Embracing A Minimalist Wardrobe And Building A Business Around It

The Story of Encircled

Hello! Who are you and what are you working on?

My name is Kristi, I’m the founder and CEO of Encircled. Encircled is on a mission to create versatile, high quality and responsibly-made clothing so that our customers can be truly proud of their wardrobes.

Our direct to consumer eCommerce model and small-batch, local Canadian production allows us to offer sustainable clothing at competitive price points. From a design perspective, we focus on creating in two key categories - timeless basics and versatile must-haves.

Our timeless basics are well-loved, classic silhouettes upgraded using superior fit, high-quality construction details and sustainable fabrics.

Our versatile must-haves explore the idea of wardrobe transformation by literally changing in shape or style, converting from one silhouette to another, offering endless options for your wardrobe.

Our customers are highly conscious consumers who are well-traveled, aware of world issues, and are thoughtful about what they purchase. They’re educated, curious and compassionate. I’m super biased, but we have amazing and inspiring customers!

Encircled started in 2012 with one product, in two colours, on the floor of my 500 sq. foot condo. We’re now a team of 10, with over 35 products, in close to 2300 sq ft of office space and continue to expand. We’ve experienced over 300% growth alone in the past two years.

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What's your backstory and how did you come up with the idea?

I started Encircled out of frustration with a lack of versatile and stylish travel clothing.

While packing for a last-minute yoga retreat, my suitcase broke. I had to stuff everything into a much smaller bag, and it opened my eyes to the fact that I was one - bringing way too much stuff, and two- none of my pieces were versatile, and had potential to be I had a circle scarf packed, and I started to wonder...

  • What if this was made out of better fabric?

  • What if you could turn this into a cardigan AND a dress?

  • What if it would stay in the ways to wear without pinning or tying?

When I returned home from the yoga retreat, I felt inspired. I started drawing out product ideas on large pieces of paper and taping them to my condo doors and walls. I brainstormed company names and even bought a sewing machine off craigslist to sew my first sample. That sample, eventually became my first product, the Chrysalis Cardi. An 8-in-1 travel piece made from beautiful fabric, with hidden strategically placed snaps to help the garment transform into various looks effortlessly.

I did start really small - making just the Chrysalis Cardi in one size, two colours and retailing it online, shipping from my apartment.

At the time, I was employed full-time as a management consultant and making the best money of my career. However, I was never home - I traveled about 4-5 days a week every week. When I was home, I used my time efficiently to work in the business, do customer service, ship orders and write emails. I’d often take bags of orders with me to the airport, and drop them in the airport mailbox pre-flight!

I ran the business part-time for almost 2 years before it started to grow too fast to keep working full-time. I had to decide if I’d stay safe in my career, or go for it. And so I lept, and quit my job.

Describe the process of designing, prototyping, and manufacturing the product.

The product development process has changed dramatically since I first started Encircled.

I have no fashion background - I have a finance degree and an MBA, so at the beginning, I had no knowledge of how to make a garment. So, I took an illustration course, a sewing class, bought a few books, and visited a few fabric shows to educate myself on what goes into the fashion design process.

Early in my career, I worked for a home security provider, and I remember the CEO once saying that it costs 10-20x less to retain a customer than to get a new one. That has always stuck with me.

In the beginning, everything was outsourced. I was referred to a technical designer who made our first sample, tech specs, and took my design illustrations into an actual product. I also worked with a pattern maker to translate the technical design to a real pattern for production, and a sample maker to sew that perfect final sample.

After that, I sourced manufacturers in Toronto (everything we make is made within 30km of our office), through an industry association called the Toronto Fashion Incubator. They had a large list of resources, and I called and emailed them all. It took forever! Many wouldn’t take small run sizes, a lot were out of business, and many wouldn’t work with new businesses or my fabric, but eventually, I found one. We still work with them today.

The manufacturer produced a pre-production sample using their team, I’d approve it, I’d order fabric, labels, snaps etc. for production and off they went making it. A few weeks later, the production run was ready.

