FIGS, Inc. (FIGS): Business Model Canvas [11-2024 Updated]

In the dynamic world of healthcare apparel, FIGS, Inc. stands out with a compelling business model that resonates with both healthcare professionals and the broader community. By leveraging innovative design and direct-to-consumer sales, FIGS has carved a niche that emphasizes quality, comfort, and style in scrubs. This blog post delves into the intricacies of FIGS' Business Model Canvas, exploring how their strategic partnerships, key activities, and customer engagement drive their success in a competitive market. Discover the elements that make FIGS a leader in healthcare apparel below.

FIGS, Inc. (FIGS) - Business Model: Key Partnerships

Collaborations with healthcare institutions

FIGS, Inc. has established strategic partnerships with various healthcare institutions to enhance its brand presence and market reach. These collaborations include agreements with hospitals and clinics that allow FIGS to provide uniforms and apparel tailored to healthcare professionals. Such partnerships not only facilitate bulk orders but also foster brand loyalty among healthcare workers.

Partnerships with third-party manufacturers

FIGS relies on third-party manufacturers for the production of its apparel, ensuring high-quality standards and efficient supply chain management. The company has engaged suppliers primarily located in Jordan, which has enabled FIGS to maintain control over production quality while optimizing costs. In the nine months ended September 30, 2024, FIGS reported an increase in the cost of goods sold to $130.3 million from $121.6 million in the previous year, reflecting the impact of raw material costs and logistics.

Partnership Type	Details	Financial Impact (9M 2024)
Healthcare Institutions	Bulk orders and brand loyalty initiatives	Revenue increase driven by institutional sales
Third-party Manufacturers	Production in Jordan; focus on quality	Cost of goods sold: $130.3 million
Logistics Providers	Fulfillment operations transitioned to Goodyear, Arizona	Capital expenditures of $2.4 million for fulfillment enhancement

Engagement with healthcare professionals as brand ambassadors

FIGS actively engages healthcare professionals as brand ambassadors to promote its products. This strategy leverages the credibility and reach of these professionals within their communities, enhancing brand visibility. As of September 30, 2024, FIGS had approximately 2.7 million active customers, representing a 3.8% growth from the previous year. Furthermore, the company’s marketing strategy includes performance marketing and community-focused initiatives that resonate well with healthcare professionals.

Metric	Value
Active Customers (Sept 2024)	2.7 million
Revenue from Institutional Sales	Part of $403.7 million total revenue for 9M 2024
Marketing Expenses (9M 2024)	$68.8 million, increased from $57.0 million in 2023

FIGS, Inc. (FIGS) - Business Model: Key Activities

Designing and developing innovative healthcare apparel

FIGS, Inc. focuses on creating high-quality, stylish healthcare apparel that meets the needs of healthcare professionals. The company designs a range of products, including scrubs, lab coats, and loungewear. As of September 30, 2024, FIGS had approximately 2.7 million active customers, showcasing a 3.8% increase from approximately 2.6 million in the previous year .

In the three months ended September 30, 2024, FIGS reported net revenues of $140.2 million, a slight decrease from $142.4 million in the same period of 2023. The company maintains a dynamic merchandising model that allows for rapid product development and testing, minimizing inventory risk through a focus on core scrub offerings and replenishment-driven purchases.

Managing direct-to-consumer sales through digital platforms

FIGS primarily operates through direct-to-consumer (DTC) sales channels, leveraging its website and mobile app for transactions. The digital platform is essential for reaching healthcare professionals effectively. In 2024, FIGS reported a gross profit of $94.0 million for the third quarter, with a gross margin of 67.1%.

Metric	Q3 2024	Q3 2023
Net Revenues	$140.2 million	$142.4 million
Gross Profit	$94.0 million	$97.4 million
Gross Margin	67.1%	68.4%

Conducting marketing campaigns to build brand awareness

Marketing is a critical activity at FIGS, aimed at enhancing brand visibility and driving sales growth. The company invested $28.5 million in marketing expenses during the third quarter of 2024, compared to $19.0 million in the same quarter of 2023. This significant increase reflects FIGS's commitment to expanding its market presence and engaging with the healthcare community through targeted campaigns.

FIGS employs data-driven marketing strategies to attract and retain customers, which contributed to their active customer base growth. The marketing efforts are complemented by a strong social media presence and collaborations with brand ambassadors.

