Nomo Interview with CEO Mari Silvennoinen & COO,
Co-Founder Jussi Mononen
Mari: Yes, it’s pretty hectic here as you can see - let’s
start! Jussi over there is responsible for our marketing, he could join us as
well… *Smalltalk*
Jussi: Here’s my business card – with that you can get 25%
discount from our jeans, so please be encouraged!
Harri: A lot has happened in the past year, what have been
the highlights and the toughest moments?
Mari: The year has been extremely busy and obviously the
greatest highlight was the opening of our first store here in Helsinki. We have
put a lot of effort in that. Another great moment was the opening of our first
international store in Hamburg Germany. So tough moments along the way that
those are the two most remarkable moments of the year.
Harri: You had some delivery problems during last summer
and/or early autumn?
Mari: Yes, we had some delivery problems in the beginning,
the production start didn’t go exactly as planned. We worked A LOT to smooth
out the initial production launch issues. Now, against all odds (or what most
people in the industry thought), we have managed to pull our production in
China into really good shape and well.. uumh..
Harri: Do you still have production in Estonia and Finland
then?
Mari: Yes, we do still have production in Estonia and we’ve
been practicing in Finland as well but there is really a lot to do. The current
situation is so that Chinese manufacturing works the best, Estonian needs some
adjustments, Finnish would need the most work. From production point-of-view,
we have managed to solve all of our major challenges. Naturally there is always
something to improve on, but the quality that we get from our Chinese
manufacturer is really good. After opening our sales last summer, we have received
only one single complaint related to sewing quality – out of approx. 700 pairs
of jeans delivered.
Harri: On general level, do you get a lot of complaints?
Mari: Yes, we do have some complaints that have come in for
other reasons (than sewing quality). It is understandably inevitable to get
some level of complaints in the beginning when we are still in developing stage
of our so-called Zero Fitting Pipeline. It is very novel approach in the
tailor-made clothing business. But that is, when we get all the pieces work
together, such a competitive advantage that there are no competitors who could
do the same quickly.
Harri: I’ve read blog posts and articles about you; the
terms seemed to me a bit unclear, there were used mass customization and mass tailoring,
what is it that you do?
Mari: It is mass tailoring that we do.
Harri: How do you define mass tailoring?
Mari: The idea is that the product is modular, so the
customer cannot define everything. It is not tailoring per se, but the
production process is based on defined formulas, on which the customer can tune
to their own taste. That leads also to the fact that we are not able to serve
all customers, for an example above or below certain waste line measures,
because the formulas and parameters don’t work with very very small or very big
people. We can serve the vast majority when we look at the Gaussian
distribution. If the customer could choose anything or that we would choose to
serve every single customer, the process would be entirely tailoring.
Harri: ..and that would increase the options and parameters
exponentially, I presume?
Mari: Yes, definitely. And even with our only few strategic
choices made to limit those a bit, it’s not easy at all to get it work. Basic
idea relies on the different jeans models from which the customer can choose
which one they want and then finetune it for their taste.
Harri: Where does the name Nomo Jeans come from?
Mari: Jussi?
Jussi: Well, Harri Rautio (CFO, co-founder) can be blamed
for that I think. I had the initial idea and the working title for that was
DZIINS when I was recruiting people to join me. Harri said “Yes, this is a
great idea, I’m in, but we need to change one thing, the name is horrible.”
Mari: ..an engineer joke!
Jussi: Then we were like ok, well let’s think of what we can
come up with. We wanted it to be short, referring to our core values, should
not mean anything nasty in any language and that website url and company names
and all that stuff should be readily available to register. We thought numerous
different possibilities and Harri then one day asked how about Nomo? That
became about somehow as a variation from my last name, Mononen, so it could’ve
been at some point just an anagram, but that was not Harri’s initial idea, he
just thought that it sounded pretty cool. We agreed that it was short enough,
checked translations and found out that domain names and all that were
available. At that point we also did an informal survey with people from
different countries how did that sound and compared it with few other options
as well. We liked it the best among ourselves, it received most positive and
least negative feedback from our choices so it was then pretty clear that this
is the best option to choose.
