Retail 2.0

Nau, a new apparel brand, offers sporty, chic clothes and a novel online/off-line business model, along with a focus on community action

by Olga Kharif

Buyers can browse the regular bricks and mortar storefront of Nau, but receive 10% discount (and free delivery) if they order goods at instore web terminals. Courtesy of Nau

Nau's color palette won't change much from season to season, and the modern, elegant cuts are designed to go from the mountain to a hip café. The idea is to reduce the amount of clothing a person needs. Courtesy of Nau

Nau's clothes are made from custom environmentally-friendly fabrics and non-toxic dyes. Its polyester-based clothes are recyclable, while the rest of its garments, made of cashmere or merino wool or organic cotton, are designed to be biodegradable. Courtesy of Nau

Story Tools

• post a comment
• e-mail this story
• print this story
• order a reprint
• digg this
• save to del.icio.us

A few months ago, a dapper, 57-year-old named Chris Van Dyke arrived at the Hilton Hotel in Portland, Ore., for the Venture Northwest conference, where he planned to pitch his new company, Nau. He carefully set up his booth only to see an attendee mistake the exhibit for a coat rack and proceed to hang up his coat. In a way, it shouldn't have come as a surprise: Nau is in the apparel business, while the conference was dominated by technology startups.

Yet Van Dyke wasn't really as out of place as he might have felt. His Portland-based company aims to revolutionize retail by merging the brick-and-mortar and online shopping experiences. When Nau opens its first four stores in Boulder, Seattle, Chicago, and Portland this spring, customers will be able to try on the clothes—a sporty-chic line of jackets, T-shirts, sweaters, pants, and dresses that sell for $45 to $350 apiece—and then either buy them outright or order them online, using an in-store terminal. Buyers using the "Webfront" option, as Van Dyke calls it, will get free delivery and a 10% discount.

The online price discount is one of several ways that Nau aims to be a different kind of retailer. Webfront shoppers will also be able to donate 5% of the price of the purchase to one of 12 non-profit groups. "Every single customer will be engaged in the giving process," says Ian Yolles, the company's vice-president of marketing. With pages taken from the playbooks of Amazon (AMZN), JetBlue (JBLU), and Patagonia, combined with a few ideas of its own, Nau aims to become a chic, stylish and socially driven national clothing brand.

Mix and Match Sales

Of course, Nau's ability to do good hinges on whether consumers will forego instant gratification in favor of the Webfront approach. Here, briefly, is how it would work: When a customer wants to buy a garment, she takes a card bearing the product image, name, and barcode from a holder sitting on the display shelf or attached to the garment bar. The shopper scans the card at the Webfront terminal, selects a color, size, and quantity, then enters a user name (registered shoppers will have their shipping address and billing information stored in the system), and presto.

Such hybrid retail/e-tail has never been tried in fashion before, though the startup's informal research indicates that as many as 70% of consumers might be swayed by the discount on purchases of $100 or more. Nau's current business model assumes that just 30% of buyers will chose to use Webfront in the first year of operations, but that the percentage will creep up. The in-store e-commerce effort is complemented by a Web site, due to launch at the end of February and expected to sell all 100 items in the company's line-up.

There are certainly plenty of signs indicating the Webfront idea might fly: E-commerce sales continue rising at double-digit rates, with Americans having spent $24.6 billion shopping online in the recent holiday season, according to researcher comScore. And last year, 63% of some 67,000 U.S. households surveyed by consultancy Forrester Research investigated purchases online.

Ahead of a Trend?

Of course, for many shoppers, online research of prices or customer reviews is the first step towards a store purchase. Others survey products in a store to decide which they want and then find the best deal online. In others words, for many consumers the Web and the mall are both parts of a larger shopping experience. "Nobody has really done anything to connect the dots and take discontinuity out of customer behavior [online and offline]," says Yolles. "Webfronts reflect how people actually shop."

If that proves to be the case, Webfronts could transform the retail industry in years to come. "It's an interesting approach," says Peter Kim, an analyst at Forrester. "I'm waiting to see if they can carry it off."