Monica + Andy CEO Monica Royer on expanding the children's apparel brand

0:03Hello, everyone, and welcome to the Modern Retail Podcast.

0:30Andy, for many years now, just because you were an early kids apparel DTC player. And so I want to go into just the history of the company, how you decided upon the trajectory and growth strategy you did. And then we can talk about all the things you're doing now because you're doing the thing that it makes sense every DTC company is doing, which is going into wholesale because that's how you grow, I guess you could say. We'll talk about all that. But Monica, how are you doing? I'm doing great. Thank you so much for having me. Super excited to be on the podcast today and And I'm still having a lot of fun building the business.

1:00Yes, I'm having a lot of fun learning about how you're growing the business. But first, let's start with who are you or what was your professional background? Correct me if I'm wrong, but Monica and Andy first launched in 2014. Is that right? It launched in 2014. So we're getting close to our 10-year anniversary, which is unbelievable. I'm not sure if you can count COVID years as actual years of progressing or doing anything at this point. So I feel like maybe that's like seven or eight years into the business. But we launched in 2014. I had my daughter in 2010. So I had actually worked in the pharmaceutical industry before.

1:33So previous to this, I did absolutely nothing that would suggest that I would build a business. I was not entrepreneurial as a kid. I didn't want to have my own business. There was nothing that would say that I would do this. But it was interesting, as I was shopping for her, literally from my hospital bed, I had had a front row seat. My brother had built Bonobo starting in 07. And so I had become his unofficial, I guess, advisor, if you will. I didn't know what I was getting myself into at the time. Didn't know anything about direct-to-consumer businesses. I don't think anybody did in 2007. No, no, that was, no one's talked about that then.

2:10Nobody talked about it. But I saw that he had built this like incredibly special relationship with his consumers by the time I had my daughter in 2010. I had lived a plant-based lifestyle for 10 years up until then as well. So I thought a lot about like, what was the product that was touching your skin? Would it be organic? What were the things that we would be putting on and into her body? And then as I was shopping online, I thought parents deserve this better experience. I saw that he had built it with Bonobos and that there was more of this like one-to-one feeling of, of just feeling like there was a special experience.

2:40And I wanted, I wanted that for parents. And so I actually quit my day job. I was at home with my daughter full-time for three years. and that was really the real embers of what would become the fire of the business was it was initially all about product. I wanted organic cotton. My mom is an immigrant from India. I thought a lot about the factories, what was the quality of the factories that we were working with in addition to the quality of the product. There was a lot of things that were important to me. But as a new mom myself, the next three years, I was just learning and growing as a parent and the brand became so much more about community from that experience where I thought, But I felt so out of the know as a mom.

3:21And I wanted to build a brand that felt inclusive and could bring parents into the know so that they didn't feel hopefully as clueless as I did as a new parent. Got it. And so when did you, what year did you quit your job? Because was it 2012? No. So I actually, I went through my maternity leave. And after that, I thought, you know what, I just can't go back. So I actually never went back to work after having my daughter. I never went back to my regular job. Yeah. And in some ways, Cale, it's unbelievable that I actually decided to do this because in retrospect, I saw how hard it was for my brother to build Bonobos.

3:55And, you know, my poor parents, like we put them through to startups. My husband also is an entrepreneur, as is my sister-in-law. Oh, no. And so between the four of us, nobody has like a regular job, if you will. And my parents have been incredibly supportive. But I think like the journey is never linear or easy for anybody. And And so I knew what I was getting myself into when I started this. Got it. So walk me through what the idea was or the business model was when you first launched. You know, 2007, Bonobos DTC wasn't really a thing, and it sort of made it a thing. And then in 2014, it was, and you sort of had, I guess, social media on your side back then, I imagine.