Harri: When we discussed briefly with our group, we were
wondering about the name because when you pronounce it in English, you cannot
help but notice the similarity to “no more” jeans…
Jussi: ..Yes, we’ve certainly talked about that as well and
used an unofficial slogan “No more bad jeans” which was some kind of an
internal joke with us in the beginning. Nomo also means a midget or fairy in
some Spanish dialect, so speaking figuratively, we’re (for the time being) some sort of a weird
midget or small player amongst the giants in jeans manufacturing so it kind of
fits. Some of us we’re worried in the beginning – how can we be “no more” jeans
and actually sell jeans; and another thing that came up with older people..
uuhmm.. No, I remember incorrect, it was with teens that it came up. Some young
people made a joke – Homo jeans. After a bit of thought, we came to conclusion
that that association would not be harmful, and on our primary target market
group it didn’t make so much of a difference. So we decided to go with Nomo.
Harri: What is the primary target market group then?
Jussi: We have defined it initially as 30 to 55 or extending
to even 60 year old urban women. It is somewhat similar as an age group to
urban men which is the secondary target. Our customers are currently
approximately 70% women, 30% men. When you talked with Mari now, I jotted down
on some ideas what I think you could try to tap on in your project here. How we
ended up with this primary target was that we did an initial customer survey in
which we interviewed about 100 people, it was not any scientific study or
anything, but one thing to consider could be kind of verification of our
findings that do we really have the right target group – that is if that fits
in the scope of your work. We have quite strong intuitive feeling that we do
have a right target group and we’re communicating to the right people – but
then again we have assumed wrong in some cases before as well.
Harri: In our initial talks, we concluded that Nomo is also
very attractive amongst ourselves; that is 22 to 30 year old urban people.
Having said that, of course School of Economics people might be a certain
bubble among larger public, meaning that not all 22 to 30 year olds are
comfortable in investing 130-200 euros for jeans – but nevertheless, there are
significant amount of people in our age group that do.
Jussi: Yes, we made a conscious decision that we will not
actively go after the approximately 24 year old highly fashion aware urban
hipster because our idea relies on two distinct features: it is the very good
fit of the jeans and on the other hand the possibility to fine tune the end
product according to your taste. In the typical 24 year old target market, the
fit is not that much of an issue because most body types fit, at least to some
degree, the jeans available in stores already or they don’t mind that much is
it a perfect fit. Another thing is that in that group people are perhaps not
into the tune it to your own taste yet, they would rather follow the fashion
trends than tune the jeans to their own taste. So we know in some level that
we’re not able to serve that segment very well and hence have made the decision
that we will not put out the newest of the new, latest trend fluffy stuff...
Harri: …yes of course not. But right next to the latest
hipster trend group (trend setters) are the early adopters and early majority
which..
Jussi: Yes, that (early adopters / early majority) on the
other hand is very much our target group.
Mari: ..in Germany we have a real issue in getting to our
primary target group people. We have managed quite well in Finland to do that,
but we have a lot to do in Germany.
Harri: We noticed that few fashion bloggers have noticed and
written about you. Have you targeted your marketing to them or have they taken
the initiative on their own?
Mari: We have done PR work to reach the bloggers. We listed
15 blogs that we thought were to most interesting, and we set a goal that we want
to be featured in at least half of them. We’re almost there with our goal,
there’s one more “important” blog for us to reach as soon as possible. We
hosted a press breakfast in November after our shop launch in Helsinki and she
(blog writer) was coming then, but wasn’t able to write her story yet.
Hopefully we get that done now in the beginning of the year. With blogs, we
have actively done work to get our story out there, the same with magazines as
well. There will be a story in MeNaiset this week, in the next issue of Viva,
as well as the jeans special issue of Elle magazine. In Elle, we have the
industry expert role in commenting the issue. With all that, we have
practically covered all main media within our target market group.
Harri: What is the main message that you use in your
marketing, is it the “no more bad jeans” or “jeans that fit” or…
Jussi: We have used three main messages in our
communication. One is “Jeans that fit”, second “Stop wearing other people’s
jeans” and the third “No more bad jeans”. I think we have thought about this
quite extensively and one “exercise” that we did was to form a Nomo brand
personality. In our opinion that person would be extravagant/extrovert speaker
of the truth, challenger of the status quo. What comes to our actions, PR,
marketing, all external communication etc. – i.e. do we actually do what we
think, and is our message consistent with that – probably not 100%. These are
the really interesting things for us if you could touch in your
project/research a bit on: whether or not our target segment is correct or
should we do some adjustments to that; what kind of positioning should we seek
in that target segment; based on our core values and the positioning, what are
the key messages we should constantly communicate; with our core values, the
key messages and our very limited marketing budget, how can we build a
successful, sustainable and street credible brand. These are things that we
have given a lot of thought and they still a lot more thought given to them,
but they are so challenging that every kind of external help in pondering these
and developing us to be better would be extremely helpful. New ideas,
point-of-views, opinions are always very welcome. If we take this even forward,
then based on these, we could develop, considering our resources and all that:
what is the best marketing mix for us, how do we need to localize our
communication in different markets, and ultimately how do we proceed with the
German market opening. That is currently our primary foreign market and we have
a lot to do to get it off the ground.
