Shakespeare once asked: What’s in a name? Jeremy Cai, founder of the e-commerce site Italic would answer, quite a lot.

Italic launched in 2018, stocked with goods produced in the same factories that make products for coveted labels like Burberry and Prada. The concept was simple: offer luxury-calibre goods at more affordable prices, and consumers wouldn’t mind the lack of prestige branding.

The reality proved more complicated. Some shoppers were initially underwhelmed by the site’s selection, especially since Italic required they pay a membership fee. Others just wanted their logos.

“When we initially launched, I actually thought [the connection to high-profile factories] was enough to sell the product,” admitted Italic founder Jeremy Cai. “But as we’ve grown, we’ve developed a much better understanding.”

Italic is part of a wave of start-ups built on the premise that quality and price will trump branding in the competition for consumers’ hearts and wallets. Few Moda sells dresses made by the same manufacturers as Reformation and Lululemon. M. Gemi, a footwear brand, touts that its shoes are made in the same Italian factories as Jimmy Choo and Aquazzura. The shoe label Sarah Flint highlights its relationships with Italian artisans.

Leaning on the cache of well-known names may seem like a fast track to brand building, and the lure of luxury quality at affordable prices is effective in getting consumers in the door. But convincing customers to keep coming back has proven to be more challenging. Italic dropped its membership fee, then later revived it. M.Gemi closed its first permanent store in New York’s Hudson Yards after just a year. Brandless, which sold household essentials and attracted nearly $300 million in funding, shut down after less than four years in 2020.

To build a loyal customer base, these start-ups may need to develop brand identities of their own.

“They’re borrowing equity from those luxury brands,” said Mary Zalla, global president, consumer brands at brand consultancy Landor & Fitch. “But strong brands build experiences beyond the product, that stand for something and mean more than just the mere construction of a garment.”

What Are These Brands?

“Brandless” brands mark a return to form for direct-to-consumer start-ups, which started out a decade ago marketing themselves primarily around their ability to offer lower prices by shipping directly from the factory.

They also saw an opportunity in traditional manufacturing hubs, particularly in Italy. Some labels were moving their production to countries where labour costs were lower. Factories and skilled craftspeople who made high-end heels and handbags needed new customers.

Companies like M.Gemi and Italic also put their suppliers at the centre of their story, giving factories a connection to the end consumer, sometimes for the first time.

On Italic’s website, beneath every product, it reads “made in the same factory as,” followed by a recognisable brand name. $95 cashmere sweaters were stitched in the same place as Sandro’s $295, while a leather trenchcoat shares a point of origin with some of Alexander Wang’s apparel.

Few Moda similarly displays the manufacturer below each item, showcasing a connection to Reformation and Armani. On M.Gemi’s website, it says that the brand “crafts our shoes in the very same workshops as Jimmy Choo, Prada, and Aquazzura, in the same age-old ways.”

“When I was standing in those workshops, I was able to understand that we weren’t just saying similar to those brands, but literally made by the same hands as those brands,” said M.Gemi president Cheryl Kaplan, who founded the company with Maria Gangemi in 2015. “It gives a whole different level of credibility.”

“Strong brands build experiences beyond the product, that stand for something and mean more than just the mere construction of a garment.”

Borrowed Equity

The “made in the same place as” formula meant there was less legwork to convince consumers that Italic’s product was worth buying, Cai said.

“The connection to luxury manufacturers, while powerful and certainly helpful, wasn’t enough to convince a customer to trust an upstart brand,” he said. “But discussing the specific materials used, hardware, and construction built trust.”

Also as time went on, Cai realised Italic needed to pay greater attention to things like design and price point. Certain bags and accessories, he said, had too “niche” of a design, and a price tag that was 15 to 25 percent lower than competitors — not quite enough to wow customers. In turn, they dropped prices and discontinued the products that didn’t hit the mark.

“We saw a strong lift in conversions corresponding to stronger pricing, so long as it didn’t tarnish the brand or come across as disingenuous,” he said.

Some consumers may see Glossier, Everlane or Rothy’s as one in an endless series of DTC brands, but plenty of others develop a strong enough affinity not only to buy their products, but also tag them on social media or cover their laptops in stickers featuring their logos.

“Even amidst the pandemic, there’s no shortage of a desire to still find identification as a consumer in the logos that you display on your body,” said Aaron Orendorf, vice president of marketing at Common Thread Collective, a marketing agency. “The outlet an item’s from still has to have clout.”

In other words, successful brands need a foot in both worlds, connecting with customers on the merits of their products and via their corporate identity. The “brandless” brands and mainstream DTC brands differ mainly in which side they emphasise to customers.

“If the only reason they’re going to be successful is because of that badge, I don’t think that’ll work,” said Goldberg. “But there’s a bunch of reasons, they can be successful, if they have designed better products at a lower price point, and there’s evidence people are willing to wear new brands, then you could build that company.”

First Members, Then the Masses

One area where these brands follow the DTC playbook to the letter is in putting “transparency” front and centre in their marketing.

At M.Gemi, Gangemi uses Instagram to show how products are made, and explain why they’re special beyond their connection to well-known luxury labels. Sarah Flint has its Italian production manager, Mattia Brunello, host videos on everything from suede shoe care to cooking tutorials.

Cai is open about Italic’s business, writing posts for Medium that give a behind-the-scenes look at the brand, such as why they lost money manufacturing their candles. He also crowdsources consumer opinions from a 4,000 member Facebook group.

The true test of whether all this disclosure has fostered a connection with consumers is whether they’ll think to come back after completing their purchase. That’s particularly important for Few Moda and Italic, which charge a membership fee that’s meant to encourage recurring purchases and pad margins that are slimmer without the luxury markup.

Italic offers a wide variety of products, from sweaters to towels to cookware, which Cai said is meant to broaden the site’s appeal. A customer who wants the Prada logo on their bag might not mind a brandless kettlebell or candle.

And for those who live and die by those logos? They might be out of reach, said Landor’s Zalla.

“If you’ve got a consumer that is more interested in the brand badge and ... can’t afford the real thing, they’re probably more likely to buy a knockoff,” she said.

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