ELOQUII listens to customers and continues to grow, evolve


Three years ago, Steve Zawada would have sworn ELOQUII would never have physical stores. He was wrong.

“The business changes constantly,” says Zawada, the company’s co-founder and COO. “If you talk to me six months from now, something different is going to happen and we’re probably going to be on to that. But it’s all about listening to our customer because ultimately the customer is our boss, so we’re evolving as she evolves.”

An e-commerce company that designs and sells fast fashion apparel for women sizes 14-24, ELOQUII employs 130 people after four rounds of venture capital funding.

ELOQUII launched as a digitally native vertical brand of The Limited in 2011. The idea was to have a fashion brand that just happened to be plus-sized, because 67 percent of U.S. women wear size 14 or above.

“At the time, plus-size clothing was still a little bit taboo,” Zawada says.

Two weeks after the launch, Zawada was asked to step in as general manager. He cleaned up the inventory, turning the brand around. However, Limited stores weren’t doing well and Sun Capital Partners decided to divest all but the core brand. Zawada says investors were interested, so ELOQUII had its non-compete waived as part of its exit.

“We also had a huge outcry when ELOQUII was closed of customers writing in and bloggers saying, ‘You’re doing this to us again. Why would you take a fashionable brand away from us? You just gave it to us,’” he says.

Zawada says the plan was to create a new brand with new investors. But one investor pointed out that the ELOQUII name — a made-up combination of eloquent and soliloquy — was still being searched thousands of times a day.

“The three of us hated the name. We thought it was hard to pronounce and difficult to spell,” Zawada says of the original management team. “We were ready to walk away from it.”

Instead, they purchased the name, customer list and website wire frames, and relaunched in 2014.

Testing, testing

Zawada had a background in buying and merchandising, but didn’t know much about fundraising and startups. So, ELOQUII hired Mariah Chase, who had sold her business to QVC, as the CEO.

Today, ELOQUII’s design, marketing and about 40 associates are in New York City; all remaining functions are in Columbus. The company has doubled its business year-over-year, but Zawada and the other executives were concerned about profitability.

“We’re saying to ourselves, ‘Are we really going to be the next Amazon or do we need other channels in order to grow our business?’” he says.

To become omnichannel, ELOQUII tried out a catalog. Interestingly, customers perceived it as more of a magazine. They were excited to see women who looked like them.

ELOQUII produced six catalogs in 2017, and plans to increase that to eight this year. At the same time, customers wanted to touch and feel the merchandise.

“We kept saying over and over: We’re never going to open stores,” Zawada says. “Personally, I’ve done that for the past 20 years. E-commerce is the way to go. We’re not going to do brick and mortar. All these other brands are closing. Malls are dying.”

Finally, in the spring and fall of 2017, ELOQUII tested pop-up stores in Washington D.C. and Chicago, its No. 2 and No. 3 markets. (It skipped New York City because it would have been difficult to run a profitable store.)

Zawada says the company tested store size, what percentage of styles to offer, how fast to turn them over, and digital screens and iPads.

“Some things resonated and some things didn’t, but overall what we did learn was we were on to something. This customer who is plus size and has been plus size for the majority of her life never really had a true fashion styling experience,” he says.

The first locations became full-term leases. Then, Easton Town Center contacted ELOQUII about creating a pop-up.

Columbus, the company’s No. 25 market, was an opportunity to see if a store could lift e-commerce. Zawada says the concept store will be open through the spring at Easton, while ELOQUII looks for a permanent location because Columbus is now between 15 and 20 in terms of market sales. It is also pursuing new markets like New York, Houston, Dallas, Atlanta and Detroit.

“We’re going to continue to open stores and be smart about it. But we did learn it’s really valuable to our e-commerce and digital business to also have a physical presence,” he says.

Play it smart

Zawada says it’s much different working in a venture capital-backed business, than his prior jobs.

“I would attend meetings to make a lot of decisions and the biggest thing I did was manage people,” he says. “In the startup, I’m not only the COO and the co-founder, but also the janitor half the time.”

Zawada had fun learning to be a CFO and head up HR. Today, those roles are filled by others, but he still runs operations and logistics.

“One of the things that we talk about daily is we just need to be careful that we’re not growing too quickly and we’re making really smart decisions,” Zawada says, such as picking store locations that enable ELOQUII to spend less on infrastructure and more on driving a good brand experience.

“The capital that we have in our business is precious and we want to maximize every dollar,” he says.

ELOQUII’s biggest expenses are inventory, headcount and marketing, but Zawada says inventory on a startup’s balance sheet is viewed negatively. Owning 1,300 styles can be expensive; it requires efficiency and a strong belief in everything the company is designing.

“Be very, very cautious with the capital that you have because one bad month could make you rethink your foreseeable future,” Zawada says.

Hire carefully and if there are weak links in the organization move quickly, he says. Everybody needs to feel as passionate about the product and customer as you do, or you won’t be successful.