Harri: How have you marketed Nomo in the German market now?
Mari: If I say bluntly, we have not made any significant
marketing efforts there yet. We’ve had people handing out flyers, the local
radio in Hamburg made a story about us and we are currently planning more
action. The small challenge is that we have only a part time resource doing the
marketing / PR stuff with our store manager there now.
Harri: Why Hamburg from all the places in Germany?
Mari: The German language market is the largest jeans market
in central Europe, and clearly our main market, and that’s where we started to
look for opportunities. We made a list of 15 cities in that market, evaluated
the market potential of that area, i.e. the number of people in the larger
proximity of the city and what is the purchasing power index of that area
compared to others. These analyses lead to a short list of 5 cities in which we
started to look for shop locations and specific commercial properties to set up
a shop. Hamburg is one of the least formal cities in Germany when it comes to
business dressing, so it is in a way a “jeans city”. Berlin was of major
interest as well and we have already talked on few specific commercial
properties but what denounces Berlin is that there is a very large student body
present, which in turn decreases the purchasing power average for Berlin. Other
interesting cities on our list are Munich, Dusseldorf and Frankfurt. From
those, Dusseldorf is now the most interesting one – commercial property is
somewhat available and shop staff as well. Munich, the challenge is that for an
example store managers are asking for 7000 euro monthly salary – because
competent people are fairly hard to find. I was thinking that I could leave
there to be a store manager, it sounds so good, haha!
Jussi: …and I’m coming with you.. Oh no no, I had reserved..
uuhmmm.. what was it? East Malaysia!!
Mari: Yes, so the German market started from those basics.
And when we continue our expansion there, we will continue going through our
short list first and look for commercial properties through real estate brokers.
Harri: The shops in Germany are your own shops?
Mari: Yes, in Germany the Hamburg shop and next upcoming
ones are our own. There has been some interest for franchising agreements
lately but that continues currently on other markets. Franchising activities
are currently outlined from our core strategic actions, so we are moving ahead
with those on a slightly slower pace, and it’s more collaboration based work
that needs to be done on that field.
Harri: Running your own shops of course gives you the most
control but it also is fairly capital intensive. Have you considered other
options for sales & distribution, like franchising, shop-in-shops,
pop-up-shops?
Mari: Well, to speak the truth, our franchising concept is
moving currently ahead so that we are in development stage with our franchising
agreements, store concept and all that, and it’s actually moving forward in Mid
East. What comes to shop-in-shops, we have decided not to consider them as an
option for now, as we are so new actor in the market. The conditions we would
get now from major department stores or key accounts would be extremely
challenging for us. We have the power of just a label for now, not yet a brand.
So our negotiation power is for now fairly low. We need to develop our brand
and its recognition significantly before going into that direction. Shop-in-shops
definitely are a considerable option at some point but there is a lot we need
to develop also in our shopping space concept for that. What we have now in our
shops would need some serious compacting in order to fit in to the
approximately 12 square meters the department stores are willing to allocate
and “rent”.
Harri: What about competition, who do you consider to be
your toughest competitors?
Mari: We have examined both Finnish and German markets with
a price anchor research. That is, we have listed all relevant competitors and
looked at their anchor price levels. We found that in Germany, different labels
and brands clearly have a certain anchor price level, in Finland it was not so
evident.
Harri: From the list here, can you mark and explain who do
you consider to be your primary competitors and why (scale 1 to 5: 1=never
heard of, 5=worst competitor)?
Mari: …(marking down the list).. Yes, Denham will be when we
have selvedge (denim), but at the moment not so clearly. Kuyichi is somewhere
between 3 and 4.. we don’t have organically produced denim yet. If Replay can
get their “Made in USA” line into better condition, then we are there with 4.
In our primary target segment, we are competing strong with Sand Jeans.
Jussi: …If we look at
men who come to our shop, I can with confidence say that most of them are
wearing Diesel Jeans. That is very evident on the male shoppers.
Mari: That’s a good point. I was looking at this from purely
feminine point-of-view… That is very true that Diesel is strong in our male
customer group.
