Everlane: The Online Clothing Retailer With Nothing To Hide

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Unconventionals // Season 4 • Episode 6

Think about your favorite piece of clothing. You probably know what you paid for it, but do you know how much it cost to produce it? The tag may tell you what country it was made in, but do you know exactly where? If you shopped with online clothing retailer Everlane, you’d know these details. 

http://www.youtube.com/embed/x6-HyKxmAcs

Typically, the fashion industry keeps the difference between production costs and retail price under wraps. But Everlane is driven by the mission of “radical transparency,” and will openly tell you anything about pricing, and supply chains, factories, and employee policies, too. In fact, the only thing they keep secret is revenue, but that’s just for competitive purposes.

In this episode, we visit Founder Michael Preysman at Everlane’s San Francisco headquarters. He talks about how higher price doesn’t always mean higher quality — and how the domino effect of being transparent is helping Everlane do the right thing and build a coveted clothing brand.

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Speaker 1:

Next on PJA radio's the Unconventionals.

Michael :

It was so necessary, because otherwise the $15 t-shirt, you'd be like, "Oh, that's a shitty t-shirt." We're like, "No, no, no, no. The system allows us to give you a $15 t-shirt that would normally be $50." We had no way of explaining it, so we're like, fuck it. Let's just put our cost in there.

Mike O'Toole:

This is Michael Preysman, the founder of Everlane, an online clothing retailer. Their design focus is modern basics. The company mission is radical transparency. Michael will introduce the company in a bit, but what he's talking about in that opening quote is quite extraordinary. Putting the cost in for the t-shirts, sweaters, and other clothes Everlane sells means exactly that. Go look up the men's t-shirt on Everlane.com and you'll see how it's laid out. The true cost between material, labor, and transport for that t-shirt is $6, which leaves for the industry relatively minuscule profit of $9. Laying this information out is a big deal. Think about it. Fashion works harder than just about any other industry to [inaudible 00:01:11] the relationship between what things cost and what you'll pay.

We talked to Michael Preysman at Everlane's headquarters in San Francisco's mission district. For me, maybe the most interesting thing about Everlane is how the notion of transparency has evolved. The decision to be transparent around pricing was the start, but one thing led to another and now the transparency includes supply chains, factories, employee policies. They'll tell you just about anything accept what their revenue is. An initial decision to lay bear cost and pricing became embedded as a core value. Call it the soul of the company.

Michael :

Everlane started, I guess on the simplest level it's a transparent fashion company, but what you could say behind that is that on a design level and retail level, people have no idea what they're buying. When you buy a shirt, say the shirt you're wearing today, you don't know how much it costs. You probably don't know where it's made. Although it'll have it on the label, but the label will be super obscure, made in China, made in Vietnam, made in Italy, but you don't know where. You buy these products, but you have no context them. We said, "That seems a little crazy because people have a huge desire to know where things come from, starting with the food they eat." Why can't we tell that same story around the things we make, but then take it one step further and not just tell a story of where are things are made? Then, how much they cost because the mark up is so crazy depending on where you buy, that we're just going to be totally transparent and keep the lowest mark up possible that we can give to the customer while still running a business.

First it started with transparency around cost, and then transparency around manufacturing. We said, "Let's tell people where the stuff is made and be very precise about it." Then if we're telling people where this stuff is made, then we better make sure the factories we're using are really ethical. It all trickles down into creating a system that has been more organic than it has been by design out of the gate, if that makes sense. It's so funny how this simple idea of transparency spirals into if you're going to be transparent about one thing, it just turns everything all the sudden becomes transparent and everything you have to do the right way.

Mike O'Toole:

It's transparency, but your mission is radical transparency, right?

Michael :

Sure.

Mike O'Toole:

What does the radical part mean?

Michael :

I think that's the part where you can say, "It's easy to say you're transparent, but when you go all the way down to the cost, the only thing I think we don't share with our customers, we don't share our revenue numbers day to day, because that's actually competitive." Do we really want our competitors to know how much we're making? Then other that we're very transparent about everything we do. If you were to ask us anything, we'd generally answer it, and if we don't have the answer we'll go find it.

Mike O'Toole:

Does that raise questions for people? You've got the math on your website, right?

Michael :

Yeah.

Mike O'Toole:

How much a t-shirt costs to make, and what you're ...

Michael :

What we're charging for it.

Mike O'Toole:

Yeah, that profit number is explicit. Do you ever get people say, "Why so much profit?" Or, "Why so low profit?"