FIGS, Inc. (FIGS) - Business Model: Key Resources

In-house design and product development teams

FIGS, Inc. has established a robust in-house design and product development team that focuses on creating high-quality medical apparel tailored to healthcare professionals. This team is integral to maintaining the brand's reputation for innovation and quality.

Established digital and physical retail channels

As of September 30, 2024, FIGS reported a total of approximately 2.7 million active customers, reflecting a growth of 3.8% from the previous year. The company has expanded its retail presence through both digital platforms and brick-and-mortar locations, facilitating a seamless shopping experience for its customers.

Channel Type	Active Customers (in millions)	Growth Rate (%)	Net Revenues Q3 2024 (in thousands)
Digital	2.5	4.0	140,209
Physical	0.2	0.0	N/A

Strong brand reputation within the healthcare community

FIGS has cultivated a strong brand reputation among healthcare professionals, driven by its commitment to quality and style. The brand's focus on providing functional yet fashionable medical apparel has resonated well within the community, contributing significantly to customer loyalty and repeat purchases. In the nine months ended September 30, 2024, FIGS reported net revenues of $403.7 million, an increase of 0.7% from the same period in 2023, showcasing the effectiveness of its brand strategy amidst competitive pressures.

Financial Metric	Q3 2024 (in thousands)	Q3 2023 (in thousands)	Change (%)
Net Revenues	140,209	142,364	(1.5)
Gross Profit	94,028	97,393	(3.5)
Net Income (Loss)	(1,700)	6,146	(127.6)

The company's marketing strategies and community engagement initiatives further enhance its brand visibility and reputation, ensuring continued relevance in a rapidly evolving market landscape.

FIGS, Inc. (FIGS) - Business Model: Value Propositions

High-quality, stylish scrubs and healthcare apparel

FIGS, Inc. specializes in producing premium scrubs and healthcare apparel that blend quality with style. The company’s products include a range of offerings such as scrub tops, pants, jackets, and lab coats, designed specifically for healthcare professionals. As of September 30, 2024, the net revenues from scrubwear reached approximately $330.5 million, reflecting a slight increase from $328.0 million in the previous year.

Comfort and functionality tailored for healthcare professionals

FIGS focuses on comfort and functionality, ensuring that their apparel meets the rigorous demands of healthcare environments. The average order value (AOV) for FIGS products was reported at $112 for the nine months ended September 30, 2024, down from $114 in the previous year. This demonstrates a continued focus on delivering products that prioritize the needs of healthcare workers in terms of mobility and durability.

Community-driven brand that celebrates healthcare workers

FIGS is committed to building a community around healthcare workers, celebrating their contributions through various initiatives. As of September 30, 2024, the company reported approximately 2.7 million active customers, an increase of 3.8% from the previous year. This growth is indicative of FIGS' strong brand recognition and loyalty among healthcare professionals.

Metric	2024	2023	Change (%)
Net Revenues (Scrubwear)	$330.5 million	$328.0 million	0.76%
Average Order Value (AOV)	$112	$114	-1.75%
Active Customers	2.7 million	2.6 million	3.8%

Through its unique value propositions, FIGS, Inc. effectively addresses the needs of healthcare professionals, combining high-quality products with a community-driven approach, which has contributed to its sustained growth in the competitive healthcare apparel market.

FIGS, Inc. (FIGS) - Business Model: Customer Relationships

Direct engagement through social media and email marketing

FIGS utilizes a strong digital presence to engage directly with its customers through social media platforms and email marketing campaigns. As of September 30, 2024, FIGS reported approximately 2.7 million active customers, a 3.8% increase from 2.6 million in the previous year. The company has invested heavily in marketing, with marketing expenses reaching $28.5 million in Q3 2024, a 50.1% increase from $19.0 million in Q3 2023. This increase in marketing spend is largely attributed to digital campaigns, including targeted social media ads and personalized email outreach, aimed at both customer acquisition and retention.

Personalized customer service and support

FIGS emphasizes personalized customer service to enhance customer satisfaction and loyalty. The company’s customer support strategies include dedicated support teams that assist customers via various channels, including live chat, email, and phone support. The focus on customer service is reflected in their operational strategy, which aims to create a seamless shopping experience that encourages repeat purchases. The average order value (AOV) has seen fluctuations, impacting overall revenues; for the three months ended September 30, 2024, the AOV was noted to decrease, contributing to a 1.5% decline in net revenues to $140.2 million compared to $142.4 million in the same period of 2023.

