The company's new name reflects a pivot to focus on its pioneering clothing-as-a-service model serving top brands.
Sedans sporting Uber and Lyft windshield stickers dart through Columbus traffic, picking up travelers. More than 1,000 Airbnb listings in Central Ohio give visitors access to lodging beyond local hotels. Area grocery stores offer pick-up and delivery services. Technology and the sharing economy continue to disrupt major industries, and a business with roots in central Ohio is on the forefront of changes in the fashion industry.
New data technology and logistics company CaaStle gives retailers everything they need to offer a monthly clothing subscription service. This gives customers a rotating closet of rental clothes shipped straight to their doorsteps. CaaStle launched in 2018 and fully manages subscription services for seven retailers, including locally based Express and some of the biggest names in the fashion industry. Much of the company’s operations happen at a Groveport distribution center—a 120,000-square-foot warehouse with 150 employees that operates six days a week.
CaaStle began as subscription-based retail brand Gwynnie Bee, though co-founder and CEO Christine Hunsicker says the concept was always to create a platform that could power the players in the fragmented fashion retail industry.
“We came up with the thesis that ownership was a lot of the issue,” Hunsicker says, because no retailers were offering subscription rental in the clothing space. “The big question was would people rent everyday clothing?”
Gwynnie Bee, which is now a subsidiary of CaaStle, launched in 2011 using a clothing-as-a-service (CaaS) model to answer that question and provide proof that the technology-driven subscription rental model could work in the retail space. Hunsicker says the ongoing shipments of rental clothing mean a customer could see more than 100 items from a brand in a year, which increases brand loyalty. Retailers also receive data such as how long customers are keeping clothes and how often certain items are purchased.
The CaaStle executive team brings together expertise in technology and fashion from companies such as Yahoo, Microsoft, Cole Haan and Goldman Sachs. Hunsicker formally announced the name change from Gwynnie Bee to CaaStle in November, though the change has not been widely reported. Hunsicker says no other company in the retail industry provides a business-to-business model similar to CaaStle’s although she expects to see competitors emerge.
The Groveport distribution center began operations in 2014. Ericka Ponte serves as regional director of operations, overseeing the Groveport location and a second distribution center in Phoenix.
“We’re pioneering and creating a whole new economy for apparel. We’re doing something completely disruptive to the industry,” Hunsicker says. And its bold moves are getting noticed. CaaStle this year was named one of the top innovators in retail in the United States by business-audience publisher Fast Company.
How CaaStle works
Customers subscribe with a chosen brand for a set monthly fee, select items to stock their “online closet” and receive an ongoing rotation of garments shipped to their homes. CaaStle algorithms help customers select proper sizing and find style inspiration based on previous purchases.
“We’re tapping into the idea that you should spend money on experiences—[which is] the millennial thought process,” Ponte says.
CaaStle manages all aspects of the service for retail partners, from the consumer-facing website to the cleaning and shipping of garments to customer service. Retailers pay CaaStle a per-user per-month fee. “It opens up a way for their existing customers to experience their brand in a different way,” says Ponte. “And they are tapping customers they’ve never had business from before.”
CaaStle retail partners include:Gwynnie Bee Infinite Closet by Ann Taylor NY&Co by New York & Co. Express Style Trial by Express Vince Unfold Rebecca Taylor RNTD AE Style Drop by American Eagle
Patrice Croci, vice president of brand and performance marketing at Express, says 30 percent of customers subscribing to Express Style Trial are new customers and an additional 15 percent are “lapsed” customers reconnecting with the brand through the subscription service. Express considered adding a rental and subscription option for more than a year before launching its service through CaaStle in October 2018. “We’re keeping up with consumer needs and looking at new ways for our customers to experience our brand—especially on the millennial side,” says Croci. “Subscription and on-demand has always been a part of their lives and we wanted to jump in on the apparel side.”
Each retailer sets monthly subscription rates—$49.95 to $160 for three or four items. A subscription does not limit customers to one monthly shipment. When a customer checks out online and returns or purchases items, the system triggers the next ship.
CEO Hunsicker says her team considered Columbus, Indianapolis and Louisville for CaaStle’s distribution center. Columbus offered the necessary transportation and strong incentives to win their business.
Many companies make location decisions about their facilities based more on ability to execute than industry, says Terry Esper, associate professor of logistics at Ohio State University’s Fisher College of Business. “Columbus is in a really good location when you think about access – nearly half of the population is within a 10-hour drive,” he says. “That’s a higher percentage than any other major distribution hub [in the United States].”
He says Columbus becomes even more attractive for companies that use a ship-to-consumer rather than a ship-to-store model. “The location is central to where people live, not just where they shop,” he says.
He also cites the strong infrastructure in Columbus, with many companies in the logistics sector, a labor force that understands logistics and pipeline of trained talent.
Ponte has seen the number of employees at the Groveport distribution center grow from 50 to 150 over the last several years. She says the current facility could accommodate four times the number of current retail partners.
“The potential job creation is amazing for CaaStle and other retailers as we provide a new economy for their already existing business,” she says.
The Groveport facility uses a proprietary process to sort, clean, repair, press and inventory garments. Each garment receives a unique identifier—a code referred to as a snowflake, so staff members with electronic scanners can pick, pack and ship the exact garment being requested.
Ponte says CaaStle invests in the larger Central Ohio community through work with Columbus 2020, the Columbus Chamber and Mid-Ohio Foodbank. The company also encourages innovation from employees. Many ideas for projects and efficiencies in the distribution center come from the floor, which she says is unusual from an operations perspective.
“We’re the platform and the mind and the engine behind the moving system,” Ponte says.