting out, you have such a limited window to communicate your value proposition to a new customer. And so that being really focused on those things enabled us to really put something out there that resonated with a lot of people. And we've. We've held true to that even as we've expanded the offering. Much of what we've done has been really driven by consumer sentiment. What our consumers are telling us they want specific fabric or product innovations that they want to see in other silhouettes in other categories. Again, that's worked really well for us. And again, staying away from things that are flash in the pan or chasing a trend or likely to be something that is highly discretionary and a consumer, you know, at a time when maybe they're not feeling great economically or what have you, they opt out of. You know, there's very little of that in our assortment, in our world.
- [06:16]
Danny Parisi
Yeah. And when you do chase a trend or something, I feel like you're kind of. You're crawling out on a branch a little bit, and that's maybe not always the safest place to be. Like you said, when. When things are on the downswing.
- [06:27]
Brian Berger
Yeah. It's not who we are. I mean, fashion is awesome. You know, we love it, everybody. It's exciting, it's art. It's really bottling lightning in these moments. It's never been our reason for being. We certainly admire brands that do it and do it well, but it's just never been our thing.
- [06:45]
Danny Parisi
Yeah. So we've alluded to this a couple times. But I want to ask more directly about what's been your impression of the way the market has changed the last couple years. Like we said, the 2010s, there was a huge wave of DTC brands. And I certainly don't think people are not, like, not buying direct anymore. And, like, DTC is still a completely viable model. But I think it's maybe just not as much of the easy, like, the easy path to success as it might have used to be. I don't know, Maybe. Maybe you disagree, but what's your take on sort of the landscape now for apparel brands and consumer brands in general?
- [07:18]
Brian Berger
I guess, you know, there are peers of mine who often say, and it's true that DTC is a distribution channel, it's not a business model per se. But, but I think what, what you're getting at and what is true is that, you know, digital first brands born online, driven through a series of marketing strategies and tactics usually involving growth. You know, growth marketing through Google and Meta and then email retention strategies. You know, businesses that rely upon those things to create outsized growth that is often or has historically been fueled by venture capital or early stage growth, private equity that was excited by the ability to grow a brand faster and you know, in a lower risk way than had been historically where you have to sign leases and you know, put real capital into building things. So I guess what I would say is that while it's been frustrating as an operator, it makes sense. And I think in some respects it has created a shakeout where brands that don't have a real meaningful value proposition and aren't thinking about the business holistically, both from the standpoint of marketing and distribution, but also how they're operating. Those businesses have not been able to survive. And over the last, at least the last five or six years, you know, it's a function of the fact that it's not a new thing anymore. You know, a lot of the mistakes have been made. You know, the marketplaces have been fully exploited. Right. Meta and Google, those are advertising markets where supply and demand dictate the price. And once all of that arbitrage has been exploited, it's hard to really create an outsize advantage there. Right. So a lot of that kind of normalization has caused a shakeout, which in my view is a good thing because now we're all winning and losing by virtue of well worn strategies and tactics that are enhanced by our history as a Digital first brand. We do still have advantages. We have data advantages, we have customer first advantages, we have creative capabilities that traditional brands don't have for one reason or the other, but largely by virtue of the fact that they've always been somewhat disconnected from their customer. Especially if you're a brand that relied heavily on wholesale. So it's been frustrating as an operator to have to ride the waves up and down and to deal with what has been, at least for us, a big transition over the last couple of years, but coming out the other side of it feeling really good about where we are because we have the lessons of what Got us here. But we've also had to, you know, we have the scars of, you know, having to, you know, kind of go through and make the hard decisions to really be able to survive in this new environment.
- [10:14]
Danny Parisi
Yeah, yeah. I mean, I think that's very eloquently put and kind of leads into what I was going to ask, which was how you guys have ridden through these last couple years. And like you said, I think there's, you are insulated from some of the trend cycle kind of because you have this very universal, seasonless kind of product that I think is always appealing in terms of marketing. You mentioned in the early days of this wave we're talking about, there was a huge ability to scale through like Google and Meta. And I have heard from a lot of founders that some of those platforms are just increasingly feel like a money pit a little bit. You're just like the costs keep going up and you're not always clear exactly what value you're getting from it. What's your take on sort of digital marketing for a digital brand? And we can then talk about how you guys have a TV campaign because that's a much more traditional channel. From a marketing perspective.