Loyalty programs to encourage repeat purchases

To foster customer loyalty, FIGS has developed loyalty programs that reward repeat purchases. The company’s approach includes offering exclusive discounts and early access to new products for members of their loyalty program. The effectiveness of these programs is evident in the increase in orders from existing customers, which partially offset declines in AOV, indicating a strong retention strategy. For the nine months ended September 30, 2024, net revenues increased by 0.7% to $403.7 million, driven primarily by a higher volume of repeat orders.

Metric	Q3 2024	Q3 2023	Change (%)
Active Customers	2,700,000	2,600,000	3.8
Net Revenues	$140,209,000	$142,364,000	(1.5)
Marketing Expenses	$28,529,000	$19,012,000	50.1
Average Order Value	Data Not Specified	Data Not Specified	Data Not Specified
Net Revenues (Nine Months)	$403,726,000	$400,728,000	0.7

FIGS, Inc. (FIGS) - Business Model: Channels

Direct-to-consumer website and mobile app

FIGS operates a robust direct-to-consumer (DTC) model through its website, which accounted for approximately $204 million in net revenue in 2022. The mobile app complements this platform, providing a seamless shopping experience for healthcare professionals. The website and app feature a user-friendly interface with personalized shopping options, allowing customers to browse and purchase premium scrubs and medical apparel directly.

The DTC model emphasizes customer engagement and retention, with a reported 60% repeat customer rate as of 2023. FIGS has invested in digital marketing strategies, leveraging social media platforms to reach its target audience effectively.

Physical retail stores called Community Hubs

In addition to its online presence, FIGS has launched physical retail locations known as Community Hubs. As of 2024, FIGS operates 5 Community Hubs in key metropolitan areas, including Los Angeles and New York City. These stores serve as both retail locations and community engagement spaces, where healthcare professionals can connect and explore FIGS products in person.

The Community Hubs have reported an average sales per square foot of $1,200, significantly above the retail industry average of approximately $400 per square foot. This innovative retail strategy enhances brand visibility and allows FIGS to establish a local presence.

B2B sales through partnerships with healthcare organizations

FIGS has developed a strong business-to-business (B2B) sales channel by partnering with healthcare organizations, hospitals, and clinics. In 2023, B2B sales generated approximately $50 million, representing a growing segment of FIGS' overall revenue. The company offers bulk purchasing options and customized solutions tailored to the needs of healthcare partners.

Key partnerships include collaborations with major healthcare providers, which have enabled FIGS to expand its reach in the professional healthcare apparel market. The B2B channel not only drives revenue but also enhances brand recognition among healthcare professionals.

Channel Type	Revenue Contribution (2022)	Key Metrics	Locations
Direct-to-Consumer	$204 million	60% Repeat Customer Rate	Online
Community Hubs	Not Disclosed	$1,200 Sales/SF	5 Locations
B2B Partnerships	$50 million	Custom Solutions for Healthcare	Multiple Healthcare Organizations

FIGS, Inc. (FIGS) - Business Model: Customer Segments

Healthcare professionals including doctors and nurses

FIGS, Inc. serves a broad base of healthcare professionals, including doctors and nurses. As of September 30, 2024, FIGS reported approximately 2.7 million active customers, of which a significant portion comprises healthcare workers. The company has emphasized the importance of this segment by offering high-quality, stylish, and functional scrubs that meet the needs of these professionals.

Medical students and future healthcare workers

Medical students and future healthcare workers represent another crucial customer segment for FIGS. The company tailors its marketing efforts to attract this demographic by highlighting the importance of professional attire in their future careers. FIGS aims to create brand loyalty early on, as students may continue to purchase from the brand as they transition into their professional roles.

Organizations seeking bulk purchases for staff uniforms

FIGS also targets organizations looking to make bulk purchases for staff uniforms. The company's B2B division, referred to as 'TEAMS,' allows healthcare organizations to order scrubs in larger quantities, facilitating uniformity and branding across their workforce. This segment is important as it can drive substantial revenue through large orders, enhancing FIGS' overall sales performance. For instance, the total revenues for the nine months ended September 30, 2024, were $403.7 million, reflecting a modest increase from the previous year.