Michael :

No, it's funny. I think people think so, but I think what people view instead is they're like hey it's a business. It's got to make profit. The honest truth is if they start to question what's the alternative? The alternative is the next person's making way more profit than us. We do have the lowest generally, markups for the quality that we're making, hands down. We've never had that, and maybe just people don't come to us and they look at it and they're like, "I don't want to pay this company that much." If you like the product and if someone's willing to be that transparent, you assume generally that they're being reasonable. I think that's the human nature, and that's what people definitely understand and buy into.

Mike O'Toole:

I imagine this kind of transparency, it isn't easy. It's got to be complicated, makes your life hard sometimes. Can you talk about how?

Michael :

For sure, pricing. A lot of companies price a lot higher so that they can ultimately mark down and have an exit strategy, because if you make too many blue dresses, all the sudden they're not selling, what do you do? We actually haven't figured out what to do with an exit strategy because we don't mark things up a ton. Then the question is do we put them on sale? We've never run a sale. This notion of hey, it costs us $5, we charge you $10. What happens when we've got 1,000 left over and they're not selling? Do we mark the price down, and what does that mean for transparency, and how do we tell that story? We've just not done it yet. There's probably five products that we have too much inventory of and we don't know what the answer is.

Mike O'Toole:

Let's go back to that $15 t-shirt, which was in fact Everlane's first product. Givenchy has a Bambi t-shirt that you can buy online at Barney's right now for $1,200. Slightly more down to earth, $120 will get you a plain white t-shirt from Kanye West's new clothing brand. This is how it works in fashion. Brand is about creating desire and mystique. For the most successful brands, people will pay almost anything to have that brand on their bodies. Branding plays an entirely different role for Everlane. It is about helping buyers to make a more informed choice. This requires change, introducing a different way to think about clothing.

We see this is the business to business marketing world all the time. If you're introducing say, a new customer relationship management software application, you have to educate buyers about why it's better, how it'll solve their problems, how it'll fit into their technology infrastructure, all kinds of things. This makes sense of a purchase that can be in the six figures and takes six months to decide. Not how it typically works for a $15 t-shirt.

Michael :

I think the moral piece of it is that people should have the right to know and then be able to make the decisions they want to make. Our view isn't that we're trying to be calling out other companies. It's that if we give you information, you just make the decision you want to make. Then that's fine. It's still a challenge to be honest, because I think we're so trained as individuals that higher price me higher quality, higher price means a better design, all of those things. A lot of times people will look at something and not totally believe that hey, our $15 t-shirt is the same as a $50 t-shirt.

That's a part that's really hard to retrain, and some you can retrain it, but otherwise, if I have a conversation with you I can change your perspective, but even me sometimes I'll see a product that's, say a luggage from a high end brand and a luggage from a low end brand. I've seen them both produced at the same factory, but your gut instinct is always oh, that's a high end brand. The thing costs $450. It must be better quality than a $200 one. Usually it's not.

Mike O'Toole:

Yeah, it's a central notion of what a brand should be that allows you command a premium price. It's funny because you're not going there at all with your brand. You're building a brand.

Michael :

Yeah, for sure.

Mike O'Toole:

It's not because you want to charge more.

Michael :

No.

Mike O'Toole:

What is the role of brand then for Everlane?

Michael :

Education. Education is a big piece of what we do, informing the customer, helping them understand [inaudible 00:07:57] cost and location. Then I think there's a lot of other things. If I put education as one in terms of business values, there's design, create really high quality, long lasting products. Trend less, but on point, if that makes sense. Specifically, how do you make something that's relevant, but not make it so that ... Make it so that it's relevant for the time, but can still be in your closet five years from now. There's a whole design aspect to what we do. Those are key pillars and what we think about. Then there's the whole, I would call this, what wraps both of those up is this doing the right thing, how do you think differently about the world? How do you question the way things work and create a better system? I think psycho graphically we definitely appeal to that kind of person.

Mike O'Toole:

The role of the brand, too is also to create desire. It's easy to remember. It's something that I want, and that seems like it's a little different than education and some of the other things you've been talking about.

Michael :

Yeah, for sure. That falls really a lot into the design world of things. We launch items. We create desire by telling really strong stories around those items. It can be education from a transparency perspective, but then there's a whole design and the desire and the launching in a really big way, building up wait lists. All of that stuff helps us better both understand the product, but also creates and emotion for the customer to get excited about something. People like stories. I think part of our job is to entertain, too. Part of it is education. Part of it, that whole design piece is entertainment.

