In February this year, the world of surprisingly affordable cashmere was rocked by a scandal.
In a series of TikTok posts, cashmere brand Naadam slammed Quince, a rival that sells generic staples like sweaters and button-downs, for social media ads that claim Quince’s $50 sweaters are of the same or better quality than Naadam’s $100 sweaters.
“We saw a brand called Quince using our name in their marketing. I don’t know if it’s illegal, but I do know it’s weird,” Matt Scanlan, co-founder and CEO of Nadam, told Glossy in February. “It’s certainly crossing the line.”
Competitors may not like Quince’s flashy marketing strategy, but it appears to be working: By 2023, the 5-year-old startup’s annual sales will triple to about $300 million, according to people familiar with the matter. This year, the company aims to triple sales again, this time to $1 billion, they said.
While the company’s social media advertising is widespread, Quince’s success is largely due to the fact that it is one of the few retail startups that still attracts middle-class shoppers at a time when many of the most successful retailers are focused on catering to the top 1% and offering ultra-low prices.
Brands like Quince and Italic, which also sell unbranded basics at more affordable prices, take a fast-fashion approach by mimicking luxury aesthetics but promising customers quality they can’t find at Shein or Temu. That promise comes with a higher price tag, but it still feels like a bargain to some shoppers, including those who can no longer afford the real thing. Italic, which launched in 2018, sells $170 Mongolian cashmere sweaters made in the same factory that produces similar clothes for Brunello Cucinelli that cost more than $2,000. As luxury brands raise prices to attract more affluent consumers, more shoppers are looking for knockoffs without the stigma that often comes with buying something on Shein.
Critics say the upstarts lack a distinctive aesthetic and rely on advertising sprees to attract customers. The durability of the fake-brand trend is also up for debate: Once consumers are more financially stable, they may be willing to pay for the real thing again. Still, brands struggling to compete with fast fashion can take lessons from how Quince and Italic insist that their brands are valuable, whatever their form.
“How big can a brand get without a clearly defined brand identity? Conventional thinking says that a strong brand identity and strong storytelling are super important,” says James Nord, founder and CEO of influencer marketing agency Fohr. “But the world is changing so quickly that this may no longer be the case. Maybe you don’t need to tell a brand story; you just need to define your value proposition and deliver on that.”
Revising an old playbook
There is nothing particularly innovative about Quince’s marketing. Brands have always tried to gain an edge by claiming superior quality, lower prices, or both. Copying products from famous brands is also nothing new.
Quince and Italic take this formula a step further by building their brands on the pitch “same but cheaper.” Both companies sell upscale basics made in the same factories as their more premium rivals. Quince scrapes the websites of other brands, including Aritzia and Everlane, to identify and replicate their most-viewed and most-purchased products, according to a person familiar with the matter.
“I believe people are getting a great product. [and] “They know they don’t have to spend a ton of money to do it,” said Vic Drabicky, founder of media agency and consultancy January Digital.
Quality aside, Quince’s growth likely wouldn’t have been possible without heavy spending on social media ads, industry insiders say. Quince has raised more than $100 million from serial e-commerce investors, including GGV Capital and Insight Partners, who provide funds to brands to pursue growth through paid advertising.
“Quince’s real superpower is performance marketing,” said Brian Sugar, founder and managing partner at Sugar Capital, which has invested in Everlane, Olive & June and Savage x Fenty. “I think they could leverage that superpower into other categories if they wanted to.”
But today’s startups can’t just bombard consumers with social media ads to boost sales without clearly communicating the value of their products. The “same factory, better price” concept can set high expectations for consumers. Product reviews on forums like Reddit are decidedly mixed about whether Quince’s materials are as good as they claim.
Mid-priced brands have lower margins, less room to invest in brand marketing, and tend to see little impact on sales in the short term, so it’s a big gamble to get consumers to return, Drabikki said. If customers buy a product and like it, they’re more likely to spread the word about the brand to others, who will click on the ad. According to data from influencer marketing platform CreatorIQ, Quince’s earned media value, a measure of social media buzz, rose more than 300% from June 2023 to May 2024. This is because more social media creators talked about the brand in unsponsored posts.
“Do people like it? [price] “Whether or not you make a comparison, what it does is frame the conversation with the consumer,” Drabicky added.
Make it last
Brands underpinned by tough economic times are at risk of losing their lasting success if they can’t retain customers long-term, and to do that, it’s not enough to just offer a good price.
Customer retention is one of Italic’s biggest priorities. The company operates on a monthly subscription model, where customers pay $60 a year for access to exclusive offers, discounts, free shipping and other perks. Italic now has more than 10,000 members, and on average, more than 50% of its sales come from repeat customers, Italic founder and CEO Jeremy Cai told The Business of Fashion in June.
Italic’s wide range of product categories also helps retain customers. In addition to sweaters, the company sells home goods ranging from $40 satin pillowcases to $120 chef’s knives, which now account for 60% of total sales, said Avi Arora, Italic’s head of growth and marketing. The strength of categories outside of its core products is a sign that consumers trust the brand, said Drabicky. Italic expects its net profit and sales to finish the year up 50%.
“It’s our responsibility to provide our customers with both an experience and a product that is unique, that they can truly relate to and feel attached to, and then use that to build our brand,” Arora said.
Big-name brands are finding ways to sell their value to price-conscious customers without relying on copycats from other brands. Mall mainstay Abercrombie & Fitch, for example, has shed its image of exclusivity to become a place for trendy style at affordable prices. The company said in May that it expects full-year sales to reach $4.7 billion, up 10% from a year ago, compared with a 6% increase it had previously expected.
But the success of companies like Quince and Italic shows that today’s startups still have the ability to disrupt markets, if they can convince consumers why they should choose them over a competitor.
“A lot of consumer brands have gotten a little lazy and stopped really thinking about their customers,” said Forre’s Nord. “This is a catalyst for them to rethink how they tell their story, the types of products they make and their pricing strategies.”