4:36So how did you go about it? What was the concept? So the brand was all about really soft, organic clothing. And so for me, it was, again, like how the product was made. We used GOT certified organic factories. Like how could we bring the best and softest clothing to parents? But how could we do it in a way that you understood that from the online experience? At the time, there was like all of these big box retailers. There was like so many choices. There weren't that many people online. And so it was like, how do we bring this like unique softness to parents, like more direct to consumer? But as we actually launched in 2014, Kale, we decided that we were going to do online and offline simultaneously.

5:15We were going to put a store here in Chicago and Lincoln Park where the brand was born and my daughter as well. And we would office out of the back of that store. And so what we didn't know was that physical retail and that physical community would take over really the first three years of the business. We sold everything, almost everything we had in the store. We didn't pay for a single online acquisition, maybe until almost 2018 at that point late 2017. But it was really, that was where the brand was truly built because we did it with the community. We started the store with like art, music, story time.

5:49At the time I had a three-year-old and I was like, what is she going to do when I work? Like we need to have activities and classes. I had a tremendous amount of support from my parents who moved into the same, not condo unit, but they live in the same condo building as us. So it really took a community for me to be able to build the brand as well. And then we got a chance to see our customers every day. How did they like the blanket? How did they like the hospital cuddle box? What were they gravitating towards? And we realized really in early days that like toddlers could be big customers for us as well.

6:17Like we were event driven, but people would walk in with a two-year-old and they would love the brand. And then we thought like, oh, we need to make sure that we have like a size range and really develop this pregnancy to preschool. And so I will say it wasn't until late 2017, early 2018, that we really started to catch more fire online because we finally had the product. We had solidified the physical retail space and we felt like much more like we had that product market fit. We understood exactly what we were doing in order to really start scaling the business. That's super interesting. I mean, it makes sense logically that a brand would start with a store and then expand from there.

6:54But in this, the world, at least the world of modern retail, it's usually you're an online brand and then you test out stores as a way. And the funny thing, Kale, is we never wanted to be a store. It was just this idea of like, oh, let's have a storefront. But the physical retail medium was so powerful. So many people came in. We sold so much more product than we thought. And so during that time, we actually did 14 pop-ups along with that store. So we worked with the CEOs of Maysridge and General Growth, which were like big malls at the time. And we did these really advantageous deals. Like we would pop into a place before Warby was like taking the location and being there full-time.

7:32And it was an incredible customer acquisition tool. But after we saw the ability to scale online with a small team, we decided we really needed to be focused. And so while we wanted to keep our Upper West Side location and our Chicago location and the pop-ups lived through the lifetime of what they were supposed to do, we kind of decided that there needed to be a shift, that we weren't like a big enough team to be doing mass physical retail and mass online. And we were like, let's really focus on online and grow like the heart and soul of this business there. When I talk with founders, a lot of them talk about community and it's a very big marketing buzzword.

8:08It seems like with you, because you actually started with a local store where you were holding events and we're talking to people in Lincoln Park, that's actual very localized community, I guess you could say. And at the time, what's so interesting is that buzzword of community wasn't there in 2014, to your point. And so for us, the folks that were working in Monica and Andy were other parents with me. It was like people that I had met in classes with my daughter became our photographer, ran our store and it was like very grassroots. And some of those folks are actually still with us today. Like the person that started the store with me and was like one of the first people that was there doing it is still somebody that like builds out all of our physical retail spaces and does our packaging.

8:46So community for us was born out of necessity as moms that were just like getting started on doing this business. And we didn't realize we were onto something. We didn't realize that was an acquisition tool at the time. We were just like, oh, it's something to amuse like our children. And then we realized that there was like new parent support groups and people were struggling with breastfeeding and all of those things. And the medium of bringing people together for me, um, you know, as I had a new baby, I feel like there was like diaper blowout. So my daughter would be screaming. And so I really wanted to create a space in which there would already be chaos all around.

9:19So you wouldn't feel so bad coming in with like your, the piece of chaos that you might be bringing in. And so it wasn't some brilliant business idea that we had. It turned out to be a great business solution that so many other people have also done as well. But for us, it just became out of this like authentic feeling of like, how do we actually offer parents what we feel like they need for both them and their children? And today, obviously, that's a much bigger part of what everybody's doing. But at the time, there was nobody talking about that. Yeah, no, you're totally right. I feel like it's only been in the last, I think it was sort of a COVID thing that made people talk more about community, which we can get into.