Mike O'Toole:

What about that, it is not easy to create a consumer brand. I imagine there's people out there who said, "Don't do that."

Michael :

My own boss said it was a waste of time. He's like, "Of all the things you could be doing right now, this is where you choose to spend your time?" I was like, "I don't know. I guess I could make a list of all the things I could choose to spend my time on, but I don't know." I just think this goes back to our, you have to find what you're good at and what you care a lot about. Then where you can make a living. This was one of those where it's like you can spend a lot of time on it, you're obsessed with the idea, you love it, and as long as you're not delusional, usually you make something of that. I don't know. He said that, and then he ended up investing a couple years later. It worked out.

Mike O'Toole:

Michael grew up in the bay area. His parents were immigrants, very entrepreneurial. His father started his first tech company when Michael was five. Michael talked about this west coast mentality from his parents. From the tech business culture in San Francisco, he developed a sense of mission, which is about always asking if there's a better way to do things. For Everlane, this meant taking his cues as much from design and product businesses as from the fashion industry. What this is means is that Everlane is item driven, t-shirts, sweaters, shoes, not collection driven ... Say spring, holiday season, etc. Everything in the company is aligned around making those products as great and as evergreen as they can be. Most fashion companies are aligned to the collection cycle, launching, promoting new lines, then moving those out as they prepare for the next. This product versus collection focuses is radical in it's own way as pricing transparency. The two are deeply connected. You couldn't really do one without the other.

Michael :

Everything, and I'm trying to figure out the right way to explain this, because I haven't figured out a really simple way, but everything starts with the fact, because we don't do collections and we're product item driven, it means that the things we release and we don't release them anything. Call those two constraints, hey we're not collection driven so we release products, and we don't release too many products. That means every product has to be really, really good.

If you take the presumption that the products you create have to be really good, and you want to drive a lot of anticipation, customer demand per product, that means every single person and every single group at the company has to be aligned with the product. That means that design is talking to marketing, it's talking to creative, it's talking to engineering. If you're making a shoe, does that shoe look right on a site? Can we market it the right way? Does the customer really care? Does it look too similar to something else? Can creative tell the right story? Can design design it? Does it hit the right price point?

I think what often happens is because the financial goal is the number, you end up with one group creating the product, and then another group having to market it. I think really great companies are able to merge those across. That sounds like a pretty obvious thing, but it really just doesn't happen that often. The result of that is that you end up with much better product for the customer. You can tell better stories. You don't have to put as many things on sale. As a result, the price can be lower because you're selling through better. It's really weird the domino effect that happens.

I think more often than not, the domino effect of the opposite, which is if you don't make the right product everything falls apart. The marketing's hard, you end up charging more than you have to so you can spend more on marketing. You end up having to putting things on sale. You end up putting it in 30 different channels because you can't sell it through one channel in a big way. You've created this shitty mouse trap and you need to figure out now how do I sell as many shitty mouse traps as possible.

I would say at Everlane, if there's anything we do, it's this obsession with making the right product.

Mike O'Toole:

Yeah, so I get that, because you were talking about the distinction between design business and a fashion business. I get that as you talk about it now. Design is about product centered.

Michael :

Yeah, and I think most businesses that are not, that are money driven, they just ... If you don't have that intense focus on product, then everything becomes complicated after that.

Mike O'Toole:

Does it get you in a different cohort of other businesses and other entrepreneurs when you think this way? You've got this reason to run the business. It's not financially oriented. It's not your motivation. It's to create a great product.

Michael :

It's like people will be like, "That's bullshit. You're money oriented." I think the mission is a product, and financials are the measure of the success of that product. We want to impact as many people as possible, hands down. We want as many people as possible to be impacted by the mission of Everlane, the idea of the education in the product we create. We want to create something and then if what we're doing is really good, that means a lot of people are into it and interested, and then money comes from that. I would say the product is the means to the end. That's the way we think about it.

In terms of do we get put into a different class of entrepreneur people? For sure there are businesses that are a lot more mission driven. There are more of them today than there might have been 20 years ago, and the funny thing is probably there were a ton of them 100 years ago. I think as we started to scale the industrial revolution and you could market in a much bigger way, in the 60s they realized how powerful marketing is. People are like, "Holy shit, I could make a lot of money." Then now we're getting this return to Renaissance, or I don't know what you want to call it, but the reason you do what you do and these businesses that are more similar to the maybe values that we had 100 years ago of creating great product.