Harri: You use somewhat Facebook and Twitter in your
marketing, LinkedIn perhaps not that much (according to observation). How
important is the social media aspect in your marketing?
Mari: SoMe (Social Media) is our primary marketing and
advertising channel, so yes, it is extremely important. That is also a reason
why Germany is very challenging for us – the social media scene is very
different from Finland, people use significantly less, and many people don’t
use social media at all there. We should launch our German facebook page soon,
so we do consider that it’s important there as well but we also need to think
about alternative ways to get our message through in Germany. Social media
suits our corporate values well because we strive for openness, transparency,
responsiveness and things like that.
Harri: Have you bought advertising space in social or
traditional media?
Jussi: We have invested a bit in Facebook marketing, other
forms are still in process..
Mari: …yeah, well, in Elle (magazine) we have an
advertisement coming up.. And the only reason we went there is that we got it
with so low price, hahahha!
Jussi: We need to get our website, Facebook page and Twitter
feed working well, later on maybe look at LinkedIn, it’s currently very
strongly b-to-b marketing in which we don’t have that much to contribute. There
is a Nomo Jeans group or employer there and we have an employee as well who we
don’t know..
Mari: There are a few groups in LinkedIn that I follow
actively but I don’t contribute on my own. And yes, there is some American who
has put us to her resume although she’s not working with us…
Harri: How far have you looked at your possibilities in
social media? Meaning, as a wild idea, there are markets for tweets already
(you can buy endorsement from people with lots of followers)?
Jussi: We haven’t really. I believe in “genuine” user
feedback. Yes, we could buy some tweets and such but in my opinion, that would
be pretty shallow. I don’t condemn it as unethical as such but for me, its more
important to find ways to get right kind of responses from right kind of
customers. It may be slower and take more effort but that is something we are
willing to invest in because it is more sustainable to build our brand that
way. For bloggers, we have done PR work like: “Hey, we exist, this is our
product, come and try it out” and that’s about as far we can try to influence
them, it’s up to them if they do come and check out us or if they write about
us. And that kind of stuff is fine I think, but getting endorsements by buying
tweets is uuuhmmm.. gray area..
Mari: Yes, and we haven’t actually invested anything for
blogger interest, all of them have paid their jeans on their own. Journalists
have as well. We have offered a minor discount but that has been our only
“monetary” incentive. Except for few very rare exceptions.
Harri: About your plans, you probably have looked at the
next possible markets to enter. What is your expansion plan?
Mari: Well, Nordic countries, excluding Iceland are very
interesting for us. From our perspective, Sweden is the most likely to proceed
towards the end of the year. From resource perspective, it goes so that we look
at countries on one-by-one case basis and build our brand so that we move
gradually and develop our concept along the way. Proceeding one by one is in
our view more effective than tackling multiple cases at the same time. Every
country needs their own little perks. It’s more feasible to have many shops in
one country than to have one shop in many countries. Proceeding with the
Swedish market will most likely to happen anyway.
Harri: How is it with the franchising proceedings, what
schedule and goals do you have for that?
Mari: That is actually moving forward with some pace right
now, we hope to have two franchise shops open in the summer already. Clearly,
what we have managed to solve is the process from scanning to ready made jeans,
which is the most difficult part and that interests our (possible) partners a
lot and that’s what’s driving the partner interest and requests forward.
Harri: What are your goals? What is Nomo like in 2 to 5
years?
Jussi: Profitable, well known in Europe, smart jeans brand,
strongly customer centric, ethical.. A brand which is customer driven, not
design driven. We have good clothing design as the basis, but we design for
customers, not to boost the ego of our designers. In certain aspects, a
no-nonsense brand, strong value for price ratio, and what we are paid for, as
we are a premium priced jeans brand, is good value – the substance behind
everything we do.
Harri: You mentioned ethical action. You produce your jeans
in China – how do you make sure your suppliers and/or contractors follow your
principles?
Jussi: We screen our suppliers and partners very carefully
on an ongoing basis. What we emphasize is of course machine setups, and in all
actions how does everything work around it. Production quality is number one
but we cannot brag about how we force our Chinese partners to do this and that
for us, we are a small player still. I think I’m the only one of our core team
without children and that can be seen in our actions: because of jeans, we
don’t want to take anyone’s childhood away by working in sweatshops nor do we
want to leave our planet in any worse condition to our children than it is now.
