Building brand loyalty successfully

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Bruce Croxon (00:19): Welcome back to the Export Impact Podcast, brought to you by Export Development Canada, EDC. My name's Bruce Croxon and I'm the host of the Export Impact.

Today, we're speaking with an incredible entrepreneur who left a promising career in finance to launch one of Canada's most buzzed about direct to consumer brands. Robert Marzin is the co-founder of Manmade, a Montreal-based boxer brief company, founded in 2020 by four best friends. What started out as a modest idea to reinvent men's underwear, quickly turned into a national success story complete with a lively dragon's den pitch, celebrity endorsements, and a fast growing customer base on both sides of the border.

I’d like to begin today’s episode by acknowledging that we’re recording from my office in Toronto, which is on the traditional unceded territory of Many Nations, including the Missassaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat Peoples, and is now home to many diverse First Nations, Inuit and Metis. We value taking this moment to deepen the appreciation of our indigenous communities, wherever we are, and to remind ourselves of our shared debt to Canada’s First Peoples.

Robert, welcome to the Export Impact. We're really thrilled to have you join us today.

Robert Marzin (01:45): Thanks for having me, Bruce.

Bruce Croxon (01:47): You're most welcome. Listen, four childhood buddies toiling away in finance desk job nine to five or nine to six or nine to seven, and then you decided to all quit at the same time and start an underwear company. For those Canadians that don't know the story, why don't you fill us in on how that happened?

Robert Marzin (02:07): Yeah. I mean, we're four guys that have known each other since we've been five years old. For us, we were each in banking. Berto was a CPA, so he was working at one of the big four firms. Anthony and Phil were all working at banks and we're all different ones and doing different tasks. But 10 years into doing that, we felt that something was missing and we told ourselves, you know what? We all each have the entrepreneurial itch, the entrepreneurial spirit. Can we start something and can we start something ourselves?

And what was even more rare about it is that each four of us had different skill sets, if you will, that were complimentary. Now the problem was is just to figure out, okay, what's gonna be that magical product? And we went up to a cottage one weekend and we're like, you know what? Let's try to bang out as many ideas as we can to see if there's something there. And one thing that would always come up is underwear. And we'd be like, do you guys always have to adjust yours? And some of the guys were like, yeah. And then one guy was like, I don't even wear any because they're so annoying. So like, okay, hold on. There might be something here.

And that's when we decided to go out and purchase all the different types of underwear and try to learn everything about the fabrics and the fits because already like we didn't really do that before. What we learned was by buying everything on the market from five to 50 to even $100 pairs, believe it or not, there's actually $100 underwear out there. We saw that the main culprit was the fact that most men were either wearing two types of fabrics, cotton or polyester. Cotton stretches out at the end of the day so it doesn't leave you supported. And polyester is a derivative plastic, so it actually traps heat moisture and it's not really ideal.

What we did find was a fabric called modal, source on the beach tree. What's cool about it is that it's breathable like cotton, but the caveat here is that it doesn't stretch out at the end of the day. So it remains like when you first put them on in the morning all day. And then we went further and we decided to start designing our own pair. Easier said than done. We thought it would probably take us a few months. Ended up taking us a year to design it so that it contours the male genitalia, which a lot of boxer briefs don't; usually they're just flat. And by doing that, we noticed that we had no more BSDL or sticking or anything like that, and then we had to figure out how to market it. Then selling underwear online, let me tell you, is hard because people can't feel it.

Bruce Croxon (04:30): Well, exactly, and I'll circle back on that and some of the challenges that the category brings with it, but I'm curious about still on the four buddies getting into business together. For those of our listeners who are entrepreneurial minded, the pros and cons of doing business with people you know that well. Are you guys still as good of friends today as you were when you started? Has the friendship remained intact and would you advocate for four people that know each other that well, in hindsight, going into business together and I'm assuming each one of you brings something different to the table. And I asked partly because you know, I started a company with my best friend with two other best friends and I've got a list of pros and cons as well, but I'm happy to say our friendship is still intact, but how's it going for you?

