RevolutionRace is a trailblazer in the DTC industry, achieving impressive sales growth and profitability. The company's latest earnings report showcases its success and commitment to being a sustainable and socially responsible business. Founded in 2013 by Pernilla and Niclas Nyrensten, RevolutionRace accomplished a historic milestone by becoming the first female-led company to go public on the Stockholm Stock Exchange in 2021. With Paul Fischbein, the new CEO, at the helm, the company is poised for global expansion and aims to establish itself as one of the world's most recommended and sustainable brands. RevolutionRace is the epitome of a company with a moral compass, offering high-quality products at a competitive price while prioritizing sustainability. The team's dedication to success is evident, and they are racing to the top of the industry with no signs of slowing down.

Chan: You have an impressive sustainability strategy with less than 1% overproduction. How do you achieve this?

Fischbein: We focus on functional products that meet the needs of our customers instead of fashion trends. This approach was also helpful during the pandemic. As 80% of our collection were replenishment styles, we were able to increase inventory and grow significantly during the pandemic. We believe that reducing overproduction and pushing the durability of our products are two levers through which we can contribute most significantly to environmental sustainability.

Chan: What does it mean to be the most recommended brand?

Fischbein: We value our customers' feedback and follow their reviews carefully. We have received over 500,000 customer reviews so far, and our overall product satisfaction rate stands at an impressive 4.62 out of 5, with a 90% customer service satisfaction rate. These reviews show that over half of our customers wear our products over 50 times in six months, demonstrating our items' longevity and durability.

Customer reviews are a critical asset for our company, providing valuable insights into how we should position our product. In addition, we closely monitor return rates and take immediate action on products that receive less favorable customer reviews and high return rates. We have a return rate of approximately 30%. In comparison, a fashion company in Germany experiences a return rate of 55%, a positive sign from a sustainability perspective.

Chan: What are your strategies for global expansion, particularly in the USA?

Fischbein: Our largest market is in Germany, which has a population of 83 million and accounts for more than half of our sales. Switzerland, the UK, and the Netherlands are growing quickly, but the US is our fastest-growing market. We entered the US market about 18 months ago through our partnership with Amazon. We have also expanded into South Korea, Canada, and Japan. Our pants are our best-selling product, accounting for 60% of our sales in the US.

We are proceeding slowly and cautiously when introducing our products and forming partnerships. The demand for our product varies between the US and Europe. In the US, our female customers prefer a more modern fit and are more inclined to wear leggings than pants. The supply chain differs between the two regions; we are currently evaluating this.

Our range of products are versatile and perfect for outdoor activities like hiking, walking, and gardening. We believe in delivering everyday performance rather than ultra-performance. Interestingly, many of our customers love spending their leisure time outside, walking, or hiking with their dogs. Hence, we have a clothing line for dogs, and canines are featured in many of our campaigns. We are not an urban brand, and we aim to maintain our brand identity with a strong emphasis on nature. Our tagline, "Nature is our playground," perfectly encapsulates our philosophy.

Chan: We would love to hear about your approach towards Amazon. Could you please share some insights on your strategy?

Fischbein: We believe that our collaboration with Amazon is a strategic decision. While it incurs high costs, we are confident in maintaining our balance by only selling 10-15% of our collection through Amazon, which accounts for just 6-7% of our overall sales. Our primary goal is to create brand awareness in the US market. Our high-quality pants at competitive prices set us apart from our competitors, and we are confident that once customers discover our brand on Amazon, they will become repeat customers and visit our website to purchase other products.

Chan: What are some of your challenges in the US market, and how do you overcome them?

Fischbein: The outdoor market is highly competitive, with numerous brands vying for a spot. Our primary competitor is The North Face. To succeed in this environment, we must focus on two key things: firstly, we must adhere to our moral compass, which is deeply ingrained in our company culture. Secondly, we need to launch and expand new products successfully. Footwear is an excellent example of a successful product launch. It accounts for 10% of our business, with only one last developed and launched. We have traditionally focused on cold weather products and recently launched Alpine, a ski and snowboard clothing line. In the upcoming years, we plan to invest in lighter-weight products, including fabric, fit, and color offerings.

To be successful in the US, we need to consider setting up a new infrastructure and adopting products that meet the market demands. Some countries where we currently produce might not be a good fit for the US market due to differences in labeling requirements. We will consider near-shoring and trade agreements that will benefit the USA market.

Chan: What distinguishes your company's culture and values from others?

Fischbein: Everyone claims to be sustainable these days, but what matters to us is how we satisfy our customers. We have built our company through social media and know that if we don't keep our customers happy, we'll lose them. Our customers care about how we work with our suppliers, which sets the tone for our entire company culture - we are both customer- and product-oriented, and we consider both equally important.

Transparency is one of our core values, and we have five main objectives that we focus on:

1. We always strive to increase customer satisfaction, as evidenced by our customer reviews.
2. We work to increase employee satisfaction and conduct three surveys per year to measure employee engagement and satisfaction.
3. We focus on delivering quality products at a fair value.
4. We aim to strengthen our brand awareness and currently have 1.5 million followers, which is significant for a Swedish company.
5. We work to increase gross sales with a profitable bottom line.

We hold monthly meetings to share all our transparent statistics with our employees, as we believe in keeping everyone informed and involved in our progress.

Chan: What advice would you give to a start-up?

Fischbein: Keeping things simple is important. It's essential to trust your employees and delegate decision-making power to them. You must hold them accountable for their decisions and allow them to fail. It's more important to learn from their mistakes and not repeat them. Transparency is critical, and there's no shame in making mistakes.

Pernilla founded the company, and now it operates in 18 countries. The secret to our success is having the right team in place. It's crucial to make changes when necessary, especially when a company grows as quickly as ours. Change becomes natural around 80-90% of the time, and people expect it.