Mike O'Toole:

I love this last exchange. We tend to think we invented everything, but when it comes to this new generation of businesses that are focused on craft and quality, operate with transparency, care about [inaudible 00:15:28]. It turns out these are timeless values that are actually getting a new look. We heard almost exactly the same thing when we talked to Tony McGee at Lagunitas. His point was that the new craft beer landscape, dozen of local brands in any decent sized city, looks a whole lot like the beer industry did 100 years ago. Things have changed of course. Take online commerce, Everlane and companies like it have the means to scale it's distribution, find customers who like their product wherever they live, and take digital and social media. Customers have access to almost perfect information about Everlane if they choose to track it down, which fundamentally changes the role of marketing in advertising.

Michael :

Yeah, I think what happened, when I think about is we had all this [inaudible 00:16:12], a lot of small people doing things, and then advertising came about. It's really like advertising and distribution happened and then people believed the advertising for the first 20 years. Big businesses were created through distribution through advertising, and then now people are saying there's a group of people that are like, "Hey, I'm not sure I buy into this anymore." Then new businesses are sprouting out, back to basically figuring out how to do things the old way, but leveraging the distribution channels that exist.

Mike O'Toole:

When you describe advertising, and I run and ad agency, so it's interesting to me.

Michael :

I think advertising is amazing, but it can also, in both ways, great advertising is amazing and you can tell really great stories. Obviously advertising can manipulate pretty significantly.

Mike O'Toole:

That's like to me it does suggest that in this air that we're working in and living in now, what is the role of advertising is different, like you talked about stories earlier.

Michael :

Yeah.

Mike O'Toole:

Is it really just to get at what the core of a product or a company is about as opposed to create a layer that ...

Michael :

For sure. I think before, and yeah in the 60s, 70s, 80s, you could really put on ... The most classic form of it is the Marlboro man, and create this image of desire. Fashion companies still do it. You can still create. There's still always going to be that level of desire for a certain group, but I think the best advertising is taking the mission and the marketing, the mission and the values of the company and basically leveraging billboard space to tell that story in a bigger way. That's why I hate the word marketing, and I've used ... It's like, our head of design or head of product design and I explain this. I'm like, I hate marketing because people view marketing in a negative way. In our world, marketing's job is to represent the customer.

Does the customer care that this cashmere versus wool? If they do, then great, and we got to tell that story. That's marketing's job is to always look out for the customer's interest and values.

Mike O'Toole:

You also want to change those to a degree, too. It seems like there's a little bit of education. You talked about it earlier.

Michael :

Oh, for sure. That's where marketing's job also is man, if people understood it, they would care. There's part of it is, do they care, or can we make them care? For sure a lot of it is educating customers and helping them understand that this is better and why they should care about this.

Mike O'Toole:

Coming up, we'll continue our conversation with Michael Preysman, founder and CEO of Everlane. We'll talk about customer expectations. In this age when consumers are in charge like never before, how do you get them to think differently about buying a t-shirt and a pair of pants? We'll also talk about mission. What does it mean for a company to have a soul?

Speaker 1:

You're listening to PJA radio's the Unconventionals. To learn about the show and join in on the conversation, check out our Facebook page, Facebook.com/unconventionalsradio. Our academic sponsor is a center on global brand leadership at Columbia business school, which turns the research of academia's foremost thinkers on branding into practical tools and insight for real world applications. To learn more visit globalbrands.org.

Mike O'Toole:

Consumers are a pain in the ass these days. We are collectively a choosy, impatient, unfair, and fickle lot. We have these extraordinary experience. I think just about anything you can do with your iPhone, or how easy Uber makes it to get around. We applied those expectations to every transaction we enter into. It has to be perfect. I want it exactly how I wanted, and I want it now. Meeting expectations, let alone changing these expectations isn't easy. Can you shape customer expectations so it's not just now and great, but also sourcing and [inaudible 00:20:10]. How [inaudible 00:20:11] is that?

Michael :

I think that's a really long journey. I think yes, but I think it's a really long journey. The organic food movement took 20 to 30 years and call it 15 to 20 years. That was about stuff we put into our body. Getting people to care. I think getting people to care about where their clothes made is by telling the stories of the people and showing the inside of these factories, because then you can have a human connection with the individual. Yeah, I think you can, but it's not easy, and the end of the day, people are self interested. That's a bad way of saying it, but it's also a good way. It's what makes capitalism. It's what makes us progress, want to achieve things. People are always looking out a bit for themselves and a little bit for others. It's a challenge. It's a push and pull.

