Definitely food for thought! I'm a big fan of Sense and actually find their customer service excellent, but I'm going to make an effort seek out smaller boutiques.
I fucking hate Ssense. I have bought great stuff there.. small brands.. mostly menswear.. but have had some HORRIBLE “customer service” aka none sagas w them including missing items & months of repeatedly “documenting” the absence of said (stolen) item / incorrect items etc..
May God grant me the serenity to never buy another thing from them ...
I saved this one for a while so I could properly digest it and it did NOT disappoint.
That last line: whoa. While I'm not trying to play devil's advocate, often the difference for me shopping independent IRL versus massive retailer online is the experience itself, and the fact that in 2023, getting information from a brand about who carries their stuff is sometimes akin to getting blood from a stone (someone who works for a brand, please explain this to me).
Great read, especially the ending. It informs a lot of my ssense spending which is usually on stuff I already know about or have seen in better context (tabis, camions) whenever I explore on ssense I get this feeling after a bit like none of it matters or is interesting at all
My fave Spyplane read so far. Thx for the investigative reporting and providing us with the low down on ssense. Sequoia investment says it all, this is a profit machine at all costs - human, creative, ecological, etc.
I think the dirty secret that anyone with industry experience will tell you is that for most brands, markups are OBSCENE if consumers are buying stuff at MSRP. Materials, labor, and logistics are a fraction of the sticker price, and the rest is going to various "intangibles" along the way.
As someone who lives in a smaller market without a lot of exciting local retailers, something like SSENSE is sort of a blessing; I can access quality, interesting jawns in a convenient way. While it feels cool to support independent retailers, besides a handwritten note and a fuzzy feeling it doesn't really add much value when all I'm doing is opening up a cardboard box a delivery service dropped off.
Maybe we need to see a bit of a different buying and selling culture, looking to a place like Japan for inspiration. You know that if someone is stocking Kapital they're going to be a top-tier joint with excellent, knowledgeable staff presenting it well, and that they'll be keeping the line around for a while. Could this be on the side of brands to limit where they're selling, and buyers to make a multi-season commitment, even if that first one gets marked down?
This part: “ Materials, labor, and logistics are a fraction of the sticker price” is not true for so many small brands.
I know this industry down to the fiber costs and sure, there are plenty of high-margin luxury brands in the mix for ssense, but when you are talking about small brands that are making 10,50,100 pcs per cut, there’s very little margin to fuck with. Good textiles are $ these days. Weaving or knitting, expensive. Labor costs including logistics and store staff, also expensive (unless you don’t pay your staff a living wage)…
There’s also the relationship aspect - my clients know my team well, and it goes both ways when it comes to getting that hard to find item or doing a special pickup in Japan or even just something as simple as a discreet heads up when the big box comes in from DHL before it’s on the website.
However if you don’t want a relationship with your retailers, you don’t want the context, and you just want the object then ssense is your spot (or whoever’s got the 30% off code this week).
Great report King. I feel like (at least publicly) they only, just a few years ago, got outside investment from Sequoia. That would mean they must have been running the business sustainably for all the years prior. That's not blitzscaling. I understand how they are harming the market but I wouldn't yet call them an Amazon because i don't know that they're trying to become a monopoly or have an outsized market share.
Obtaining outside investment from a VC in no way means their business was sustainable at the time of securing said investment. VC money was flowing like water through 2021 and pitch decks with hockey stick growth charts were all that was needed to scoop up some of the $$. The Ssence investment came towards the tail end of that era where companies seeking venture funds were rewarded for hypergrowth above all else - Sequoia's long-term backing of Klarna is a perfect example of this paradigm.
As a result of the 2022 downturn Venture firms, as well as public markets, have shifted their focus from hypergrowth to profitability/economic sustainability, but the damage done by the era of blitzscaling is still very much felt.
At ~$1bn in revenue Ssence is a small fish in the bigger pond of ecommerce but we should really be comparing them to the niche they attempt to serve, i.e. the “cool clothes” ecosystem. In a niche corner of the broader Fashion industry Ssence is very much exerting outsized influence on the smaller retailers they otherwise compete with - not a classic case of antitrust that would raise any regulatory eyebrows, but still big trash imo...tl:dr Ssence is A$$.
I am “adopting” the phrase “pitch decks w hockey stick growth charts” as I attempt to explain to random people “what happened to oncology start ups” & answer the question “was cancer cured?”
Most of their growth came after 2010, really after 2013. They likely shifted their strategy to growth hacking/blitzscaling mode and operate at a loss for ~8 years before taking on outside capital.
Definitely food for thought! I'm a big fan of Sense and actually find their customer service excellent, but I'm going to make an effort seek out smaller boutiques.
I fucking hate Ssense. I have bought great stuff there.. small brands.. mostly menswear.. but have had some HORRIBLE “customer service” aka none sagas w them including missing items & months of repeatedly “documenting” the absence of said (stolen) item / incorrect items etc..
