Every few months, Whitepenny engages in dialogue (never more than 3-questions) with leading founders, CEOs, entrepreneurs, innovators, investors and taste makers that live at the intersection of brand, strategy, digital storytelling, and consumer experience.
This March we caught up with Louis Joseph, Founder of the luxury alpine sportswear company, Alps & Meters, to discuss the digital transformation of the luxury apparel industry and why the online advertising arbitrage is dead.
He was told $1000 sweaters were crazy, “you can’t build a brand on that concept,” industry insiders and investors said. Alps & Meters are proving them all wrong.
How has digital transformation impacted your company, the consumer experience (CX) and apparel industry? Has anything changed post 2020?
If “digital” did not previously permeate the entire Alps & Meters brand, it now most certainly has oozed into every corner of the company, to the extent that the idea of “digital” itself is now fully institutionalized as a non-novel mode of operation in all functions. Digital acronyms, analytics, data, and our “tech stack” are common vernacular at our HQ and out of sheer necessity, my personal digital IQ has accelerated dramatically. There isn’t a query, tactic, or strategy that does not intersect with a digital medium, challenge, or opportunity.
This standardization of digital at Alps & Meters is likely happening throughout the soft goods and luxury sectors. And while today you cannot be successful without the mastery of all things digital, such a new muscle to flex remains only as strong as a brand’s core value proposition and differentiation. While reaching and engaging consumers has shifted heavily to E-Commerce, video & live chat, etc., it is our expectation that this sand will keep shifting and new avenues of CRM (Customer Retention Management) will be available to brands within arenas like virtual reality and others which still appear nascent, but may very well be the future of user engagement.
You recently shared that the B2C online advertising inefficiencies, or arbitrage, that existed early on in digital (e.g., when few companies were investing in paid search) no longer exists – it’s dead. Please explain and go deeper for our audience, as we are hearing about and seeing, with increasing frequency, 3:1 LTV : CAC tactics being pumped by marketers.
The internet as a place of commerce is flooded with the same intentions from all brands…engage and acquire customers at the lowest cost possible and facilitate a fantastic post-consumer experience and ongoing journey to cultivate long-term loyalty and LTV (Long Term Value). The first DTC (Direct-to-Consumer) brands reaped significant rewards as the first to advertise within platforms such as Facebook and they operated in a less competitive universe, which fundamentally allowed for a clear-cut comparison of acquisition costs and contribution margin from one channel to the next.
However, today, digital user engagement is an imperative, but the competitive landscape has exploded with new, pure play/digital-only brands along with analog legacy organizations rushing online. All of which has increased CPMs (Cost Per Thousand Impressions) and makes for channels in which CAC (Customer Acquisition Cost) can fluctuate dramatically from one audience to the next depending on its desirability to various brands, while external forces such as the recent Presidential Election and advertising therein contributes to additional distortions which are difficult to manage.
Now layer in the faceoff between Apple & Facebook surrounding user privacy on iPhone/mobile devices and you have another opaque fog which will reduce data granularity and erode customer targeting accuracy. All of the factors above create a “wild west” environment where players are forced to play and fold hands depending on their budgets; and whether you are the short stack at the table or flush with a war chest of monies, the internet is now more expensive and cash intensive than ever.
What is the best advice that you have received regarding the formation and launch of Alps & Meters that you never took, and how did it positively impact you (that is, perfectly sound advice that you ignored / disregarded that may have derailed your current success)?
The best advice that I’ve been given was to raise as much money as possible. However, due to Alps & Meters unique luxury position, and farm-to-table but healthy growth trajectory, the company does not fit institutional investors’ profiles and thus capital acquisition has remained purposefully family office (i.e., high-net worth individuals or families who invest capital on their own) and angel-investor driven. The benefit of continuing to bootstrap the brand/business, while certainly favorable to the preservation of equity, is that Management and our Board of Directors have fundamentally had to remain hyperfocused on the most impactful areas of opportunity and those which could be realized for a minimal amount of investment. As such, by default, we were not in a position to attempt to run faster than our small but mighty engine would allow. And because of this regulator, the brand avoided the distraction of seemingly large growth accelerators which, in fact, likely would have resulted in higher cash burn and limited value creation.
Overtime: tell me about something that is important to you personally (family, philanthropy, a cause or simply something of personal interest)
Entrepreneurship can be a myopic and all-consuming journey. It is important to maintain perspective about the various challenges encountered on a day-to-day basis. No less committed to Alps & Meters, family remains paramount to me and always comes first. Family is my driving force, my fuel, and my true love. At the end of a hard or challenging day at Alps & Meters, I always know that my circumstances, my upbringing, and my health and that of my family make me one of the lucky ones and within the volatile economic environment of the moment that constant realization is more stark than ever. I hope that someday Alps & Meters can be an engine that will allow my family and I to make greater contributions to our community and to causes that we care about.
Joseph is the former Director of Strategy & Innovation at PUMA/Kering and now Founder & CEO of luxury sportswear venture Alps & Meters. Louis is a passionate brand builder and outdoor enthusiast who has skied the world over. He continues to spend time in the mountains with friends and family where he finds both solace and creative energies to further Alps & Meters’ mission to uphold the classic traditions of alpine sport.