Robert Marzin (05:20): It's a great point because I think with partners you can go four times faster or four times slower and what kind of helped us is that we've known each other since five years old. It took some time to learn this, but because it's like a marriage and we're all in relationships, like since we were 16, 17 years old and we married those significant others, one big thing that we learned is if you are going to accept someone's strengths, you need to accept their weaknesses too.

Our weaknesses over time have gotten very clear and so have our strengths and arguments often come about because of someone's weakness. And I find that's kind of been like our secret of success, if you will, is really to make sure that you're caring about these weaknesses and making sure that hey, back off over here. Like everybody has a strength, focus on that.

Bruce Croxon (06:09): And it stems from being comfortable enough to admit what your weaknesses are to each other. Right. You know, which I guess as friends could be easier or harder depending on what type of friendship you have, but No, that's good to hear you guys are making it work so well.

Robert Marzin (06:24): Yeah, and I mean in terms of are we still the same friends? Well, we see each other a lot now, much more than other 35-year-old buddies. Right. So I mean usually after work we'll spend more time with families. Our friendship stems pretty much at the office at this point.

Bruce Croxon (06:42): So listen, I was looking back over your history and noticed that you did have a pretty successful pitch on Dragon's Den. Looked like a lot of fun. As you might know, I spent three years on the show and I remember maybe it was just in that particular timeframe there was a lot of underwear brands that were trying to launch and get going and my line was always, I didn't care enough. So I was a Stanfields user and it would take a lot to get me off of the Stanfields brand.

But on the topic of just how competitive the category is, what is it do you think about you guys that's been able to break through? Is it the type of market that once you get a user, do people tend to be loyal in the underwear category? It's tough to get people to switch once they've become accustomed to something. What's been your experience in a uber-competitive market, obviously?

Robert Marzin (07:36): Yeah, I mean what ended up happening on the show is actually that we did get offers, one of which we accepted the deal didn't end up going through, but they were saying how many times does a man really buy underwear? And once a man usually buys his underwear, well, he doesn't really switch and it's true. But our thesis was that if we could really push on the pain points, and I think this is true for any product out there. You have features and we used to be in sales before, so this kind of help is a lot of people when they're pushing, they're pushing the features of their product. But for us, what we focused on is the problem. And we said if we can get to the psychology of whether it be the man or woman and and really focus in on the problems that would kind of entice them just to make that first purchase, that was our goal, just get someone to try them. Because what we were thinking was that once someone tries them, it's very hard to wear what you were wearing before.

And lo and behold, that's what happened is someone would buy one or two pairs and come back and buy our seven pack. And from there to build a viable businesses, we saw that other parts of clothing had the same issues or different types of issues. So that's when we launched a t-shirt, you know a t-shirt that doesn't stretch out that the collar stays in place, that doesn't shrink when you put it in the dryer or pants that you can wear pretty much anywhere to the gym, a night out or just chilling at home. So really building a brand that's more function and problem-solving oriented. That's why we don't have a ton of different colors, prints or styles.

Bruce Croxon (09:10): How many skews do you have? I noticed you had socks, which makes sense to me. So you have t-shirts, underwear, socks, and I think a hat, right?

Robert Marzin (09:19): We have Toks, we have swim shorts, we're coming out with a sweater, we have a jacket coming out, the polo coming out, but the only come like in white or black or black and blue, right? So we want be the core of the men's wardrobe and I mean we're not smart enough to handle a thousand SKUs to be quite honest.

Bruce Croxon (09:38): Hey listen, most of us aren't smart enough to choose a color every day. So I'm actually totally bought in with that strategy; makes a lot of sense to me. What did the Dragon's Den exposure do for you in Canada?

Robert Marzin (09:51): Yeah, it added credibility, like 1000% because especially when you're marketing online, there's so many fly-by-night companies that you kind of need that approval. If you've gone on Dragon's Den you can say that hey, we've been approved by the gurus of business, if you will, in Canada. So we've been running with that. Still to this day we have a post-purchase survey and I would say at least five to 10% of people say that they first saw us on Dragon's Den.

