Supply and Demand of Iron Heart Products
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Does personal taste play a role? I certainly believe so. I find, and I'm sorry to say so, most of the current UHF butt ugly. The 335 was my take from the lineup, but that was about it. The 340 I probably would have taken if I hadn't bought a previous iteration of that design used on eBay before. I have the last two crazy check flannels from the years before, but the colours of the 336 make me cringe. Sorry.
I actually agree with you, to a lesser degree here. I think this seasons flannels was one of the most polarising of recent years, and also there were some similar colours (anny and other sax, for eg).
What I would like to know is whether or not customer interaction has ebbed off, from your point of view. I certainly have the feeling that it has gotten a lot quieter on here, but then I have not been around as long as the most of you. Does that also apply to customer inquiries on other levels, e-mails, phone calls whatever? What do the retailers say, what is their take on this? Are you able to discuss with them how other brands are selling in comparison to yours?
D2C customer interaction is not decreasing at all, and as @Giles said, first time customer sales are going up. Some retailers are struggling to move product this year, which is the first time I have head of such an issue. My take on that particular problem is that it is indicative of a wider economic issue globally, not Iron Heart per se.
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As for Iron Heart, the question of “throttling production” seems to beg the question, what is the long term plan?
I don't think that 'throttling' production is a good idea, and have no real interest in doing it. From an IHUK point of view specifically, in my eyes the main things that stand out as 'failures' this season are the UHFs. We have seen other, new and interesting things perform well (eg oiled N1 jacket), and core items continue to sell steadily. What we have seen this season, though, is a fuck ton of core product arrive mid FW22, after a long period of waiting. 21oz denim, 14oz denim, some shirts, jackets, etc. People only have so many $ in their wallets, and this year is a bit tougher than most for the majority of people.
On the UHF thing specifically, we have been trying to work out the demand globally for some products, and really have to do this through trial and error. Last year, UHFs pretty much sold out on our site in 24-48 hours across the board, leaving lots of people without. A lot of retailers also contacted us looking for more as they sold out so swiftly too, so clearly the total volume was slightly too low.
To counter that, we ordered a much, much (nearly double) higher volume this year, to try and gauge the ceiling. Whilst we now have a better idea of where the ceiling is, we also fucked up the numbers quite drastically.
Ultimately, part of what makes the UHFs special is their scarcity - I am very aware of this - but the only way to work out the ceiling on a demand sometimes is to push it way too high, see how high the spike goes, then adjust accordingly..
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@Alex and I have been discussing whether we have started making too much stuff, particularly this seasons UHF's.
We would love your opinions. Should we throttle supply - something that we have never consciously done, or should we keep trying to match supply with demand?
Is the issue around depth (how deep we order a particular product) or breadth (how many products we offer)?
I haven't done micro-economics since uni, but I think you'd be mad not to try and match demand. Or, rather, profits are maximised where you can match marginal revenue with marginal cost per item. So if you've got stock lying around, that's increasing costs in warehousing, etc, and may eventually lead to reduced marginal revenue if you're forced to discount them.
So when you ask if you went too "deep"… well you ordered too much stock when the marginal unit cost has overtaken the marginal unit revenue. Ask yourself, if you lowered the price to closer to your marginal break-even point, would they sell? If not, then yeah, you went too deep on those pieces.
Macro-economic forces will play a role in determining overall demand and supply too, of course, but from a micro-economics perspective it's the effect that these have on your marginal revenue/costs that matters.
As for breadth, I personally think you've got the overall strategy right. As I see it, you offer staples that come in and seem to move reasonably quickly, particularly in the most popular sizes, and then you do seasonal releases on top to introduce variety and keep people excited. (I was bummed that you weren't doing the cords in other cuts, but I note that some items from past seasons end up becoming staples and I live in hope for 888 cords... but I digress.)
Thinking about the UHFs, I don't think that the breadth was a problem this season - it was a good handfull of colourways in both shirt styles. I picked up 2 of them, the Anny and the Herringbone western, which I think is more than many would have gone for with your prices (not a jibe, I appreciate why they cost what they do, but they cost what they cost and are luxury items).