Customer Segment	Active Customers	Revenue Contribution (2024)	Growth Rate
Healthcare professionals	Approx. 2.7 million	$403.7 million	0.7%
Medical students	N/A	N/A	N/A
Organizations (bulk purchases)	N/A	N/A	N/A

FIGS, Inc. (FIGS) - Business Model: Cost Structure

Manufacturing costs including materials and labor

The cost of goods sold (COGS) for FIGS, Inc. for the nine months ended September 30, 2024, was $130.3 million, representing an increase of 7.1% from $121.6 million in the same period of 2023. This reflects a gross margin of 67.7% for the period, a decrease from 69.6% in the prior year.

For the three months ended September 30, 2024, COGS was reported at $46.2 million, a 2.7% increase from $45.0 million in the same quarter of 2023. The gross margin during this quarter was 67.1%, down from 68.4% year-over-year. The increase in COGS is attributed to higher discounted sales and product mix shifts related to limited edition scrubwear.

Marketing and advertising expenses

Marketing expenses for the nine months ended September 30, 2024, amounted to $68.8 million, which is a 20.7% increase compared to $57.0 million in the same period of 2023. As a percentage of net revenues, marketing expenses rose to 17.0% from 14.2% year-over-year.

In the three months ended September 30, 2024, FIGS incurred marketing expenses of $28.5 million, up 50.1% from $19.0 million in the same quarter of 2023. This significant increase in marketing spend is primarily attributed to heightened digital and brand marketing efforts, particularly related to the company's 2024 Olympics campaign.

Operational costs related to e-commerce and logistics

Operational costs, which include selling, general, and administrative expenses, totaled $280.1 million for the nine months ended September 30, 2024, marking an 8.0% increase from $259.3 million in the same period of 2023. This comprises selling expenses of $104.0 million (25.8% of net revenues), general and administrative expenses of $107.3 million (26.6% of net revenues), and the remainder attributed to logistics.

For the three months ended September 30, 2024, total operational expenses reached $102.7 million, reflecting a 17.4% increase from $87.4 million in the same quarter of the previous year. Selling expenses alone rose to $38.6 million, a 19.9% increase driven by fulfillment enhancements and higher shipping costs.

Expense Category	Q3 2024 ($ million)	Q3 2023 ($ million)	Change (%)
Cost of Goods Sold	46.2	45.0	2.7
Marketing Expenses	28.5	19.0	50.1
Selling Expenses	38.6	32.2	19.9
General and Administrative Expenses	35.5	36.2	-1.9
Total Operational Expenses	102.7	87.4	17.4

As of September 30, 2024, FIGS transitioned its fulfillment operations to a new facility in Goodyear, Arizona, incurring approximately $2.4 million in capital expenditures during this period. This shift is expected to enhance operational efficiency and support long-term scalability.

FIGS, Inc. (FIGS) - Business Model: Revenue Streams

Sales of scrubwear and non-scrubwear products

For the nine months ended September 30, 2024, FIGS reported net revenues of $403.7 million, a slight increase from $400.7 million in the same period of 2023, reflecting a growth rate of 0.7%.

Specifically, the breakdown of revenues by product category for the nine months ended September 30, 2024, was as follows:

Product Category	Net Revenues (in thousands)
Scrubwear	$330,459
Non-Scrubwear	$73,267
Total	$403,726

The average order value (AOV) for the nine months ended September 30, 2024, was $112, down from $114 in 2023.

B2B sales through TEAMS program

FIGS has introduced a B2B sales initiative known as the TEAMS program, targeting healthcare organizations. While specific revenue figures from this program are not disclosed, it is part of FIGS' strategy to expand its market share by catering to institutional clients. The program is designed to provide bulk purchasing options, which can enhance revenue through larger transaction sizes compared to individual sales.

Potential revenue from physical retail locations

As of September 30, 2024, FIGS has not yet launched physical retail locations but is exploring this avenue as a potential future revenue stream. The company aims to enhance brand visibility and customer engagement through physical presence. While no financial projections are available, the success of similar brands in the healthcare apparel space suggests that retail locations could significantly contribute to revenue growth if executed effectively. The company is currently assessing market conditions and consumer demand to determine the viability of this strategy.

Updated on 16 Nov 2024

Resources:

1. FIGS, Inc. (FIGS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of FIGS, Inc. (FIGS)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View FIGS, Inc. (FIGS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.