Mike O'Toole:

Is that true for your customers, too? You don't sell to the entire world. You sell to certain ...

Michael :

It's true for everybody. It's true for you.

Mike O'Toole:

Yeah.

Michael :

It's the [crosstalk 00:21:07].

Mike O'Toole:

No, I get it. You're never going to do that stuff. You're not going to buy a shitty pair of pants if you feel like it's made humanely.

Michael :

Or if it costs three times more. There's this balance, and I think Whole Foods has done a really good job of it, of both catering to people's daily needs that they need as well as finding great sources and maybe creating this balance of when you go to the store, hey there's some really local artisanal stuff, and then there's some well made, well respected makers of things you need in your day to day life. Or, here's two to three different options of what you can choose from. I think Everlane has a huge advantage in that we have a much ... We're not collection driven so we don't have to play this whole sale game. It allows us to not mark up as much, which allows us to use higher quality materials, and better factories. It's weird how everything ties together at Everlane to both offer you a good price, but also offer you a good factory.

Mike O'Toole:

All that makes sense, and I think probably people would, when you were starting Everlane, would say, "That's just a smart way of doing business." Some of the stuff like putting how much profit you make on your website, that probably was crazy.

Michael :

It was so necessary, because otherwise the $15 t-shirt you'd be like, "Oh, that's a shitty t-shirt." We're like, "No, no, no. The system allows us to give you a $15 t-shirt that would normally be $50," and how do we actually explain that to you? We had no way of explaining it, so we're like fuck it, let's just put our cost in there, and then that's going to be the explanation.

Mike O'Toole:

That made sense, but you must have had conversations with people.

Michael :

Oh sure.

Mike O'Toole:

Do you have any ...

Michael :

It was like three years ago that those conversations happened.

Mike O'Toole:

That's all right. Those are good stories though.

Michael :

It started with an info graphic, and the info graphic we put up was just around the t-shirt, and then I think there was a blog post of a bunch of small fashion brands that make different products more locally that ripped into our whole info graphic and were like, "This is stupid," blah blah blah. "People didn't know, or how do you know this factory is good?" They started questioning our pricing, and then we said, "Okay, fine, you want to question our pricing? Here's our factory, too." Hands off, your choice. That's how that evolution happened, because we don't trust your pricing because your factory must be shitty. We didn't do it at first with everything. We did it maybe every other product. Then people were just like, there was honestly really huge reception to it, so we're like okay, we'll just do it on everything. What's the harm? Then boom. That happened.

Mike O'Toole:

We've talked to companies on the show, Big Ass Fans, and Evernote come to mind, that think in terms of 100 years, not the next quarter. If you're building a consumer brand, it doesn't happen overnight. You have to think about the arc overtime. How does your product mix change? How does your mission adapt and grow?

Michael :

Everlane has I think got such a clear set of values that are universal and we've done so little. We have some t-shirts, some shirts, bottoms, some shoes, but really only four styles of shoes that you can imagine Everlane doing a lot of things, and it's up to decide what we do. You can imagine at the most basic level, Everlane furniture. You're like, "Oh, I get what that would be." It would be transparent. It would be made in an ethical factory. It would be minimalist design, and it would be probably very thoughtfully designed, and very easy to sit on and fit in a lot of things, but it wouldn't be ostentatious in any way. There's these core principles that you're like, "Oh, I get it." I know what that would be.

Mike O'Toole:

Yeah, so where does that take you? Furniture's one.

Michael :

Furniture probably not. It's so expensive to ship online and all these other problems that we're not probably going to do it. 30 years from now? I don't know.

Mike O'Toole:

40 years is a long horizon and what else does it make you think of when you've got ...

Michael :

The thing that's really cool when you think on that horizon, because most of the time, and this is the advantage of if you get management that's long term, is that you don't have to rush anything because what happens when somebody comes in is they want to do everything as fast as possible, because they get bored. If you think about things in a really long term horizon, all the sudden you're like okay, why do I need to do this yet? Why can't I just make more out of the things I have today?

