Over the years, whenever I purchased a “party dress” — meaning an expensive dress for a specific occasion, mostly black tie — I always thought, why can’t I just rent the dress, wear it, and be done with it, instead of spending so much money on something that, while gorgeous, might be out of style or not look so great when the time comes to wear it again? Two Harvard Business School classmates, Jennifer Hyman and Jennifer Fleiss, had the same thought, but went so far as to turn it into an actual business. The first Jennifer, Hymen, was struck with the idea after her younger sister showed off a $1,600 Marchesa dress she couldn’t afford but bought anyway to wear to a wedding. What’s a girl to do when every event is photographed and appears on Facebook? Wear the same outfit twice? Not anymore is the answer the two Jennifers provided when they launched Rent the Runway in 2009 with $1.5 million of venture funding from Bain Capital Ventures. [Read more…]
There should be a Master’s degree in customer engagement (MCE) obtainable from Harvard or any of the other top-tiered universities. It should be as revered and valued as an MBA, including comparable compensation. And every retail associate or associate wannabe, for both online and off, should be required to obtain that degree. Why? Because it is the most critically important job in retail, even more important than all the hotshot jobs in the C-suite. I use the word engagement, rather than service, because readers’ eyes tend to glaze over upon reading about customer service, a term they have become desensitized to because of its redundant over-use. Plus it has become a “paying-lip-service” term for too many retailers.
In fact, the MCE curriculum could be copied right out of Jack Mitchell’s revised and updated book: “Hug Your Customers,” published by Hachette Books, on sale today. For readers who are not aware of Mitchells Family of Stores, they are a group of five upscale designer and luxury goods stores (Mitchells, Richards, Marshs and two Wilkes Bashford stores) that have total annual revenues north of $125 million and growing. While there are a few other retailers with notably high levels of customer engagement (Nordstrom for sure), Mitchells is legendary for their over-the-top personalized connectivity with each and every customer, starting from day one in 1958 when they were founded. [Read more…]
Who would have thunk that hanging out in a kitchen and bath appliance store could replicate the Starbucks experience for coffee aficionados and Apple for computer lovers? Well, thunk again. Pirch, as in perching, or sort of feathering your nest in a totally fun and interactive experience, is the reason consumers will flock (pun intended) to Pirch as a “third place” to hang (work, home and Pirch). Just as Starbuck’s and Apple disrupted how coffee and computers were sold and consumed, Pirch is disrupting the appliance world with a fundamentally new and co-created experiential model.
Founded in 2009 on the vision of its CEO, Jeffrey Sears, and Chairman, Jim Stuart, their goal was to make shopping for kitchen and bath appliances “inspirational and joyful.” Originally named Fixtures Living, it was changed to Pirch in 2013, meant to more accurately suggest a perch or nest. “Perching is like feathering your nest, roosting at home. It’s a feel-good name,” said Sears in a PRNewswire article. [Read more…]
Fifty meters off Nanking Road in Shanghai, behind the Apple Store, you still have remnants of the early 20th century city. The alleys are narrow and you can stare into homes lit with cold fluorescent lights. The dirt, the smells, the noise and the life are visceral. Although it isn’t the dark side of the moon, the impulse is not to linger. It isn’t from a sense of danger, but rather the dawning realization that you are an alien – a stranger in a strange land. It’s an unsettling time warp, where in the space of a few dozen paces, the 21st century fades and the 19th century seems just around the corner.
This juxtaposition makes Shanghai an unlikely battleground for modern luxury shopping. Each year, new malls open in a very crowded marketplace with a fresh proposition. The older the mall, the more it gets pushed down-market. Commercial properties are not aging well in a city of 24 million people where construction fever floats on a bloated financial system desperate for just a modest return on their cash.
For jaded shoppers bored with last year’s hot spot, the attraction is no longer about scale, but about the proposition. While it is not quite as simple as the 2013 holiday decorative stars, the 2014 goats continued to try to reinvent the retail thematic proposition. But in a mall where five years ago you had to stand in line to ride the escalators, today it is startlingly vacant. [Read more…]
Important Lessons, It Turns Out
Fast Company just published an interesting story about Lego and its Future Lab, titled “How Lego Became the Apple of Toys.” Before the recession, Lego was in serious trouble. Fast Company sets the stage:
“About a decade ago, it looked like Lego might not have much of a future at all. In 2003, the company — based in a tiny Danish village called Billund and owned by the same family that founded it before World War II — was on the verge of bankruptcy, with problems lurking within like tree rot. Faced with growing competition from video games and the Internet, and plagued by an internal fear that Lego was perceived as old-fashioned, the company had been making a series of errors.”
What Lego Did Wrong & How Lego Made It Right
It isn’t only consumer product goods companies targeted at the middle class that fared poorly in 2014. Regardless of what the confidence readings or the employment indicators say, shoppers around the world have exercised restraint for a number of years and have not returned to their free-spending ways of the late 90s and early 2000s.
Blame it on exogenous factors ranging from the Crimean crisis and the sanctions imposed on wealthy Russians; the tightening of anticorruption measures in China, creating a reluctance among the Chinese to be seen as ostentatious spenders; or the street demonstrations in Hong Kong. There are also real macro financial factors as well, including Japan entering a recession in Q4 2014; weakening trends in Europe as the year progressed; and the continued consumer malaise in the US. When the numbers are finally tallied, 2014 will have been a year of very modest (if any) growth in the global personal luxury goods sector. [Read more…]
The luxury industry may have lost a bit of its luster lately: in 2014, Prada’s third-quarter profits sunk 44%; LVMH sales growth has slowed down; and analysts downgraded their recommendations for some listed companies.