Like others have said, I thought this year's UHFs were a bit too loud, with colours that don't appeal to me. (I can't see myself going any 'louder' than the Anny shirt, it's just not my style.) I wonder if maybe you wandered a bit from the tastes of your core customers with some of them? But I might be thinking too personally... I know there are excited comments on some of the threads from past seasons' 'crazy check' UHFs, or those purple easy-shorts from over the summer, but there are some colours that I think are just too hard to make work with an outfit. Personally, I like having a wardrobe where I can grab any combination of tops and bottoms and know that it will work, and I buy things accordingly. If I were a style picker, that's what I'd be aiming to offer my customers, but that's just me and you guys will have a better idea of what your customers want.
Edit: P.S. I think this is a really interesting thread, and I love that the Crew interacts with us in this way!
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Some retailers are struggling to move product this year, which is the first time I have head of such an issue. My take on that particular problem is that it is indicative of a wider economic issue globally, not Iron Heart per se.
@Alex Interesting. Is that all markets (European, Asian, North American) or one more than others?
I'm going to use Canada as an example: In previous years I bought from IHUK directly because there were not any Canadian retailers to my knowledge. In the past, I had the majors (Burg & Schild, Self Edge, and Rivet & Hide) but always knew that product was limited and I only had a few chances to get a grail for the season.
Now I believe there are 4/5 retailers in Canada which I think is great for IH exposure, but now I know that if IHUK sells out, I have 5 other markets in Canada to possibly buy from as well as my goto International retailers.
My question is: Are you starting to reach a market saturation which there are now too many retailers in any given market and they are having to compete with each other? Most retailers are all offering the same services (some better than others), but there are many more options to choose from.
I guess the check would be to see if you are selling the same amount of product in general, but the sales are more spread out over a greater distribution of retailers.
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I’ll have been following the brand for a decade this year and as well as being a fanboy of the product, I’ve always been super interested in what sells, what doesn’t, and who buys. In addition to a dramatic increase in volume the output has developed in breadth and to a degree form. By this I mean the entire range, not just UHF’s.
I think part of the answer to the changes in the way the Marketplace works lies in the all the above, but also how the brand is perceived by its customer demographic. While there may be some crossover, the demographic of the forum (and by that I mean those who post), is not the demographic that is growing the most. The place where the crossover occurs is in the marketplace. And here lies the issue…
The fastest growing demographic is the 20-40, N.American based man, new to the brand doesn’t know about the IHSH-70 or the IHSH-101-BLK, and doesn’t give a fig either. For these guys (and this isn’t meant negatively), UHF’s are hot property. However, by and large, the current releases. Everything else is ancient history.
So the Marketplace was once used exclusively by the small, knowledgeable community who were aware of the brand. That has changed and is the partial reason for the change in buying habits.
The other thing is that previously these shirts were small batch. I used to think that was a deliberate strategy, but it wasn’t. Now that IH are in a position to go big on a wide selection of shirts, the rarity value is diminished.
When it comes to next years UHF’s, I think throttling back supply is a bad idea, but I expect that demand to level out and start dropping. Partially due to the global slowdown, but also because the hype amongst the aforementioned demographic will calm down. I could well be wrong of course.
If it were me running a successful global brand (which it clearly isn’t), I would look at producing one or two shirts less, but in the same sort of numbers. I don’t know what the economies of scale are like, but a more focused offering should cut costs while ensuring that the ones on offer are looked at more closely.
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This is an interesting discussion. But the numbers of it are less interesting to me than the implications for the collection. The integrity of design and fabrication is what really drives sales. But getting customers to understand what's informing the collections might take work. And whole collections are about ideas. The brighter colours seemed to me to be about coming out of lockdowns and living a more vibrant life. And yet the lookbook still was a bit domestic. The collections should tell a story, invent images, make feelings, etc. If it's about the brightness of life and the joy of luxury (I'm also thinking of standout pieces such as pale rider and perpetrators) that might need a crowded lookbook in a party atmosphere. Go decadent, opulent! All of this is to say that I am suggesting that for the numbers to grow, perhaps the storytelling needs more investment too. I've enjoyed seeing more social media content come out and I saw that IH was hiring someone to work on that more, so it seems like you're already working on that. That is cool. I think for more some new customers to get what makes IH so good they will need some persuading.