- [11:06]
Brian Berger
It's really challenging right now to rely upon digital marketing as your primary means for relevance and growth. Just there are so many things that go into creating any sort of advantage there now that is just very hard for a new brand to do. And so that is why in addition to whatever you're doing on these platforms, there also needs to be other things happening. And whether that be an innovative partnership strategy with like minded brands or companies that complement or enhance your, you know, kind of brand promise to your consumers. Could be other, you know, types of marketing, influencer marketing brands have had a lot of success with. It could just be, you know, bottling lightning on a singular product and using that as the basis to know, grow a bigger platform. But relying on growth marketing, primarily Meta and Google as a means as your entire reason for being I think is really challenging to do these days. You know, we're able to do it as part of a marketing mix. We're able to do it because again, we have 12 years of incumbency and a customer base. You know, we are smart enough now to know like these are our thresholds. This is our tolerance for what we're willing to spend and invest to get a new customer and not go beyond that. Right. There was a time when everybody suspended reality as it related to profitability because, you know, it felt like, well, we'll worry about that later. Right. We can continue to raise money from investors at increasing valuations. We're not being penalized for losing money. So let's just keep doing it.
- [12:51]
Danny Parisi
Keep burning cash.
- [12:52]
Brian Berger
Yeah. Then the music stops and it's very hard to pivot. You can turn the advertising on and off, but you can't make the inventory disappear that you bought to sustain a business that is much larger than the one that you're deciding to shrink. Right. Which is what happened to many of us coming out of COVID Right. We had all this inventory. A brand like ours, product is very relevant. And coming out of that period, not only did you have all the things that were happening in the consumer side of the world, but investor capital dried up. IOS14 happened and it really, really upended the digital advertising marketplace. So you're not able to get new customers, you have tons of inventory, you have no ability to fund your business. You can't turn it on a dime. So I think that's really where a lot of companies. The rubber method for a lot of companies in our space.
- [13:45]
Danny Parisi
Yeah, for sure. So can you talk a little bit about flexibility then on, I guess in marketing and just, maybe just across the whole business, like, if you don't want to get caught by situations like that, what can you do as a founder, as a brand leader, to position yourself well to handle things like that when they come up?
- [14:04]
Brian Berger
Well, I think it's discipline right on the front end. So, like, as it relates to marketing initiatives, you know, we try and steer clear of marketing initiatives where we don't have some level, some degree of flexibility. Obviously, you know, digital channels are very easy to throttle up and down. Television, radio, podcasts, a little different. Right. You have to schedule that out, commit to the inventory for a period of time. But even there is a place where we're, you know, we're doing that in the most, in the shortest increments that we possibly can. On the other side of it, on the, on the sort of like inventory side of it, which is the sort of unsexy part of it, it's just making sure that you have ways to move through inventory if the sales aren't showing up. That could be multiple channels of distribution, just like other high quality ways to sell your product. It could be some form of off price or liquidation type of channel. The big brands have been doing it since the beginning of time. Like that's what the warehouse business is all about. That's what's fueling TJ Maxx and those kinds of places. Right. And you don't want to have that be where things end up. But if you get into a situation where you're heavy and you need to, you know, continue to move through inventory to create cash flow to fuel other parts of the business, you know, you should have those. You need to be building those muscles up.
- [15:31]
Danny Parisi
You guys are experimenting with some new channels, mentioned that you guys have a big marketing campaign coming out or maybe I think is out already actually as the time of this recording. Comfortable anywhere I saw the spot. It's very fun, very lighthearted. And correct me if I'm wrong, this is your first TV campaign that you're doing, right?
- [15:48]
Brian Berger
It is, yeah. We had developed something coming out of COVID actually, but the campaign never really saw the light of day because of all the other things I just Talked through. When iOS happened, it really upended our business and we really had to make a very quick decision to really pull back on all advertising in service of making sure that we preserve resources to fight another day. So that campaign never really happened. This campaign was really born out of the last year and a half of really. Right. Sizing the business, getting the business, getting the core business and the core marketing programs as profitable as they've ever been, which has enabled us to start to think more intentionally about how do we want to get the brand out into the world beyond just these very, very narrow, what ends up being a very, very narrow reach and audience that we're hitting through, you know, through the algorithm based marketing channels. And so this is really about creating awareness, you know, focusing on, you know, customers who are not necessarily in market and ready to buy, but sort of priming the pump so that when customers are thinking about making a purchase or they're thinking about any of the products that we're famous for, you know, we're very, we're top of mind for them. Right. And so the top of funnel awareness marketing ultimately fuels, you know, more velocity in your lower funnel, you know, more acquisition oriented growth marketing efforts.
