[ Music ] >> Hi. Let's talk about the Threadless case. Threadless is one of my favorite retailers. I bought many of their products. In fact, I'm wearing a Threadless T-shirt right now. Let me show it to you. This particular T-shirt is called, "Larry the Fox Doesn't Feel so Clever Anymore", and it was designed by a fellow named Paul Otters [phonetic]. So, this Larry the Fox, here, in brown, and he's in this tree-lined scene. And if you look closely, you can see a number of black and white animals such as a zebra, we have a panda, and some penguins. So, we can't see them because they're camouflaged, so I guess he doesn't feel so clever anymore. Well, the purpose of this case is to examine the relationship between online versus in-store retailing, and to better understand how digital tools are changing the retail landscape. We talk first, a bit about Threadless the company. Threadless is a very innovative clothing manufacturer located in Chicago. This company specializes in making and selling unique T-shirts, such as this one. The company was founded in 2000 by Jake Nickell, and uses customer co-creation to design their T-Shirts. Specifically, it uses a submission process very similar to what [inaudible] uses. However, the difference here, is that in addition to using this process to solicit designs, it also uses submission to help select which designs to produce. This is a very selective process. Only about 1 percent of all submitted designs are actually selected for printing. These shirts are typically made in the U.S.A. and sell for around $25 each. Since Threadless was founded, it has sold its products almost exclusively via its website, which is the same site which designs are solicited and voted upon. Through this approach, it has experienced phenomenal growth. In recent years, Threadless has received substantial interest from several large retailers such as Target, and is also considering the possibility of opening its own retail stores. This brings us to the core issue of the case. During its first decade of operation, Threadless has been very successful selling its shirts online. The core issue is if, and how should Threadless expand its distribution capacity? We have particular questions I'd like you to consider. First of all, should Threadless move into physical, retail distribution? Second, if so, how? Should it open its own store, or sell through an existing, established retailer? And finally, what should be the relationship between its online versus its physical distribution channel? [ Silence ]