Mike O'Toole:

I saw an interview Michael Preysman had done recently. The interviewer was asking about knockoffs. Everlane has seen companies pop up in other countries that are almost exact ripoffs. Michael said he wasn't worried about those companies, because they don't have a soul. Now you don't put soul and business together that often. It captured for me what makes a lot of unconventional companies different. They aren't different because of a one off product idea, or a marketing campaign, or some innovation, they're different is much more comprehensive and deeper seeded. We talked about the soul of Everlane, how it borrows from it's location and San Francisco, and how a soul, if you really have one, takes a lot of pressure off the traditional need to market.

Michael :

I don't know. There's certain, and I think soul, values, same thing to me. It's this idea does the business serve the values or is it just the business to make money? That's where we have a set of values that are really strong and there are very large companies that I think have a very strong set of values, and then there are some that I think ... Actually, I don't even know how many super large companies there are. Some are just riding a product that's existed for a long time. I think having a very strong set of values allows you to make decisions over and over again that tie back to those values. I think a lot of those companies, when you copy someone, it's just really hard. When you have a set of values, it's like you know how to play the game or the next chess move. When you don't, you're just like oh, I'm going to copy you. Then you're like okay, what do I do next? I think being a copycat is just really, really hard. You don't know your next move.

Mike O'Toole:

What are the values or soul? How does it get substantiated in the people side of the business, or does it?

Michael :

If you hire the right people that embody, that have the same values, then ultimately they make the right decisions for the business. Obviously we have a set of values we communicate to people, the kinds of people we try to hire, but having those right people ultimately is the best outcome. We've definitely had people in here who are maybe more interested in their own career, more interested in their side of the business, and that creates very short term thinking. Even on a vesting schedule, when you talk about people coming in here and thinking about equity and having equity in the business, we vest on five years. We used to do it on four. If I could do it, I would do it on 10, because to me it's like hey, the longer term you are here, the better [crosstalk 00:27:55].

Mike O'Toole:

Important to your company, right?

Michael :

Yeah. Look, everyone's not going to be here. We'll see if I make it 40 years, but I don't have anything better to do. It's pretty fun. I'll take it.

Mike O'Toole:

What does it say about your company that you are here in San Francisco? Certainly designed in San Francisco, not so much fashion. There's some, but ...

Michael :

We run the fashion, actually or the design of the product in New York and we run everything else here. I think it's very much, we ran a campaign to recruit and we do a lot of things like this that are maybe unconventional or they make sense to us. People who want to work here often are customers, so we email their entire customer base and say, "Come work here, and here are the jobs you can apply to." We get a ton of people that apply. We get, we hire maybe one person every two weeks, and we get 300 applicants every two weeks. It's a lot of people that come and apply, and we just don't hire that much.

We had this campaign and it was geared towards New Yorkers and you opened it up and it'd say go west. I think that embodiment of go west is very much what it means to be in San Francisco, or I just think the west coast, which is hey, you came from New York or you came from the east coast and go west. Think differently. Cross the mountains. See what's over on the other side. I think that's very much our spirit. For sure there's a lot of history of that on the west coast from the beat mix to the punk movement in Seattle. There's just so much resonance of thinking differently from a cultural perspective.

Not to say it's not in New York, but I think New York much more represented it in maybe the early 1900s up to the 60s and then less so later.

Mike O'Toole:

One I think benefit possibly from having an explicit set of values is that you don't have to do as much marketing. Marketing you said is a bad word for you. Do you find that there's something, that core idea that business is interesting and exciting enough for people that they'll ...

Michael :

For sure. They tell the story for us. The brand today is probably 80% organic, when I say we've done barely any advertising. We'll start to do it, but even when we think about advertising we want it to feel very much organic or part of your daily life. Not some crazy commercial, but much more of a story or part of something that you pass through everyday and it makes sense to where you are. We're pretty limited even as we think about that. We spend very little on traditional marketing.

Mike O'Toole:

Yeah, that makes sense. The Everlane story is so resonate in part because we've all become a whole lot more aware of how appallingly bad the fashion supply chain can be. Child workers, dangerous and deadly working conditions, shoddy products. Lots of people are telling these stories, maybe none quite as effectively as John Oliver on a recent episode of Last Week Tonight.

Speaker 4:

In fact, there has been a patent of troubling behavior in the garment industry for the past 20 years. Just look at Gap, the nation's number one supplier of polo shirts for fat guys to vomit on. Back in the 90s, they were criticized for labor abuses at the factory making their clothes in El Salvador. In response they agreed to start an independent monitoring program, which sounded pretty good to everyone. Besides, they had that fun ad where idiots in ill fitting khakis swing dance, so we forgot all about it until five years later when the BBC visited a factory making Gap clothing in Cambodia.