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not that anyone really cares about my thoughts, but I almost posted something like this a couple months ago when a comment was made by Giles? or someone that the reservation / notify me of restock lists are poor predictors of demand for an item. For me the reason why I've "flaked" on some (most) of these restock notifications is because they took so long, for whatever reason, and in that time, I found something else to take its intended place, often a similar item IH makes that released first that cannibalized the sale of the first item. (e.g. got a 14oz jacket b/c 19L's are still not in stock, got a kersey b/c the uhf i wanted was out, etc)
Where this led me, and what I was going to post back then, which is perhaps fitting in this thread, is that it occurred you all may have too many items, in too many cuts, in too many fabrics, colors, styles, etc etc. The permutations add up quickly and don't usually seek to meet the baseline demand of your "core product" and in some cases actually dilute your ability to meet demand by using limited amounts of fabrics on these different permutations. The things you wish to be defined by, other than amazing customer service, should always be in stock or always soon due so that anyone wanting to join the club is only a couple of weeks out. Perhaps this could be something like keeping XHS and 21oz in all of your jeans ready to go, or whatever makes sense for you. I recall someone again from the IH crew making a comment about limited fabric qty on high demand items during the sale and how those were excluded, so that's where this thought came from as well.
On the other hand, focusing on these core items and giving priority will detract from your ability to try new things to keep existing customers from buying more and also attracting new folks with what's around the corner for FW or SS. I get that too, but this past season seemed to be flooded with options. Personally I was amazed at the capacity given what I thought was the case and also confused by why some things I've been waiting on are still not in stock.
I guess the TL;DR here is to do less / make less so you can focus on what makes IH, IH. Maybe this post is a bit extreme, but in general this was inspired by other Japanese hobbies (tenkara, natural sharpening stones, knives, deep sea jigging) where they seek to do the absolute best with the minimal amount of whatever.
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Anyone from IH can correct me if I’m wrong, but I think the limitations on keeping core items like 21oz denim in stock at all times is due to the factory’s ability to weave the denim in the first place. Then once a batch of denim is made, this has to be spread across so many cuts to keep everyone in jeans that fit, it’s been a constant battle to rotate the denim they’re able to weave among the patterns that are most needed at any given time.
I’m sure there’s more nuance to it than that, but we are dealing with special fabrics that are being made in smallish batches by small factories. Only so much growth can be accommodated.
Sent from my iPhone using Tapatalk
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Ann, 100% correct. But it is (of course) more complicated and nuanced than that, Alex and I recently offered to pre-buy a shit load of denim and have it stored, so that we could get it into the workshops quickly, rather than wait for the denim to be woven, our answer "that is not how we work" - it was a brick wall conversation…..
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Yeah I think they'd love to have all of the core denims available all the time, but that was hard even before the pandemic.
My previous musings aside, I think my core feeling is that everything feels pretty alright at the moment in terms of breadth and availability. There's always something I want that isn't available and I have to wait, but whenever it arrives, it's a nice feeling.
But yep, it all feels pretty Goldilocks. Any more items would probably be overwhelming, any less might feel a little boring.
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Yeah I think they'd love to have all of the core denims available all the time
And plenty of production capacity in the workshops…....
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Just adding my two cents as a customer since 2017, and lurker since 2015, who has purchased a number of UHF shirts.
I alas agree with others on the UHFs that the issue is obvious and fundamental: they're ugly. I find the shades of green and blue really odd - neither dark, nor light.
It might be a different story with the nicer shade of (emerald?) green that was used on the 203/206. I should add that I would snap up a 264 emerald green/black ombre in a heartbeat.
Could an issue be the lack of pattern symmetry at the front? Not all previous collections have been fully symmetrical, but these stand out to me.
It is the main reason I opted against the 335. Great idea and nice colours but lacking in final execution. I hope slow 335 sales do not dissuade you from making more herringbone UHFs - there's so much potential there.