Now that we’re bigger, we have a team managing these steps, and we make big efforts to integrate our customers into the design process. One key thing is that we open up a waitlist pre-design launch and pre-promote our new designs to gain interest and get feedback on the design. As we focus on designing with the mantra that less is more in a woman’s closet, we want pieces to be extremely versatile, and easy to wear. This is actually a harder goal to achieve than one might think! A large amount of detail needs to go into testing samples and perfecting both the fit and function of a garment.

A good example of this is our upcoming launch of a T-Shirt dress:

It’s designed so you can wear it front to back, or back to front, offering two neckline options. We reached out to customers on Facebook and Instagram about what they love and loathe about t-shirt dresses and had hundreds of comments.

Those comments were integrated into our design! We also learned that the majority of woman couldn’t find a t-shirt dress that was long enough, or not clingy. So, we selected a higher density of fabric to reduce cling, and lengthen the dress.

We subsequently reached out again to our social media and email list get even more feedback. Many customers wanted pockets, so we tested that in our design. During that process, we realized that pockets aren’t super functional on a t-shirt dress, and actually add ‘bulk’ in an area that women don’t usually want to highlight, so we removed the pockets!

This is how we iterate with our designs. Even AFTER a design launches, we go back and revise it based on feedback we get from customer love and reviews.

Many of our designs are evergreen, which means they stay in our collection forever. We may swap them out seasonally, but we’re designing timeless pieces that we want to live forever in our customer's closets. So, it’s critically important that our products are well designed, with impeccable fit, and that requires continuous improvement.

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Describe the process of launching the business.

Launching my business was a slower process as I was working full-time (and beyond that with all the travel).

My original website started development on Shopify, and then my developer left the project mid-way. I hired a new developer, who convinced me to move to Magento, so I actually launched on that platform.

After being held hostage by the developer threatening to take down my website unless I pre-paid six months in hosting fees (he was hosting), and not having freedom or ability to make changes on my own website, I moved my platform to Shopify, and we’ve hosted on their ever since. I actually built my first Shopify site myself, and we still, for the most part, maintain it internally without much development help.

To fund the business, I used the proceeds from the sale of my car to fund the initial launch of the company. This was probably around $20k.

Post-launch, I invested some of the funds from the sale of my condo, about $15-20k. The most expensive startup costs were the website, product development costs, and photos/videography.

Our first product was fairly complex, so I wanted to have amazing photos and videos to story tell how you could get so much versatility out of one garment. A production-ready garment sample takes about $800-$1500 in development costs to create, and the remainder of the funding went to our first production run. Post-launch much of the costs included a PR agency that I retained, more product development, funding production, and influencer partnerships.

When I launched in late November 2012, the initial month was pretty slow. I remember celebrating in late December when I finally had a sale from a name I didn’t know. From there, it took some time to get traction but early PR hits definitely helped. However, I found retaining a PR agency to be super taxing financially, and we also parted ways in February. A particular low point I remember was in March 2013, when I sold ONE piece. In that month, we made $138 total.

It was at that point that I realized I couldn’t rely on just PR alone, and started to build a more formal marketing plan. This truly transformed my business. In our first full year of business, I did about $40,000 in sales. Now, we’re on track to do several million.

The biggest lessons I learned from launching are actually quite simple:

Don’t give up control of your website.

In the initial stages, when money is tight, and updating your website is key, being able to do that yourself is so important. When you’re an online-only retailer, your website is essentially your window to the world and a key part of establishing your brand.

I wish I’d never let that developer talk me out of launching with Shopify because it really is an excellent DIY platform for ecommerce startups. It’s easy to use and has so much functionality like inventory tracking, built in shipping labels, and other apps to help you run your business smoothly.

Have a marketing plan.

This one is a little embarrassing for someone who worked in brand management for years, but it’s so important to make a plan.

I started Encircled and became reliant on our PR agency for generating interest and traffic. That was a huge mistake! Not only is PR not as effective as it used to be, but it’s also expensive, and sometimes takes a long time to come to fruition.

Root your marketing plan in numbers. Setting, and having clear, realistic goals combined with a focused marketing plan is what helped propel my business growth exponentially.

Don’t quit your day job (yet).

The stress created by having limited financial resources, and starting a business is REAL.

Having a full-time, stable income while I started Encircled helped minimize that stress. I was able to save for when I was ready to quit my job, and also, I didn’t have to worry as much about money or take on early investors or debt unnecessarily.