Speaker 5:

We've been told they're worse. Some children here making clothes for the Gap. This is [inaudible 00:31:34]. She's 12 years old.

Speaker 4:

In response, Gap revoked approval of that factory and enhanced their age verification requirements, which sounded pretty good. Besides, it was the year 2000 and they had that ad campaign where passed out morons did the mambo. We forgot all about it again, until seven years after that when a British newspaper visited a workshop in India.

Speaker 6:

According to a published report, these children age 10 to 13 were working as virtual slaves, stitching embroidered shirts for Gap Kids.

Speaker 4:

Okay, stop. Having children make clothes for Gap is bad enough. Having them make clothes for Gap Kids is somehow worse. In response, Gap said it didn't know it's clothes were in that workshop and demanded it's supplier make significant improvements to it's oversight of subcontractors. Everyone felt better, especially because it was 2007, and Gap had just had that mind blowingly cool holiday in your hood campaign with Common.

Speaker 7:

Fell in to the Gap they rockin' the hood. Seen peace in the streets when I stopped in the hood. We going to keep it alive like hip hop in the hood.

Speaker 4:

Then in 2010, a fire broke out a factory in Bangladesh that produced Gap clothing killing 29 workers. After that, Gap launched a building and fire safety plan, which was great because it meant nothing alarming concerning Gap's presence in Bangladesh was ever going to happen again, until 2013 when Al Jazeera found this:

Speaker 8:

There's no fire extinguisher, no fire exit. It's just a shack in someone's backyard.

Speaker 4:

I guess at this point it seems sweatshops aren't one of those 90s problems we got rid of like Donnie Wahlberg, but more like one of those 90s problems we're still very much dealing with, like Mark Wahlberg.

Mike O'Toole:

Where does Everlane see itself in this larger conversation? Transparency has come a lot farther in the food industry, and we are relatively early days in fashion, in part because the industry has such a vested interest in keeping information on how clothing is produced, how much it costs behind the [inaudible 00:33:44]. We as consumers haven't really demanded this information for the clothing we buy, and it has been our desire for transparency in better food. That has been the biggest factor in changing industries like fast food.

Michael :

I think it's challenging because for sure people associate us with that ethical movement and as more and more of that happens, they're like, "Oh, Everlane is leading the way." I think we're going to push the boundaries in that a lot more. The question ultimately is how much do people care? I think people are starting to care more, but even beyond that, the issue is that nobody even tells you. What happens is oh, let's say that Bangladesh thing happened where [inaudible 00:34:25] Plaza and 1,200 die or ... I think it was 2013, in April. You still don't know what companies are producing where. It's hard because you don't know, you can't even penalize a company for it. You barely know who is producing at [inaudible 00:34:41].

The trick with this is that people can come to Everlane and be like, "Cool. I know where my stuff comes from." Then every other alternative, you still don't know. Obviously we're not asking people not to not buy any other clothes, and the question is how will the world evolve in a way that maybe people will start asking that question? I don't think companies have any interest in giving that answer. That's the challenging part.

Mike O'Toole:

Yeah, and it's hard to make that a criteria for purchase now to your point, because you don't really know.

Michael :

I think Whole Foods is big enough that Whole Foods and a few other places where you can buy, you can actually start to make that decision and effect a large enough amount of your purchase. Maybe as Everlane gets bigger in terms of product selection, you'll be like, "Oh, I can get most of my things here. That's cool." Right now we're just not that.

Mike O'Toole:

This is Mike O'Toole and this has been the Unconventionals. Thanks for listening, and thanks to Everlane for hosting us in San Francisco. Join us next time. We'll be talking to Rethink Robotics, a company that has put a new face, literally on industrial robots.

Speaker 1:

The Unconventionals is written and produced by Mike O'Toole and [inaudible 00:36:06]. Post production and technical direction by [inaudible 00:36:09]. Promotion and distribution by Greg [inaudible 00:36:11] and Graham Spector. Additional media by Anthony [inaudible 00:36:15] and Ryan Doe. Our executive director is Phil Johnson for PJA advertising and marketing. I'm [inaudible 00:36:21]. To listen to more episodes of the Unconventionals, visit agencyPJA.com/theunconventionals.