How Five Four Club’s Subscription Box Business Model Works – Five Four Clothing Store

Certainly one of the most popular – and profitable – “mail-order” menswear companies anywhere in the world today, the Five Four Club was first conceived of back in 2001 and brought to life in 2002 as a way for men to get their hands on top-quality clothing options at a fraction of the price they pay for at a store, all delivered directly to their doorstep every single month.

 

And while sales were pretty steady from 2002 on through 2005 or 2006, the “Great Recession” from 2008 through 2009/10 really slammed the brakes on growth and force the company to reinvent itself all over again. It may have looked bleak initially, but Five Four Club has been able to completely transform their operation from top to bottom and become even more successful and even more profitable along the way, from Five Four Clothing stores to a subscription based business model!

 

Here’s a bit of insight into the business model that has helped Five Four Club become such a juggernaut in the premium menswear clothing space.

 

At its core, this is a “subscription box” kind of company

 

Subscription box companies have become very, very popular in the last four or five years, and for good reason. People are absolutely overloaded with options and choices when they purchase pretty much anything on a regular basis, and most people want nothing more than to limit the time they spend searching for new products and new merchandise (especially when it comes to skincare, beauty care, and clothing) without having to sacrifice quality along the way.

 

Five Four Club has become the answer for men looking to get their hands on affordable fashion pieces. Each and every single month, customers are sent between two and three different products – each of them curated to that specific customer based off of a customer profile that they have filled out before they became a member – and the total cost sits at right around $60 a month with free shipping.

 

Pull in leads from social media

 

As a direct to consumer company, Five Four Club does not do the same kind of institutional advertising you’re going to find “big box” brands doing on a regular basis. This is not a company with the marketing budget of Ralph Lauren, Tommy Hilfiger, or Calvin Klein – and they aren’t trying to be those companies, either.

 

Instead, this company built its customer base on social media. Taking advantage of all the amazing marketing tools that Facebook had to offer while also leveraging Twitter, Instagram, Snapchat, and Google marketing as well as positive reviews, Five Four Club was able to rapidly expand their customer base through positive reviews and laser targeting of online ads with a direct sales kind of approach.

 

This allowed them to increase subscriptions close to 93% over a three-month trial process, boosted their click through rate by 24%, and dropped costs for advertising by nearly 40%. All of this had a tremendous impact on profitability and has helped Five Four Club become a legitimate $100 million a year business with a lot of potential for growth.

 

Curated fashion sent to your home every month

 

As we highlighted above, Five Four Club has always been about curated fashion rather than just throwing together a couple of pieces of a specific size and hoping that their customers will enjoy them. This has helped to differentiate this subscription box company from the rest of the back. Customers get to tell Five Four Club a little about themselves, their style, and the kinds of clothing an accessories they are hoping to get out of this arrangement, and Five Four Club uses this incredibly valuable data to curate very specific boxes of clothing for their customers.

 

Unlike traditional e-commerce companies, this curated approach has helped Five Four Club dramatically reduce returns across the board. They have a very dedicated, very active, and very committed customer base which also becomes a very powerful asset for this company moving forward.