Italic is trying to become a luxury brand in its own right.
The company has been around since 2018 and has gone through many iterations. At the same time, the underlying model has remained consistent: Italic forges partnerships with the manufacturers of well-known brands like Staub and Samsonite and sells unbranded products directly from the facilities at a fraction of the price. While the company has seen growth over the last few years, it's changed some of its business mechanics. Most recently, for example, it decided to halt its membership-only model.
This change, said founder and CEO Jeremy Cai, has positioned Italic for more success. Cai joined the Modern Retail Podcast this week and spoke about the company's latest approach.
"Our strength really is in the business side," Cai said. "We've built a pretty strong supply chain orchestration platform... We basically had to build our own version of Shopify, our own version of a returns platform, our own fulfillment network and so on and so forth."
But by building such a strong back-end comes the problem of how to define a company like Italic. In some ways, it's a marketplace that directly matches manufacturers with customers. That's, in fact, how Italic first marketed itself. Now, Cai has realized that customers simply don't see it this way. "For all intents and purposes, we are a brand," he said. "Because they don't really see or need to see what goes on underneath the hood."
Going away from its membership-only model isn't the only big change Italic has made of late. A few years ago, Cai had big plans to expand to multiple categories -- he saw Italic as partnering with numerous manufacturers that manufactured many diverse products. Now, he's realized that curation is more important.
"We can't simply expand rapidly for the sake of expanding supply," Cai said. If the products don't sell through, that leaves the manufacturers Italic is working with in a lurch. "We do have a tremendous amount of responsibility in terms of our agreements with our manufacturing partners," he said.
That has made Italic think smaller and with a more curation-focused lens. "We started the year thinking we were going to launch 1,000 products," said Cai. "We'll probably launch 100."
Another big change for Italic is its focus on organic growth and less reliance on digital platforms like Facebook. So far, things seem to be working. "We cut our growth spend by 5x from March to April this year, and our revenue grew -- and it's continuing," Cai said. "So it's kind of like, what were we spending money on in the first place?"
With that is the larger goal of making Italic a prestige brand that isn't wholly reliant on one-off customer acquisition techniques. It's a focus that nearly every DTC brand faces right now.
Over the next year, Cai said, he's dead set on "figuring out a path of growth into the future where we can continue to sizably grow the business without needing to solely rely on paid [advertising]."
