High-Tech Men’s Underwear at $70 Disrupts Sleepy $8 Billion Category
The office, in lower Manhattan, has all the markings of a tech startup. There are high ceilings and a cool warehouse vibe, craft beer is on tap in the kitchen, and the place is buzzing with twentysomethings.
But they aren't trying to make the next hit mobile app. The big idea here is to disrupt another ubiquitous product.
"There were so many evolutions in technology, but underwear was stuck in, like, the early 1900s,’’ said Tom Patterson, founder of Tommy John, which makes premium undies. “It was a very sleepy category."
Tommy John is part of a growing drive by fledgling brands to get men to rethink underwear and pay more for it. It isn’t easy. The $8 billion category—the subject of the latest Material World podcast— has long been an afterthought. Many guys restocked only after ridicule from a significant other, or when disintegration could no longer be denied. Thanks to fellow upstarts such as Mack Weldon, guys are giving this everyday item more consideration.
Skivvies ranging from $25 to $70 a pair now come with a list of features as long as those that once came with lawnmowers and television sets. They are “game-changing products,” with moisture control, cool zones, and stealth waistbands. They can be Swiss-made, breathable, anti-microbial, and anti-odor. Tommy John even reconfigured the front flap and developed a “Quick Draw” fly for easier access.
All this has boosted spending. In the past three years, the average price for a pair of underwear in the U.S. has risen by a third, while prices for men’s apparel overall have declined by about the same amount, according to research by Fung Global & Retail Technology and First Insight. Global sales are expected to increase from $8.4 billion in 2015 to $11 billion by 2020, according to Persistence Market Research.
The disruption is a testament to the power of “premiumization,” a strategy that over the past decade has swept through many once-mundane categories.
While many take it for granted, there was a time when grocery stores didn’t have a dozen kinds of coffee. When the only consideration for buying ground beef was price, not what the cows ate. When a workout shirt was a cheap basic, far from the innovation story shoppers pay more for today. People never used to talk about how much they loved such things as water bottles and blenders.
Now men’s underwear, of all things, is being transformed.
Premiumization is all about resetting expectations with additional choices and benefits. Under Armour Inc. revolutionized workout gear with polyester shirts that made sweat evaporate better than cotton did. Starbucks Corp. became a behemoth by introducing a slew of new tastes and styles to America’s coffee drinkers, whose choices had stopped at sugar, milk, or cream.
“Because this happened, it doesn’t mean everything will be disrupted,” said Adam Burgoon, a partner at investment fund KarpReilly, which owns a stake in Mack Weldon. The size of the market for such refashioned underwear remains to be seen, Burgoon said, because many guys are likely to balk at the price. “But it means probably everything can be disrupted,” he said.
Men’s underwear was especially ready for a change. Not only was it largely devoid of innovation, such industry leaders as Calvin Klein were mostly focused on winning over women, because they bought most of the underwear. It was primarily a fashion business with a buffet of patterns and colors. The marketing featured images like Calvin Klein's buff young Mark Walhberg up on billboards, and packaging showing expressionless youngsters with six-pack abs.
Yet men were settling down later in life, and so doing more shopping on their own in the interim. Being single longer made them care more about their appearance, which has disrupted other categories, such as skin care and jeans. The underwear startups’ marketing is more approachable. Some of it uses middle-aged models and pushes fun and honesty over sexy slickness.
“I never really related to traditional underwear advertising,’’ said Patterson, the Tommy John founder. “It was too serious. It was weird. We just say it like it is. We’re the first brand to have a no-wedgie guarantee. You’re not supposed to talk about wedgies with underwear. The fact of the matter is that 100 percent of men get a wedgie at some point in their lives."
Patterson got the idea for Tommy John last decade, from a much different place than sexy. While wearing a suit as a medical-device salesman, he found his underwear was even more uncomfortable than usual. He set about to solve a problem, not to go wild with beefcake and polka dots.
The early years were difficult. Direct selling on the web wasn’t as viable, so he had to pitch department-store buyers, who were mostly women. Patterson's break came in 2009, when he won over Neiman Marcus by getting the woman who ran underwear to let her husband and male colleagues test his product.
From there, the idea of selling men’s underwear to men gained steam and has exploded in recent years. There’s been a rush of startups, helped by lower barriers to entry. Sourcing from Asia has never been easier, and the internet has slashed marketing costs. That has allowed brands like Mack Weldon to sell only directly, through its website.
Today, a majority of men’s underwear is purchased by men, a reversal from a decade ago. Amid a dizzying number of choices, men are indulging: Tommy John and Mack Weldon each more than doubled sales last year.
Young brands are also going beyond products and revamping how items are purchased. New York-based Basic Outfitters offers a ‘’create-a-drawer’’ option that makes things really easy for guys by offering underwear, socks, undershirts, and joggers in one package for $60.
“Men really are rethinking what they want,’’ said Matthew Congdon, Mack Weldon’s creative director and former top underwear designer for Calvin Klein. It used to be about “an oversize logo or a slicker pattern or print,” he said. “Now it’s about innovation, the fit, the fabric, and the waistband. Something that is for him.”