- [17:22]
Danny Parisi
Yeah.
- [17:23]
Brian Berger
And again, we're in a position to do that now in a, in a, in a thoughtful way because of the investments that we've made over the last year and a half both on the, you know, generating more revenue per customer and also having a more profitable business. Right. Having more contribution margin per order to invest back, to reinvest back into marketing.
- [17:46]
Danny Parisi
Right. And interesting that you say the focus on the top of funnel because was thinking today about. It's a little hard for me to tell how well known a brand is because I am like plugged into fashion and apparel. So, like, I've heard of it, but I don't know if other people have. But I feel like Mack Weldon has pretty solid name recognition. One thing I see is that you guys pop up on lots of lists of the most comfortable underwear, the most comfortable. I see you in a lot of recommendations and GQ and different places like that, especially men's magazines like that. What's your read on Mack Weldon's brand awareness? Something you really want to put a lot more emphasis on. Do you feel like there's a lot of room there? Do you feel like that's already a strength?
- [18:30]
Brian Berger
I think there's a lot of room there. I think it's also a strength. Brand awareness is one of those things where you can never have enough of it. Right. You want to have it in the right way. Right. I mean, we don't want to go and, you know, be we're not a Walmart brand, but, you know, so it has to be right sized for where we are. But, you know, we have been playing in a very, very narrow sandbox for a long time. Take even bigger brands than us, Right? Like take Warby Parker. I mean, how many I've got. I can't even tell you the amount of times I've gotten together with folks who don't live in New York or California. And like, I'll mention it and I'll be like, what's that? And I'm like, these guys have like 200 stores and, you know, they're a public company. And you know what I mean? So the awareness piece, I think, is something that you need to have a certain degree of constant, regular drumbeat on. Otherwise you do run the risk of being drowned out by other people making more noise than you. So our goal is not to be wasteful or be on the super bowl or things like that. But we do need to be out there. Right. The market's gotten increasingly more noisy and we need to start to reach consumers that are outside of this very, very, very narrow focus area that we've been targeting for the past several years.
- [19:45]
Danny Parisi
Yeah, yeah. I mean, it is kind of like every part of the funnel is important. You can't really have one without the other.
- [19:52]
Brian Berger
Yeah. And the thing about non digital channels or channels that are hard to really directly attribute a result from is that everybody gets scared. Right. Our businesses were born on the ability to measure. I invest a dollar and I get $1 plus back. Right. I mean, that was the whole sort of essence of what brought us to beat. Right. So now you're saying, are you just gonna go and do television advertising? How are you gonna measure that? Well, not only does the technology enable you to triangulate much more specifically on the effectiveness of those campaigns, able to buy it in a more surgical way. Right. So you're not. You're limiting your risk. But the purpose of it is not to sell a pair of sweatpants or a pair of jeans. The purpose of it is to create awareness about the brand. What it stands for, their value proposition is so that when a consumer is in market, you're the first person they think of. And it just requires a bit of a different mindset. So we have been ourselves and certainly our stakeholders, like, starting to try and get comfortable with that.
- [20:56]
Danny Parisi
Yeah, well, like I said, I saw the spot and I think it's very fun and very memorable.
- [21:00]
Brian Berger
Yeah. Which one did you see? Do you know which one you saw? Did you see the whistle one?
- [21:04]
Danny Parisi
It's the guy dancing and. Oh, he's whistling. I think there's the whistle.
- [21:07]
Brian Berger
Yeah, there's two spots.
- [21:08]
Danny Parisi
Whistle one. Yeah, I just saw the whistle one, but I thought it was delightful.
- [21:12]
Brian Berger
Yeah. Yeah.
- [21:13]
Danny Parisi
And how involved are you personally with the creative side? Do you have much input there or do you have people you trust to handle that?