Bruce Croxon (10:19): Nice. Now listen, from what I've been told, your primary market now is the United States though. Makes sense, right? Much bigger market, A lot going on down there right now and you know the US trading relationship with the rest of the world, Canada not excluded. You've got inflationary pressures, you've got tariffs on tariffs off, which I wanna get to and how you sort of navigate those challenges. But take us back to the beginning of your sort of export journey. What did your initial steps into the US market look like? What was your approach, what was it that got you to launch down there? How was it in the early days?

Robert Marzin (11:02): So right now actually our major market is Canada. We're about 90% Canada. We used to be 80% and 20% in the US and our goal was really to win at home first, especially in Canada, it's underserved when it comes to let's say the type of products that we're selling. In the US there's so much options for the consumer. But what we did was we ship everything ourselves. So we have our own three PL here in Montreal and we ship into the US with the de minimis rule, which is section 321 under $800 you could ship into the US duty free.

Now with the changes that came about, we had to take a complete like 180 and decide to have a three PL in the US. So for the first time ever we have a third party logistics company that we're gonna be working with, we're launching in September with them. And that was mainly due to the fact that we had to move fast. Our ideal goal is to have a warehouse in the US that belongs to Manmade, have workers in the US that are employed by Manmade, but that's gonna take a lot of time.

Bruce Croxon (12:09): Have you looked at any other regions outside of the United States given the uncertainties there?

Robert Marzin (12:16): We did, but we just felt like because we already have a portion of legwork done, I mean we have that 10, 15% or so already in the US which is still a good amount of volume. We figured if we could have a good partner, it's probably the fastest way to get up and running. But I mean the UK I think would be pretty easy or even France because we do marketing in English and French as well could be an alternative if the three PL in the US, I mean the experience is good, it'll give us a bit more confidence to work with a three PL going forward. The caveat is that still to this day, we have handwritten cards with every order and for the first time we're gonna have to give that up in the US because of the three PL partner.

Bruce Croxon (12:57): Yeah. When you look at your business sort of over the next couple of years, I'm assuming that you're looking to the US for a good chunk of your growth though, right?

Robert Marzin (13:07): Yes.

Bruce Croxon (13:08): Do you anticipate exchange rates or how do you handle the fluctuating dollar and that kind of thing? Does that factor into your day-to-day decision making?

Robert Marzin (13:17): Yeah, so because our US sales right now are less than the cost of our goods, which are all in USD, we have to have futurist contracts or actually forwards where we could book. We book about 12 months in advance for the difference that we're missing just to make sure we don't get hit on currency. It's been so volatile, like you could lose five, 10% or increase your cost by five 10% easily. However I think next year, US will probably represent 40% of our sales and that should be able to cover our COGs.

Bruce Croxon (13:49): Is that your way of saying that you source most of the material from the US to make your products?

Robert Marzin (13:55): No, we actually wanted to make it here, but unfortunately it wasn't possible. We make it in a wrap-certified facility in Sri Lanka and Vietnam.

Bruce Croxon (14:04): EDC is the sponsor of this podcast and I'd love to ask anyway because I know they've been so helpful for so many of the businesses I've interviewed in this series. How has it been for you working with EDC, how have they supported you on your export journey and are there any specific programs or resources that have made a meaningful difference to you guys?

Robert Marzin (14:26): Yeah, actually EDC played a big part because getting financing or getting a line of credit as an online company with no track record is close to impossible. And what banks look at is some sort of collateral, right? Specifically either inventory or purchase orders. So if when you're selling direct to consumer and the bank's asking you, so how many purchase orders do you have and what's your lead time? We're like, well our lead time's six months and we're buying based on what we hope we could sell. They're like, well I don't know if I'm comfortable taking that risk. And they're like, how much experience do you have in this? And you're like, well a year; it's impossible.