9:56But I wanted to ask, when you were expanding or focusing more on your online presence, how did you approach that community aspect? Because it is much more difficult to do that digitally than it is in a store in a neighborhood. Absolutely. I think a lot of that then came through polling people on social media, understanding what they were thinking about stuff, making sure that we did more intimate serving of our customers, if you will. And then we took all of our classes became online. We were doing virtual classes. We were doing live streams on Instagram. We were doing everything in which allowed us to be able to reach people in as many communities as possible.

10:33And it became so much more powerful. There's something still beautiful about being able to come together in person and underneath, like, you know, within four walls really say, hey, like, this is like the feeling. There's nothing like an in-person feeling. But we realized that you didn't need to be in person to be able to educate consumers about things about parenting, bringing our experts directly into your home. And COVID only accelerated our ability to do that so much better as well because nobody was leaving and there was so much invention that came out of that. I mean, even us sitting here on Zoom and actually like, you know, it's just it's a way for us to be able to to reach people that we wouldn't normally be able to see.

11:10And so I think that only deepened during that time for us. Got it. So were you doing virtual events before COVID or was that just a necessity? No, we did do some virtual events before COVID, but not nearly to the scale of what that would become because the audience and the ability to do that just just became so much bigger. that said there was still a lot of things that we were able to do virtually that we were able to do through social media that sort of brought that feeling of community together. And then we would pop up in all sorts of places. Even before we had a store in New York, we were hosting events and bringing community in there as well.

11:43And so it was kind of this mix of being virtual and in person, just not in an actual storefront in a lot of the events that we did. Does virtual still resonate today? Obviously not to the point of COVID, but I feel like there was fatigue in the last year with that kind of stuff? Have you experienced that with what you've been putting on? You know, I think that we've, what we've really tried to do at every point, like every year that goes, you have to kind of put your ear to the ground and say, all right, like how have things shifted and what's the right mix? And it's sort of like a recipe that you're always like perfecting.

12:14So I think there's nothing about five years ago that worked four years ago that worked three years ago that works today. And so every year we relook at it, I definitely think that there was a during after COVID, I think we saw so many more people going to in-person because we were just like, let's get out, let's travel. I definitely think it's not shifting back to not being in person, but I think there's areas where like, if you're pregnant and you're expecting, we've got classes in our Lincoln park guide shop in our upper West side and people definitely go in person. But there's a lot of people that also like to do that virtually too.

12:45There's things that I would do in person before that now, if there's like a virtual opportunity to do it, it's like, oh, like my daughter has a math tutor. And like before COVID, we would have gone in person. Now it's like, I can't even imagine like 20 minutes to get there and 20 minutes to get back. I mean, it's no big deal, but like, oh, you can just pop online and do it. So we absolutely see an appetite for those virtual classes. Sometimes they're live, sometimes they're on demand. And I think over time, like that'll shift and we'll continue to figure out what like next year's recipe is compared to this year's.

13:14Do you like, I'm just always interested in the digital programming and or just at all any sort of programming digital and not for brands but has that increased over the years or has it been at the same cadence like like or have you just seen you know now we have this many types of classes this or how has that changed it's definitely increased over the years and it's definitely increased since COVID I think the amount of people that you were able to do things with like digitally and virtually before COVID was much much smaller I think that people were like more like reticent to get on video and And a lot of times you're not even on video as you're doing these group classes.

13:48Like the instructor might be on video, so not everybody's seeing you. But I think even our grandparents class or things that maybe grandparents wouldn't have been as like at the forefront of technology to be doing before. Now, like everybody kind of knows how to get online and do something and has developed a comfort level with it. And people can do it from their phones, right? Where before, like maybe you'd be like, oh, I've got to be sitting at my computer. Now you might be listening to a class and driving somewhere like you're listening to a podcast. So I think that the opportunity to reach more people with information, and for us, that's just fulfilling the promise of what we want to do, which is like bringing that in-the-know feeling to parents wherever they're at.