- [21:21]
Brian Berger
I'm involved, but I'm not. I don't micromanage that stuff. One of the big investments we've made over the last year and a half is really trying to lock in not just like our identity and sort of how we want to show up in the world in terms of the aesthetic pieces, but it's also really just the brand strategy, the brand values, the brand purpose. And so having that in place, in addition to really high quality talent on the team, has enabled us to get to just a much higher quality result. And so I don't need to be in the weeds, but obviously with something as big as this, just in terms of investment, I would be reasonably involved.
- [22:05]
Danny Parisi
Yeah. Brian, let me ask you one more thing before we wrap up. We talked a lot about marketing, and you can answer this from a marketing perspective if you want, but it's kind of could apply to anything. I'm just wondering, where do you think brands should be putting their money and their time and resources right now? We talked about being flexible, and obviously you don't want to have everything in one basket. But is there one thing that you think brands maybe really should be looking at or really should be investing in or making a priority?
- [22:34]
Brian Berger
I think it really has to be a basket of things, and I'm not Looking to, you know, give you a non answer. I just, I think that there is a playbook of foundational things I think every brand needs to do. I think if you're an early stage brand, you have limited resources, of course you're going to gravitate to things like Meta and Google and TikTok and places where you're able to, you know, deploy, spend, learn really fast and then, you know, hopefully up that spend. But other things, like you talked about how you see Mack Weldon on lists all the time and how, you know, we're constantly being spoken of well by high quality publications. It takes a lot to build that up and it is an effort. It's not these aren't editors waking up and deciding they love us. There's a lot of elbow grease that goes into those programs. And the benefit of that is once you've done it, it lives in an evergreen way. Right. So you want to have all those seeds planted. Also you probably want to have a partnership or two just to get out of the gate. When we started, we were nothing but we had this really cool partnership with Equinox. And even though from a dollar to the business perspective, it wasn't significant, the exposure level and the credibility it gave us was enormous. You do want to pick a basket of things so that you're not solely relying on one thing and you should obviously force yourself to not have that. Some of those things not be pay to play. Right. Partnerships, things that are just don't require you having a budget to spend on advertising.
- [24:15]
Danny Parisi
Yeah. And then one more quick thing and then we'll be finished. But just cause we've mentioned this a couple of times, the brand is 12, 13 years old now. Do you feel like you are sort of over the hump of the most difficult part? Like I know for a lot of people getting a brand off the ground initially is like so difficult. There's so many things, so many obstacles, so many things ahead of you. Do you feel like you have a solid handle on everything now or do you feel like you're kind of past the most difficult part of Mack Weldon's history?
- [24:46]
Brian Berger
I feel like I have a solid handle on it, but I absolutely do not feel that we're past the most difficult part. I mean, look around and you see brands, 100 year old brands. I look at Brooks Brothers, right? I mean the company, you know, buy a brand, it, you know, it falls on hard times, it gets scooped up by, you know, you know, a larger licensing company and it has a second life. But you know, I don't think it's a. It's a tough business. You gotta stay relevant. You gotta. There's a lot of things that can affect your, you know, your longevity. There's risk all over the place. So it goes like this for me, and I feel like from the standpoint of the business, where we've come from and where we are right now, we're in a much better place. Profitability is a really powerful thing because it enables you to weather certainly economic things and things that are potentially existential to your business, given the size of your business. Right. So the more headway you have to navigate those ups and downs, the more secure you feel. You know, that doesn't mean you're going to be successful. It doesn't mean you're going to grow. It doesn't mean you're going to. Somebody's going to buy you for some huge multiple in the future, but it does mean you have time to think about it, right? You're not going to be wiped off.
- [26:03]
Danny Parisi
The face of the earth, some security.
- [26:04]
Brian Berger
Based on one bad cycle.
- [26:06]
Danny Parisi
Yeah. Yeah. Well, it's definitely a tough business, but I really appreciate you answering my questions, giving your insight to how you guys have made it through the last decade. Plus, thank you so much for being here, Brian. This was a great conversation.
- [26:18]
Brian Berger
Yeah, thank you so much, Danny. I really appreciate the time.
- [26:28]
Danny Parisi
For those of you listening, don't forget to give us a rating and a review on Apple Podcasts or Spotify, wherever you listen to this, because that helps us out so much. And don't forget to subscribe to the glossy podcast because you'll hear interviews with industry insiders like Brad Ryan every Wednesday, and we can review episodes with me every Friday. Until next time, thank you all for listening.