So the EDC actually guaranteed the line of credit. So they have a product where they ensure it, the banks are able to take less risk on it. They were the reason why we got our first line of credit with RBC.

Bruce Croxon (15:18): That's beautiful application of what they offer. Very timely, I'm sure. Are you still 100% D two C? For our listeners, D two C is an acronym for direct to consumer as opposed to being in store. The only way to buy Manmade presumably is online.

Robert Marzin (15:35): Yep. D to C. So we're planning on opening up our first flagship store in Montreal (15:42placeinFrench)  which is a suburb of Montreal, it's one of the busiest malls here. We have a very good location that we're proud of and the thesis is that when shopping online, only about 50% of people buy their clothes online, another 50% buy in store. So we're gonna test it out and see in that region. If we're able to double sales, let's say just with this store and if it's new customers and if it does work well we wanna roll out across Canada and then copy paste that model into the US.

Bruce Croxon (16:10): Outta curiosity, if it works in Montreal, what's your next most logical market? Where do you sell the most underwear or clothing or whatever skus leading the way these days? Gotta believe it's still underwear, right?

Robert Marzin (16:22): Actually last year it was about 90% of our sales were underwear. This year we're about 50%.

Bruce Croxon (16:28): I'm hoping that's not so much because the underwear sales are shrinking, but the rest of the stuff is starting to come on, right?

Robert Marzin (16:34): So sales are up 3X year over year.

Bruce Croxon (16:37): Good for you.

Robert Marzin (16:38): So we're really trying to turn into a men's apparel brand instead of just an underwear brand. And it's looking like it's slowly starting to happen.

Bruce Croxon (16:47): While we were talking about just, you know how if the rest of the apparel sales are growing at a faster clip, then of course your proportion of sales relative to the underwear sales are gonna change, right? Which is a good sign. If it was just underwear in your established markets, I think you're right, people hang on to that, like how often do I order underwear? You know like once every four or five years. But if you can start selling me things like t-shirts and socks, it makes all the sense in the world as to why you made that pivot.

So listen, let's talk about your branding and marketing for a little bit. I did some looking around, it's funny, it's kind of cutting edge. You guys obviously don't take yourself too seriously, which you know, I think guys, when you're talking about underwear, really appreciate; commitment to authenticity is what comes through for me as well. How'd you decide on that marketing approach? Was that you guys just sitting around shooting the breeze or did you hire an agency? Has it changed over time as you've matured as a company, from when you started to now?

Robert Marzin (17:50): When we had first started we thought that we had to be like everyone else. We're like, okay, if the bigger companies are having success then we should do something like that. We hired actors, we hired models, we were going that approach and we weren't getting any sales. Like for the first three months we were doing like maybe five sales a day. The cost of our lunch bill would be more than the whole sales of the day until one day we got approached by the Montreal Gazette to do an article and the gentleman came asked us about our story and he's like, okay, it's time for the picture. My partner Anthony said, Hey do you mind if we get in our underwear and you can take the picture there? He's like, well if you're comfortable, then I guess so. And then Anthony asked him, you think we can be in the front page? He's like, well if there's nothing super newsworthy, let's say like any big event, then I guess we can make it happen.

Bruce Croxon (18:41): Depends, what's going on.

Robert Marzin (18:43): A few weeks later passed and he messages us and he says, okay guys, you're gonna be on tomorrow. The next morning comes, we look around everywhere finding a newspaper, which in today's day and age is actually very hard. We find it, we end up being on the front page. So at first we were super happy about that, but we didn't know how sales could be affected. We ended up selling out from that news article and selling all our stock and we said, what the hell was it with this article that just sold everything? And it was one, telling our story and two, not taking ourselves too seriously with our picture that we were in our underwear. And from that moment on we just stuck with that and ran with that. And our marketing has evolved with the same approach of just not taking ourselves too seriously and being different than everyone else.

Bruce Croxon (19:28): From the sounds of things, it's not like you gave up on the celebrity stuff because you've got great endorsements from former NHL players and other personalities. How have those partnerships helped you spread the word?