14:26And so changing to where parents are at each year is really important for us. But the ability to reach people virtually is only continuing to expand. You know, you've mentioned the Upper West Side store. Can you just give a little bit of a timeline of, do you have Upper West Side, Linkin Park, do you have another Illinois store? So the other store that we have is actually Apprentice Women's Hospital at Northwestern here in Chicago. That is the fifth largest women's hospital in the country. And so we've got a pop-up like right in the lobby, which is incredible. So we get to see. So my cousin is there right now in labor, which is exciting.

14:59Oh my gosh, congrats to your family. That's so fun. Yeah. So, and we actually had one other location, but that was a four-year pop-up that recently just closed because we got to the end of the pop-up lease and we just decided that we weren't going to be there longer. But yeah, so we've got two more permanent locations, if you will, which is Lincoln Park and the Upper West Side, and then Prentice is also a pop-up. And what were the timelines? So when did you open Upper West Side? What made you decide to do that? Yeah. So I think that in 2014 is when we did Lincoln Park and that was sort of like this idea of like, oh, let's have an office and let's have it be in the back of this store.

15:37And then I believe we opened Upper West Side, I want to say in like 2017 or 2018, we knew we had so many customers in New York. We had so many customers in LA as well. So like the coasts had a lot of customers and we actually had a pop-up in Santa Monica for three years. So during this time, also with Mace Rich, one of the big malls, we had a pop-up in Santa Monica. So for a while we were like Chicago, New York, LA, so to speak. And then LA, COVID happened and we were like, all right, we're not going to put a permanent place there. But the Upper West Side, we just had so many customers. My brother lived in New York at the time.

16:14We spent so much time in New York. It was a place that I feel like we still have such a big community of parents that's there. So the Upper West Side location and the Lincoln Park location have been tremendous. So I know that you have the Walmart announcement, which was pretty recent this summer. Is that correct? Yes. Did you always think you were going to make that jump into wholesale given that or what you know let's go back to 2014 through 2018 did you just think we're going to be online only and have our stores and that's going to be it yeah so i think like it so and actually the walmart announcement was in february of oh sorry about that i'm thinking about it no no it's okay i was just thinking back to like we launched in february of 23 with walmart uh technically i did not think that we would have like massive wholesale That wasn't the goal, but we did work with Nordstrom.

17:05We worked with Bye Bye Baby. We had always like dabbled in wholesale and we saw it as a great way to like additionally meet our consumers. And so it was really interesting as the Walmart opportunity came to us, it came more out of the blue. It wasn't something that like we had planned or that we saw coming. We had great conversations with the team at Walmart. They are incredibly smart folks that like know their customer. They know their mission. They know their business. And so this opportunity to partner with them at the everyday low prices of Walmart with a line we call M &A by Monica and Andy.

17:41So the line at Walmart is called M &A by Monica and Andy. It has like a few SKUs, but obviously those SKUs are like deep as we get a chance to get into the Walmart doors, gave us this incredible opportunity to be meeting folks in person in a way that like we just didn't have plans to scale our physical retail and got us in front of an even a new consumer that maybe wasn't shopping the monicanandy.com business. And so it's been really exciting, this opportunity to bring organic to more families or like this organic first lifestyle to more families. Walmart's been such a leader as you look at organic grocery.

18:17Even the neighborhood Walmart that was just up the street from us had closed a bit ago, but the neighborhood Walmart that was here, a lot of my favorite plant-based organic brands were at Walmart. And so it's really interesting how they've really led in the organic lifestyle. And so the opportunity for them to bring it into the children's space, we've been very fortunate to be a part of. Got it. And I know that I was doing some research, and this was, I think, 2021. But you had a partnership also with Target that included an exclusive collection. Is that right? Yes. So can you just talk about just how you go about making these collections that work specifically with these retailers, what the conversations are like, et cetera?