We want to be profitable, but making profit is not justification to do any bad
to each other or the planet itself. I cannot articulate this very well I think,
we have been pretty quiet about these, but these are matters that are very
deeply built in or ingrained in our minds, actions, the company dna. It’s not
in any way like: “Yeah, this is hot and in right now, so let’s put a stamp on
it and put out some artificial marketing campaign.” We are not perfect in everything production
and ethical action related. And we want to get better. It’s not a thing that we
want to shout out loud on every street corner, it’s action that we want to be
considered in every single thing that we do.
Mari: Yes, it’s kind of in the background all the time –
which figuratively speaking means that it’s in the precondition to everything.
If you know anything about the fast fashion vs. slow fashion movement, we are
very much in the slow fashion side of that equation.
Jussi: The life-cycle thinking of how jeans are manufactured
is important. It of course have to be so that as little as possible waste is
produced in the manufacturing process and all that. But in our view, the worst
case of cloth or jeans ever manufactured is the one that is manufactured that
never used – meaning that it goes to landfill from the store for being outdated
or that it sits in your wardrobe for a year or two before being disposed of.
That is the waste we should try to get rid of.
Mari: In certain aspects, the whole China phenomenon is
interesting. The fad of fast fashion of selling a lot, constantly renewing
models, manufacturing a lot, making profit with replacing the old with new
fashion at increasing pace is greed that has ruined the reputation of
manufacturing in China. For an example, the kinds of knowledge and machines
that we are using in China, cannot be found nor operated by European
manufacturers – the latest know-how and technology is in China, because of the
big players that have transferred their manufacturing there years ago. Now,
that we have worked to do manufacturing in Estonia and Finland, the ground
level on which we work on is significantly different. The local players here
are about 4 years behind in technology, washing techniques that are environmentally
friendly, etc. We are paying the price for fast fashion ruining Chinese
manufacturing reputation with over exploitation.
Harri: These are all very good points. Why doesn’t your
website and communication tell all this to the consumer?
Jussi: We have been somewhat quiet on this. That is perhaps
one thing we would need to improve on. We have wanted to build a strong
foundation on it first and have not communicated it that much for the time
being. For a practical example, we have set a goal that not a single pair of
Nomo jeans go to landfill: we have some returns that we can use for color
models or for fitting purposes in our store, and the ones that we cannot use,
we remove the labels and donate to crisis area help – there it is not priority
number one do the jeans fit perfectly. So not only do we concentrate on
minimizing waste during production and sales, we try to think where the jeans
go after they leave our hands. This is in a way a two-sided sword for us – yes,
that is good that we do this and it would make sense to use that message in our
marketing and communications as well, but that is not good advertising to us –
those actions and values should be self evident, that is what we do, that is
what we are. So how could we advertise that? In these kind of issues, it would
be good if you could help us on ideation, how can we carry this message without
making a big fuss about it? It is clearly an inherent part of our story, but I
don’t want that we get the so common “hypocrite green label”. We don’t want to
raise a cynical reaction from our customers. Lots of large companies
“greenwash” their products and image, produce environmental reports and all that
to use it to their benefit. How do we tell the ethical and green part of our
thinking and doing in a non-intrusive and natural way, the Nomo way – that we
haven’t come up with yet.
Mari: …and that is not a central message in our marketing..
Harri: …maybe not. But by not telling about it, it leaves a
“shadow” of suspicion or a question mark, have you thought about these? And
very clearly you have.
Jussi: We have thought these yes and of course we are not
perfect in every sense. We should do more to try to communicate it, and we will
I think with time and a bit more resources.
Harri: What are your greatest challenges at the moment?
Mari: It is our formulas and production process. The no
fitting approach has required and still requires a lot of work to make it
really good. We are the first in the world to do this and we have made it so
far, but still there’s a lot of room to improvement. We are small company
acting bigger than we actually are – resources are always stretched. No one of
us leaves work early in the afternoon, not even on Fridays, so that our table
would be empty of work for the day.
Harri: How many are you at the moment?
Mari: Including temps and distant workers we are 15 in
Finland, 3 in Germany and one in China. Almost 20. We talked with many people
last Friday in the Finnish Catwalk-event – one of the topics being that we created
13 new jobs last year for the clothing industry in Finland. Someone mentioned
that it just might be the largest increase anyone has created for this industry
in a long while.
Harri: This has been extremely interesting. Thank you very
much for your time.
Mari: Thank you for the interest. It was really nice talking
with you. Please don’t hesitate to contact us if more questions.
