Create a product you’re passionate about, and success will naturally follow - at least, that’s the bestselling business book wisdom.
But for Daniel Marsden, founder and CEO of Lounge Underwear, that approach doesn’t always deliver. Learn how to market a product, he says, and you can sell just about anything if you have the right mindset, technology, and persistence.
“As we start to see a certain country naturally take to our product, we will then design a store around those guys.”
— Daniel Marsden — founder and CEO of Lounge Underwear
Marsden founded Lounge with his wife, Mel, six years ago. Since then, the couple has had no problem getting their products in front of the right people: The bootstrapped D2C company has grown from a UK-only business to operating in 11 international markets. It experienced its first million-pound hour in 2020, during one of the most challenging business climates in recent memory, and has expanded from intimates and underwear to leisure apparel and swimwear.
Speaking to Marsden, it’s clear how passionate he is about Lounge, and how his entrepreneurial intuition guides what he does. You get the sense that it’s this instinct - coupled with the groundedness of what is essentially a family-run business - that is responsible for much of the firm’s success.
How Lounge got ahead of the curve
Marsden got bit by the D2C bug well before it was a mainstream business model. When he was just 18, he founded a fishing tackle company, importing products from east Asia and re-packaging them to sell exclusively online. “The blueprint is very similar to Lounge, just completely different products and industry,” he says.
When it came time to build the underwear brand, that blueprint translated - as did the theme of being fortuitously ahead of the curve on big trends in business and ecommerce. From launch, Marsden and his wife relied solely on influencers for their marketing strategy, right around the time that influencers became one of the industry’s key proponents on social media.
Similarly, naming the company Lounge would prove prescient. A growing appetite for loungewear and leisurewear was also set to skyrocket in the fashion world in the coming years. Suddenly, influencers layering cosy sweats over delicate lacy intimates on Instagram was perfectly on-trend - and consumers could browse and buy both from Lounge with ease.
“The way we built Lounge was backwards,” Marsden says with a bemused smile. “We had the perfect marketing strategy on social media to guide how we could actually get our product in front of people.”
Today, Lounge is enjoying steady, sustainable success. Rather than trying to execute on a pre-formed thesis of where the company might be a good fit outside the UK, it allows organic engagement with its influencer campaigns to lead the way. If the company works with a British influencer, for example, and finds that person’s French followers are responding enthusiastically to a sponsored post or product, they use that as evidence to launch into action.
“As we start to see a certain country naturally take to our product, we will then design a store around those guys,” Marsden explains. “So it will be a localised store with their own languages, better shipping options, and in their preferred currency. We will then tailor a market strategy around that. So it’s just a totally natural occurrence. It’s almost like the customer has to come first and then we will build it around them.”
Mollie and Lounge: a ‘no brainer’
An early international success for Lounge using this method was in Australia in 2018. All the models for its original product shots and campaigns hailed from Down Under, which meant there was already buzz in that market. But Marsden has also been surprised by the firm’s natural success in mainland Europe.
When expanding into the Netherlands, Marsden wanted to create a seamless payment experience for his Dutch customers. He found exactly what he needed in Mollie’s localised payment solutions for markets across Europe.
“iDEAL is really popular in the Netherlands,” he explains, “but, being from the UK, I’d never even heard of it. Doing research off the back of that, I obviously found Mollie. I still implement all the payment gateways, we’ve been through quite a few over the years and normally they’re an absolute nightmare. Through Mollie, I got a plugin with Shopify and it was really easy.”
When it comes to expanding to other European markets in the future, using Mollie’s offerings to ensure the customer experience feels native and reassuring at the point of sale is a “no brainer,” Marsden says.
Know your customer
Despite identifying as a luxury high-end brand, there is a humility and focus to Lounge’s marketing approach that may account for its steady ascent over the last six years. Being able to bootstrap the company with a starting investment of just £1,000 and no external funding is something Marsden remains “particularly proud of”.
So far, they’ve preferred to retain the better cash flow, deeper customer relations, and rich customer dataset that you get from being a D2C, rather than scaling up or expanding into wholesale or brick-and-mortar retail. The company has also remained focused on not devaluing the brand by running endless promotions, sales, and discounts to drive revenue.
“We have been really conscious of not getting ourselves into a rut and running from sale to sale, which a lot of brands tend to fall into - especially when they’re experiencing tough times,” Marsden says. “Customers obviously pick up on it, and they’ll wait until the next sale. So we run three main sales a year now. I’m really strict on that.”
Other Lounge marketing tactics include a discount code for new customers in exchange for their contact information, and ramping up digital marketing strategies at the end of the month, when most customers hit payday.
A deep understanding of their customer base also helps, Marsden says. He explains how Lounge doesn’t always cater its big marketing opportunities, like Valentine’s Day, to the stereotypical shopper. “Obviously we see a massive spike on Valentine’s day, but it’s not always necessarily people in relationships - people will just treat themselves.”
Indeed, the success of Lounge offers a refreshing take on modern business. It proves that without all the hype, funding rounds, and hyperbole, it’s possible to grow and expand a D2C business into new markets while staying true to yourself and sticking to a consistent and disciplined marketing strategy.
“I think it also helps that myself and Mel have very normal lives,” Marsden says with a smile. “We don’t have lavish lives where we live on an island anywhere. We have essentially the same lives that we had when we started the brand.”