18:56Yeah. So I think that with Walmart, the relationship has been so special because we've developed like a really one-to-one relationship with like the team and the buyers. And I think there's a difference as you're thinking about bringing these, developing these relationships. It's amazing to be online at any big retailer, right? It's even more incredible when you're a direct-to-consumer business that's born online to be able to be in physical stores with these retailers, because then you have an opportunity to actually meet their customer directly where they're shopping in stores. And while these big box stores have massive online businesses, they also have like massive physical presences.

19:34And so being part of the physical presence is a really special opportunity. And I think that there's no direct way to get there. Like in the case of Walmart, you know, they sent us an email and they came to us and that's how we got a chance to meet them. So I can't tell you that there's any like detailed strategy in which you build that type of a business. But if you're looking to do it, I mean, I think in certain cases, there's agencies that work with a lot of these retailers. They go out and they're on the road to always be checking out the latest and greatest of the brands that are out there.

20:06So the buyers that work for these companies, I think, seem to do a really good job of having their hand on the pulse of what's new and exciting out there. And then obviously, it's the broader strategy of their business on what they can approach and what they can do. And I think then And you have to be poised to really be able to scale your production needs. So we were really fortunate that we had brought in some top talent during COVID. We had, like everybody else in the world, retooled our supply chain during COVID, right? Diversified from our location perspective. But we ended up working with the most amazing God-certified factories that really had this ability to scale big.

20:44And that was just like fortuitous that we were in that position as we got the opportunity. So I think there's like, how do you get in front of somebody and get the opportunity? And there's multiple ways to potentially do that. But if you get the opportunity, are you poised to like scale to the ability of what some of these retailers would want? And I think that's probably the bigger challenge that a lot of folks will face, because there's so many different steps in terms of being able to like to scale to like 1100, you know, Walmart doors specifically. And I wanted to ask about that. So can you give a little bit of details just about the diversification?

21:18And when you went to these new manufacturers, was the idea that scale was in mind or just sort of worked that way? Yeah. So we went to the new manufacturers long before the Walmart relationship came into the picture. So the idea always, Cale, as we were doing stuff, is we want to work with got-certified factories. So the quality of the factories and that certification was really important to us. But over time, we were able to, obviously, as a company starts, you have only a sophisticated of a sourcing channel as your years in business, so to speak. So in year one, you're like, great, I'm working with the best factory that I possibly can.

21:55But a lot of those factories, the quality is absolutely exceptional. But their ability to deliver to 1 ,100 Walmart doors may not be there from day one. And so for us, it was very fortuitous that we ended up during COVID saying, hey, let's take a whole look at our supply chain. We brought in our first ever chief sourcing officer. That person had deep relationships within the industry, had been doing it for a much bigger business than us. And I think that's part of the magic too of scaling is you want to make sure that you have a mix of like people that have never been there and done it, because that's kind of the magic of a direct to consumer business.

22:34It's like some folks are learning on the job. As you really start to scale, you want to couple that with people that have seen it and done it at scale, because you kind of, you don't, you don't want only people that have seen it, done it at scale. Cause they're moving off of like a cruise liner kale onto like a life raft, so to speak. Like the direct to consumer business is going to feel like if you're working on a team with a thousand people. You're coming to a team with 25 or 30 people. There's not as many resources, right? So you don't want to take all 25 of your team and bring them from the biggest business that's out there because like, they're going to be like, wait, who's doing that?

23:05Like, where's the team? What's happening? Right. But if you, if you couple a few of those folks, which is what we did with kind of like the scrappy direct to consumer, you know, just got started on the job and we're learning it all here. That to me is where like some of the magic happens. And so sourcing for us was an area in which we're like, we need deep experience now. How do we have somebody that really understands how to scale from a factory perspective? And so we were sitting in just the right spot when Walmart came knocking for us to be able to hit that scale. But it wasn't like a planned out, it wasn't like some plan that we had in place.