Yes, it was hard to manage both, and I gave up a lot of fun time on evenings and weekends for years, but it was worth it for me. Though I’ve had some tough financial moments since then, at least initially having that job security was such a blessing.

Since launch, what has worked to attract and retain customers?

Early in my career, I worked for a home security provider, and I remember the CEO once saying that it costs 10-20x less to retain a customer than to get a new one. That has always stuck with me.

Initially, my focus for Encircled was dead set on PR. However, after that low point in March 2013, I created a true content marketing plan with a keen focus on growing my email list, creating engaging content on social and our blog, and working with influencers/bloggers.

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Encircled’s first design, the Chrysalis Cardi.

This was how we allocated our time and efforts for the first 3.5-4 years of the business. It wasn’t until the past year that we started investing in SEO, Facebook and other paid advertising.

Facebook ads have been good, and bad. We hired an agency to manage them initially, and though we saw some success, the fee structure and return on ad spend was not there to justify it. Our cash flow suffered greatly, and it hurt our profitability. Since then, we brought Facebook ads in-house, and though we cut our spend, and our revenue from that channel has decreased, we’re seeing a more profitable return on investment.

We also hired out our SEO to mixed success. Though our organic traffic has increased slightly, it is hard to find someone qualified in this space that knows SEO inside out and how to execute it to today’s standards and the keywords we want to rank for our brand.

Still, we see the highest ROI on owned channels like email. Our conversion rates are the highest, and we put immense effort into creating content on our blog, The Journal that is both engaging and value-added for our customers.

I started the blog before I even launched our product. It initially was a journal of my experience developing our original product, and the lessons I learned along the way. In 2013, after taking an online marketing program, I started to plan out the content more seriously, and focused on updating it monthly, honing in primarily on travel-related blog posts. Today, we generally update it weekly or bi-weekly, and regularly invite guest bloggers to contribute.

Our most popular blog content is related to styling, how to wear items, and curating a minimalist wardrobe. Not many brands write blog posts with the goal of educating. Many do it is a way to subtly promote their products. Our genuine authenticity with our dedicating to writing great posts sets us apart. If you’re looking to add a blog to your eCommerce store, I suggest spending time on your Ideal Customer - who are they? What types of content is engaging/interesting to them that makes sense for your brand to create? Where and how can you promote this content?

Half the battle is writing the content, the other is promoting it so that people can actually discover it!

We’re not always selling in our newsletter, but we’re always delivering value. A key way we’ve been able to grow our list is through offering an opt-in bonus for subscribing to our newsletter. Initially, I gave away a printable carry-on only packing list. Since then, we’ve updated it to our Minimalist Wardrobe Workbook which is a beautiful, 18-page workbook that helps customers truly transform their wardrobes. For free.

How are you doing today and what does the future look like?

Encircled sells 100% direct to consumer. Initially, I did some wholesale but after some major fails there, we decided keeping things online was best for our agile production model. It also works better for our margins.

Encircled designs, and sews all of our clothing in Toronto, Canada using fairly paid labour. We also use super-premium, sustainable materials, so our cost base is much higher than traditional retailers. Going direct to consumer allows us to keep our products at an accessible price point while staying true to our values as a brand.

We also do some pop-up shops and host in-person events in our studio. Our Shopify store processes 100% of our sales - we don’t do any dropshipping, nor do we sell on other marketplaces or channels like Amazon or Etsy.

Our most engaged and profitable social channels are Facebook and Instagram. We invest a lot of time into creating inspiring, and educational content for both of these channels, and truly love connecting with our customers and followers.

Today, we have a team of 10 including myself. The team is split into production/design, marketing, and customer love. All fulfillment is done from our studio in Toronto, and we pride ourselves on great customer experience, so we have 2 people working in that area of the business. The remaining team members are split between production/design and marketing.

Our business is split roughly 55% Canadian sales, and 40% US, then 5% outside of US/Canada. Our plans are to expand our US sales with more focus on that market.

Additionally, I hope to open up my own production factory in Toronto within the next year. This is a move to help improve our agility, reduce out of stocks, and truly bring things full circle. Lastly, I’d like to bring on more senior hires to our team next year allowing me more time to focus on strategic aspects of the business, and also personally, to take a few weekends off!