May God grant me the serenity to never buy another thing from them ...
This is high-quality stuff appreciate the work you guys do!
Is basic space a solution
I saved this one for a while so I could properly digest it and it did NOT disappoint.
That last line: whoa. While I'm not trying to play devil's advocate, often the difference for me shopping independent IRL versus massive retailer online is the experience itself, and the fact that in 2023, getting information from a brand about who carries their stuff is sometimes akin to getting blood from a stone (someone who works for a brand, please explain this to me).
Great article. All this activity needs to be exposed by these posers
Great read, especially the ending. It informs a lot of my ssense spending which is usually on stuff I already know about or have seen in better context (tabis, camions) whenever I explore on ssense I get this feeling after a bit like none of it matters or is interesting at all
Agree, solid sletter! Eye and Jaw Dropping content! Salute to you- take the week of hahaha. Well deserved IMO.
10/10
My fave Spyplane read so far. Thx for the investigative reporting and providing us with the low down on ssense. Sequoia investment says it all, this is a profit machine at all costs - human, creative, ecological, etc.
Great Sletter as always, thanks for going into so much detail this was very eye opening!
I think the dirty secret that anyone with industry experience will tell you is that for most brands, markups are OBSCENE if consumers are buying stuff at MSRP. Materials, labor, and logistics are a fraction of the sticker price, and the rest is going to various "intangibles" along the way.
As someone who lives in a smaller market without a lot of exciting local retailers, something like SSENSE is sort of a blessing; I can access quality, interesting jawns in a convenient way. While it feels cool to support independent retailers, besides a handwritten note and a fuzzy feeling it doesn't really add much value when all I'm doing is opening up a cardboard box a delivery service dropped off.
Maybe we need to see a bit of a different buying and selling culture, looking to a place like Japan for inspiration. You know that if someone is stocking Kapital they're going to be a top-tier joint with excellent, knowledgeable staff presenting it well, and that they'll be keeping the line around for a while. Could this be on the side of brands to limit where they're selling, and buyers to make a multi-season commitment, even if that first one gets marked down?
This part: “ Materials, labor, and logistics are a fraction of the sticker price” is not true for so many small brands.
I know this industry down to the fiber costs and sure, there are plenty of high-margin luxury brands in the mix for ssense, but when you are talking about small brands that are making 10,50,100 pcs per cut, there’s very little margin to fuck with. Good textiles are $ these days. Weaving or knitting, expensive. Labor costs including logistics and store staff, also expensive (unless you don’t pay your staff a living wage)…
There’s also the relationship aspect - my clients know my team well, and it goes both ways when it comes to getting that hard to find item or doing a special pickup in Japan or even just something as simple as a discreet heads up when the big box comes in from DHL before it’s on the website.
However if you don’t want a relationship with your retailers, you don’t want the context, and you just want the object then ssense is your spot (or whoever’s got the 30% off code this week).
"Making cents from nonSsense" sounds like a dope guide BBSP will be putting out very soon.
Great report King. I feel like (at least publicly) they only, just a few years ago, got outside investment from Sequoia. That would mean they must have been running the business sustainably for all the years prior. That's not blitzscaling. I understand how they are harming the market but I wouldn't yet call them an Amazon because i don't know that they're trying to become a monopoly or have an outsized market share.
Obtaining outside investment from a VC in no way means their business was sustainable at the time of securing said investment. VC money was flowing like water through 2021 and pitch decks with hockey stick growth charts were all that was needed to scoop up some of the $$. The Ssence investment came towards the tail end of that era where companies seeking venture funds were rewarded for hypergrowth above all else - Sequoia's long-term backing of Klarna is a perfect example of this paradigm.
As a result of the 2022 downturn Venture firms, as well as public markets, have shifted their focus from hypergrowth to profitability/economic sustainability, but the damage done by the era of blitzscaling is still very much felt.
At ~$1bn in revenue Ssence is a small fish in the bigger pond of ecommerce but we should really be comparing them to the niche they attempt to serve, i.e. the “cool clothes” ecosystem. In a niche corner of the broader Fashion industry Ssence is very much exerting outsized influence on the smaller retailers they otherwise compete with - not a classic case of antitrust that would raise any regulatory eyebrows, but still big trash imo...tl:dr Ssence is A$$.
I am “adopting” the phrase “pitch decks w hockey stick growth charts” as I attempt to explain to random people “what happened to oncology start ups” & answer the question “was cancer cured?”
Omg the decks
Fair but it's highly unlikely they were operating at a loss for close to 20 years. Seems impossible.
Most of their growth came after 2010, really after 2013. They likely shifted their strategy to growth hacking/blitzscaling mode and operate at a loss for ~8 years before taking on outside capital.
Sweetu over everything
And just how do you pronounce their website? Is it like Essence or just sssssssence?
I always assumed it was like a snake was pronouncing it. I never thought to think of it as "Es-Sense" and now I can't unhear it.