With the ombre shirts, 180, 203/206s, and 230, the patterns line up better with shirt when it is buttoned up. These are much more appealing designs, in my view.
The front of the garment is the customers' first impression. The 336/342 and how the white doubles up clumsily at the front, it is a surprising lack of attention to detail. I concede that I am fussy, and usually opt for less loud designs. However, IH also prides itself on the details.
On non-UHF garments, and looking at the outlet, I think you could reduce your outerwear offering, with more focus on your own icons.
Outside of the denim jackets (including rider's jacket), no light cotton piece of IH outerwear has ever done it for me. But I could be wrong, I don't have access to the sales figures, of course.
I also snapped up a IHW-11 at full price and was surprised to see it end up in the outlet. So what do I know. No regrets on that one, by the way. I hope that my comments are read as constructive as I intended. Thank you.
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Does personal taste play a role? I certainly believe so. I find, and I'm sorry to say so, most of the current UHF butt ugly. The 335 was my take from the lineup, but that was about it. The 340 I probably would have taken if I hadn't bought a previous iteration of that design used on eBay before. I have the last two crazy check flannels from the years before, but the colours of the 336 make me cringe. Sorry.
I actually agree with you, to a lesser degree here. I think this seasons flannels was one of the most polarising of recent years, and also there were some similar colours (anny and other sax, for eg).
I do check the R&H Sayonara page more often than is probably healthy, and a number of loud shirts from a variety of brands have been sitting there for a very long time, in a range of sizes, at a steep discount too. So perhaps something a number of brands will be revisiting.
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It's wild that you even have the option to "throttle production" in this economy but speaking purely from a business perspective, given your growth, "if it ain't broke, done fix it"–why even entertain changing anything if the growth is what it is?
If the Outlet starts getting crowded, maybe then, but I wouldn't let "collectors" (myself included) influence my operation if I were you. It sounds to me like you don't need my help
Plus, the weirdos on this forum are likely outliers anyway.Speaking for myself, if the UHF drops were more spread out, I'd have grabbed this season's herringbone, and the more people who have a garment that makes them happy, the happier I am (don't care at all about scarcity--quality and aesthetics are my only criteria).
Imagining that you'd rather have a broader selection of fewer items that you have to warehouse for a shorter period of time than a deep selection of fewer items that it takes longer to get rid of, I would think the answer is to err on the side of diversity over depth of products, and maybe that's why we're seeing more UHF models (maybe I'm wrong about that)?
Why do you care to ask this question? Why does the secondary market matter? Is the concern long-term brand cache? Or is this a simple matter of curiosity?
Nice of you to ask, either way
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Pure curiosity, and really wondered if anyone had any additional input to give.
We entertain changing anything, all the time and at any time if we think it will make a positive difference. To customer experience, to our profit, or more product going through the workshops, we don't really care as long as something gets better.
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@Alex has already explained that we decided to go very long this season on UHF's to see what the current ceiling is. We have a lot left in stock, because we went far too long, but at least we now have decent data about what we can sell. When we don't make enough, we have no idea if we could have sold 1 more, 10 more, 100 more or 1000 more.
Ultra Heavy Flannel sales are up about 20% on 2021.
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Why do you care to ask this question? Why does the secondary market matter? Is the concern long-term brand cache? Or is this a simple matter of curiosity?
I don’t know the answer to that question, but perhaps something to do with buying patterns and the perceived value of UHF’s? When they were in limited numbers, shirts became “classics”, “grails” etc. That isn’t a dynamic anymore due to the increase in availability, not only through IHUK but through an increasingly large network of retailers.
A few years back after TFH folded I said to Giles, “you’re the only game in town now”,’ in reference to UHF’s. To a degree that is still the case, although I sense that UES flannels are getting some traction. UHF’s rarely end up on sale, when they do it’s outlying sizes. Would it hurt perception of the brand to have their increasingly iconic UHF’s reduced in price on a larger scale? Is it better for the brand to have sought-after “grail” items’again? I don’t know, but that may be part of the conversation. Heavy hangs the head that wears the crown.
EDIT: started writing this before Giles posted and finished and posted it afterwards, without seeing his answer.