There are several reasons for this. First, weak economic performance in parts of Europe and Asia is deflating consumer demand in those areas. Second, societal shifts, including a crackdown on corruption gift giving in China and last year’s protests in Hong Kong, are stealing some of the industry’s cache. At the same time, a lack of truly innovative products has failed to energize consumers.
But there is a big and most important reason: the luxury consumer base has changed. It’s not your grandmother’s luxury market today, which brings tremendous growth opportunity for the luxury brands that can evolve with the changing face of affluence and market to these new customers based on their individual needs. [Read more…]
About a dozen years ago, sitting in her blue and white David Hicks and Billy Baldwin design-inspired kitchen in her 6000-square-foot Pierre Hotel co-op overlooking Central Park, Tory Burch set about to create an affordable clothing line that she and her friends would like to wear. By this time, Tory Burch was already something of a socialite and had appeared in the pages of Vogue and on the cover of Town & Country. Not entirely to the manor born, but close enough, Tory, a graduate of the University of Pennsylvania, had worked in the fashion industry, not in design, but in advertising and public relations. Perhaps this is where she learned about marketing and branding, or perhaps she just has very good instincts.
The first Tory Burch boutique opened in 2004 on Elizabeth Street in Manhattan’s Nolita, now a fashionable retail stretch, but a somewhat more pioneering location at the time. With a $2 million dollar investment from then-husband Chris Burch and additional funds from friends and family, the store launched with multiple categories of clothing and accessories. In 2005, Oprah Winfrey discovered a Tory Burch tunic and pronounced it the next big thing. With Oprah’s endorsement, a unique fashion point of view that struck a chord with a certain crowd in Manhattan in its early days and some good exposure on Gossip Girl, fashion history was made. [Read more…]
Like most New Yorkers I made it through last winter’s Polar Vortex with many layers and ‘Hot Hands’ in my pockets, but going into this season, I knew I had to replace my very well worn 10-year-old Bogner and 12-year-old Moncler down jackets. I asked a friend, younger and hipper than I, what she recommended. “Canada Goose” she said, “cheaper and cooler than Moncler.” I’d never heard of Canada Goose, but, once aware, the red white and blue Canada Goose expedition patch logos were suddenly everywhere in New York City. The parkas are more function than fashion, many trimmed with coyote fur around the hood. PETA has objected, but celebrities, including Matt Damon, Daniel Craig and Claire Danes have been photographed in theirs. Last season, Canada Goose was featured in the US Magazine “Who Wore it Best” section. Was it Lucy Liu, Cameron Diaz, Maggie Gyllenhaal or Emma Stone? Kate Upton wore a white Canada Goose parka over a white bikini bottom on the cover of the 2013 Sports Illustrated Swimsuit issue. Photographed in Antarctica, the headline reads, “Kate Upton Goes Polar Bare.” [Read more…]
‘Twas the day after Christmas, when all through the mall,
Every shopping creature was stirring in a big free-for-all.
The sale banners were hung in the windows with twine,
In hopes that black ink would show up on the bottom line.
The merchants were hunkered down like well-tailored elves,
West Coast dock slowdowns having bared all their shelves.
Cheap gasoline gave the season a boost,
Proving to be many a retailer’s surprise golden goose.
Walmart trotted out Kelly & Michael clones in their TV attack,
Having decided the entire season could now be called Black.
Target did its usual mix of cheap and chic kerfuffle,
Trying to forget the ghosts of breaches and Steinhafel.
Macy’s ran a record number of one-day sales with flair,
Doing enough business to never muss up Terry’s hair.
Sears and Kmart were largely invisible,
Eddie’s vision rapidly becoming a sinking dirigible.
Mike Jeffries & Dov Charney were two December casualties,
Undone by H&M, Zara & all the other fast-fashion casual Ts.
Radio Shack watched as the clock wound down tic by tic,
It couldn’t be saved by a bizarrely retro Weird Al Yankovic.
Kohl’s tried kash and koupons in every denomination,
Making sense of them caused customer consternation.
And Amazon finally opened an in-town warehouse sorter,
Promising deliveries even before a shopper places the order.
Best Buy had all its consumer electronics at the ready,
Hoping not to go the way of Circuit City and Crazy Eddie.
Luxury brands kept their stores all orderly and neat,
Waiting for those big bonuses to come in from Wall Street.
JCPenney was still suffering from its Ron Johnson hangover,
Though the trouble was still too much merchandise holdover.
But no matter the channel, the site or the store,
The customer would only respond to more and more.
Now 10 percent off, 20 or even 30,
It took 40 or 50 for shoppers to get down and dirty.
In fact, only one store was sale-less and unflappable,
It bore the image of a fruit, of course, it was Apple.
So the endless sales and promos from very far to quite near,
Promised to stretch through well into the New Year.
It’s just how business is done in retailing these days,
Sadly, executives and customers are no longer fazed.
And longing for the good old days is just a wasted gesture,
Trying to do it any other way is meaningless conjecture.
So as the season ends and the stores turn out the light,
We wish you Happy New Year, it was one hell of a fight.