Robert Marzin (19:41): I think it comes with the same approach. So a lot of these celebrities were clients of ours. Like one of the Montreal Canadians players had placed three orders with us and we gave him a call. We're asking him, Hey, do you mind if you can make a video for us? Like just explaining your experience. He's like, yeah sure, no problem. And it did so well just because it's authentic. And then we did a couple TV commercials with them and they were phenomenal and it's just like that same goofiness. We try to just change it up a little bit.

Bruce Croxon (20:08): Yeah, no I think it really works. As we said off the top, no matter how well you guys have made this stuff and how comfortable they are, it's a hyper-competitive category, right? But it must be encouraging that once you do land a customer, I would imagine that you tend to keep them because it's just sort of the nature of the space. I also love, and you referenced it earlier in the podcast, you know when talking about how this might have to fall away as you get into the US but that personal touch you guys have built in with your customer service, handwritten notes, you know, custom thank you videos. How has that been received? What kind of feedback have you received about that and do you think it's had a big impact on driving your loyalty to the brand?

Robert Marzin (20:51): Yeah, well I mean for us we focus on three pillars. The first one is obviously a good product. We're insanely passionate about the products we produce. The second one is marketing, which we spoke about, and the third one is customer service. So we don't subcontract anything, we do everything internally including customer experience because for us is we always put ourselves in the customer's places, how would we like to be treated? And we often talk about the whole surprise and delight factor.

So when a customer orders from us, they get this cool email confirmation series from us, it's actually pretty funny. And then when they open up the bag, they get a surprise with a handwritten note saying Welcome to the family. And then on the second order they get a card that says Welcome back. So they're like, oh wow, these guys actually care about me enough to know if I came back. And third order, there's a little popup that comes out on the computer on the webpage saying, Hey, we'd like to offer you a free pair of socks for your third order. So like just these little things. If the first pair doesn't fit, like we got you, don't worry. We wanna make it right because we know once you have the right fit, you're gonna be a customer for life.

Bruce Croxon (22:03): Oh, that's great guys, it, it sounds like you've really thought this through and when I was preparing for this podcast, I found myself laughing out loud at the approach that you guys took and I think it really works.

Finally, really for other Canadian entrepreneurs looking to grow internationally. I know you're relatively young in the outside of Canada game, but you know, especially in the highly competitive direct to consumer space, because Canada's a great market, but as we know the US is a fantastic market, everything being equal. Do you have any advice from your learning so far that you could pass on to listeners that might be thinking about going into the States or struggling to get into the States or looking to get outside of Canada?

Robert Marzin (22:46): Yeah, I'd say like in terms of the States, what we've learned is the marketing that works in Canada doesn't necessarily work in the US. Something simple like my accent, I have a very particular accent. I'm Italian descent. When I speak and make a video in the US right away, there's almost a disconnect because I'm not like them. So what we try to do more and more is get American people that connect with the American consumer and also their humor is different than ours. So you really have to take time to study and test videos and understand, okay, what's working and what's not, and double down on what's working because it's not just as easy as saying, hey, this video's doing good in Canada, it's gonna do well in the US because it's not true.

Bruce Croxon (23:28): Alright, well listen, Robert, thanks so much for your time today. Really appreciate you taking the time and it's such a compelling story. I can't wait till the podcast comes out and whenever we can do to spread the word. It's a great Canadian success story. You guys should be so proud of yourself. It's not easy growing any business, but for four buddies to just up and quit and get at it and stick with it and sort of take some of the innovative approaches that you've taken. My hat's off to you, man. It's a great story. And say hi to your buddies for me. Can't wait to see you down the road.

Robert Marzin (24:02): Thank you very much, Bruce. And thank you for EDC.

Bruce Croxon (24:05): Thanks for joining us today on the Export Impact Podcast. If you enjoyed today's episode, we'd love for you to subscribe, rate, and leave us a review on your favorite streaming platform. Until next time.