September 28, 2006, 12:00 AM

Building a multi-channel niche on a shoestring budget

Bill Bass, a former senior executive at Lands` End and Sears, has launched Fair Indigo, a multi-channel retailer of fair-trade apparel. Bass and company are using in-house technical expertise to build a niche for a fair-trade site that sells only products made by workers paid a livable wage and treated fairly.

Launching a new e-commerce site with cutting-edge merchandising is not easy. Neither is starting a retail business built around a social cause like fair-trade standards, which assure fair wages for the workers who make the merchant’s products. The first endeavor requires a ton of capital, while the second can be hard-pressed to find a critical mass of customers.

Besides, do consumers really care enough about fair labor practices to buy from a retailer that promises its products are produced under such standards? Bill Bass and his former Lands’ End colleagues are betting they will. And they’re relying on a heavy dose of online retailing expertise to make it happen.

Bass, a former senior executive of e-commerce at Lands’ End and Sears, Roebuck & Co., and his co-investors in the Black Wolf Group holding company last month launched Fair Indigo, a “fair-trade” multi-channel retailer of apparel, footwear, jewelry and accessories. The new merchant is starting out with some 800 SKUs amid just under 100 categories-all of them produced by manufacturers that follow fair-trade policies, says Bass, Fair Indigo’s CEO.

“Fair trade is in its infancy, and we’re the first mainstream apparel retailer to do fair trade,” he says.

‘Cashmere with a conscience’
A June 2006 consumer survey Fair Indigo conducted with Greenfield Online Inc. found that 86% of respondents said they care whether their clothing was made by workers treated fairly. But many consumers also were unaware of where to purchase fair-trade apparel products.

Bass and his partners started Fair Indigo with a single store in Madison, Wis., near their headquarters, but soon realized they needed a multi-channel presence anchored by a retail web site that could reach and engage a broad audience as well as identify the strongest areas of demand.

Using its own in-house resources, including a staff of 20, the company launched FairIndigo.com last month with high-end graphics and functions, including a feature that automatically zooms into a product’s details as a shopper mouses over it-a crucial tool for selling intricate apparel patterns online, Bass says. Among other features, the site is displaying consumer-generated product reviews from Bazaarvoice to promote the passion consumers have for fair-trade products, he adds.

By building FairIndigo.com with open source software at about a tenth the cost of a comparable commercial platform, Bass figures the new company will be better able to maintain moderate retail prices while paying its suppliers enough to support fair-trade conditions. Typical women’s wear prices on FairIndigo.com include $59 for jeans and $129 for a “cashmere with a conscience” crew neck sweater.

The site also will support the future development of stores by identifying the geographic location of customers, he adds.

There currently are no official certifications of fair-trade practices for apparel, because its numerous production steps make it difficult to certify, Bass says. Instead, Fair Indigo is working with a team of experts at the University of Wisconsin in Madison to produce economic reports that the retailer can use to compare the wages paid by its suppliers with an acceptable living wage in each of its sourcing markets, Bass says.

To further promote the fair-trade industry, Fair Indigo will share information with shoppers on other fair-trade retail outlets. A pop-window appears during the ordering process on FairIndigo.com, asking shoppers if they’d like to recommend other fair-trade merchants. Fair Indigo will post the list on its site, Bass says. “We’re creating demand for a new market,” he says. “If we can make it convenient to shop in this market, people will buy.”

 

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