Through starting the business, have you learned anything particularly helpful or advantageous?

Being an entrepreneur, and running my own business is one of the biggest challenges of my career by far.

In addition to being always resource-strapped (never enough time, money, people), you’re constantly riding the emotional highs and lows of a growing business. We’ll literally have days where our sales are $20,000, and days where it’s $2,000. It’s that variable!

I’ve learned that to whether the storm of entrepreneurship in eCommerce you need a few things:

  • A support system - a network of like-minded bosses that get you, and are going through what you are that you can rely on to lend an ear when you need it, and vice-versa.

  • A mentor - someone experienced to push you and guide you when things get tough and to celebrate the wins with you. Every new level in your business creates new opportunities, and new challenges. I have an amazing mentor, Julie Cole. She’s always challenging me, and helping me get through those times when you feel like you’re totally alone.

  • Great time management - In addition to being insanely protective of your schedule, you need to use your time effectively. This means, using your time to focus on income producing activities, but it also means sometimes taking time to yourself to not work.

  • Resiliency - failure in entrepreneurship is all part of the journey. The ability to pick yourself up again, brush it off and keep going is so critical.

  • Consistency - showing up every day, and being consistent with your actions is so key. The most successful businesses are ones that honed in on what worked best and showed up to do it day in, and day out.

What platform/tools do you use for your business?

Our essential shopify apps:

  • Stitch for syncing and managing inventory across multiple channels

  • MailChimp for email marketing

  • Judge.me for reviews automation

  • Shipstation for shipping orders and managing returns

  • Helpscout for managing customer love inquiries

Our must-have team collaboration apps:

  • Slack for enabling team communication

  • Google Drive + all apps

  • Asana for project management

What have been the most influential books, podcasts, or other resources?

I’m a podcast junkie, so this is a tough question to answer, but here are a few of my favs:

  • Being Boss - Hosts Kathleen and Emily, help you feel ‘not alone’ in feeling all of those crazy thoughts you get as an entrepreneur. Advice runs the gamut from getting paid, hiring a team to managing mindset.

  • Online Marketing Made Easy - Amy Porterfield started as a Facebook specialist but now covers off a broad area of digital marketing tactics, and productivity for online businesses.

  • How I Built This - A podcast featuring interviews with some of the most prominent CEOs/founders who started their businesses from the ground up. One of my fav episodes is with the ethical fashion icon, Eileen Fisher. It helps give you the perspective that everyone starts from somewhere, and everyone makes mistakes along the way.

Books I love:

  • Blue Ocean Strategy - primer on how to position your business in a way that stands apart from your competition

  • The Universe Has Your Back by Gabrielle Bernstein - a book essential for reminding you to have faith in your journey, and the universe.

Advice for other entrepreneurs who want to get started or are just starting out?

Start small. Launch your business with your ‘minimum viable’ product assortment, and see what works before producing a lot of inventory of your products.

You can even leverage pre-orders to test the market for a product to gauge interest. Building a business from scratch requires a ‘test and learn’ mindset. This applies not only to product development but marketing as well. Not all investments in marketing will pay off, but you will always learn something. Start to uncover what is actually moving the needle on revenue, and double down on those activities.

Hire slow, but hire sooner than you think. I waited a long time to hire my first employee, mainly out of fear of being able to handle their wages financially.

As soon as I hired someone, I realized how many non-income producing activities I was doing on a daily basis. Just having a person to manage shipping and customer love (our version of customer service), freed up so much of my time to actually grow the business. It’s important to balance this advice with taking your time to find the right person. I’ve made many hiring mistakes in my journey, and it’s usually because I rushed the process. Take your time, clearly define the role and the ideal characteristics of the person you’d like in the role, and don’t be afraid to keep searching if you don’t find the right person on the first try.

Are you looking to hire for certain positions right now?

As of the publishing date, we’re looking for a passionate, new grad to join our team in the role of Marketing Assistant. That said, we’re always hiring - if someone’s a fit, we’ll make a role for them. In particular, I’d love to improve our paid ads channel, and copywriting.

Where can we go to learn more?

Website: www.encircled.co

Instagram: @encircled_

Facebook: @getencircled

Twitter: @encircled

Pinterest: @encircled

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