A Conversation with Eric Wiseman, CEO of VF Corporation
“Businesses that thrive over time are generally great at changing,” says Eric Wiseman, CEO of VF Corporation, a global leader in branded lifestyle apparel, footwear, and accessories with more than 30 brands, 64,000 associates, and $12.4 billion in revenue. “Their experience is changing who they are as conditions change and provides a good foundation to help them survive the next transformation.”
Eric has held leadership roles for over 20 years at VF, one of the industry’s most consistently innovative companies. He also serves on the board of directors of Lowe’s, CIGNA, and the Retail Industry Leaders Association (RILA). Eric recently walked us through his vision of the future, and how VF is working to stay ahead of the curve.
Two-and-a-half years ago, VF kicked off an internal initiative called “The Future of Shopping.”
“Every six months we’ve gotten together with the operators of our biggest brands to update them on what we see as the big trends coming at us, recognizing we’re probably part wrong, because trends are so fickle and move quickly,” Eric said. “When we started this exercise, our aim was to have a 2020 plan. We recognized that we needed to have a clearer view of what the world may look like by then.”
We all know the future is hard to anticipate, but if you take a cross-disciplinary look at the trends and connect the dots, you have a shot at staying ahead of the most critical shifts. One of the biggest predictive takeaways from VF’s forward-thinking work was a core, crucial truth. “The upshot of all of this is the consumer is in total control now, and if you give consumers a fantastic experience, they will love you,” Eric said.
Eric knows customer experience isn’t only how people interact with your products online or in a store. It’s also how they engage with and think about your brand systemically, as well as how your employees personally identify with your brand ethos. To that end, VF has made significant investments in corporate social responsibility and sustainable sourcing.
“In Bangladesh, we’re sending medical wagons into impoverished villages that don’t have access to medicine,” Eric said. “We feel if we have a factory there, and even if we only use 20 percent of that factory, then the people there and their families have the right to medical care.
We dig wells in communities where they don’t have wells. We’re doing more of these things because, why wouldn’t we?”
It goes without saying that the level of competition on today’s retail playing field is fierce, demanding new skillsets and mindsets to insure leaders are both facile and visionary. VF has established a matrix of competitive strategies to thrive in the global marketplace.
1. Test and keep testing.
Eric says the company’s growth has come in large part from a willingness to try new things. “Nine years ago we did $7 million in e-commerce globally—now we’re doing$700 million,” he said. “I was at VF when people said, ‘We’re not going to open retail stores; we’re going to be the best wholesaler that big box retail has ever had.’ Boy, am I glad we did open retail stores. We now have 1500 stores around the world. Doing that just takes the mentality of being thoughtful and flexible and testing. Companies that are constantly looking forward and exploring, not just sitting at their desks looking at reports of last week’s comp store sales, are going to be victorious.”
2. Encourage out-of-the-box and out-of-the-company thinking.
Eric encourages VF’s leaders to look outside the company for new ideas—to the point of evaluating their external research and observations in their performance reviews. “If you structure a company that has the right balance of wisdom and experience with new voices, it will be okay. Then you have to make sure that your experienced leaders regularly get exposure to new experiences,” he said.
3. Be agile.
Eric points to the recent “Damn Daniel” YouTube videos featuring Daniel and his white Vans sneakers as a pop cultural moment that produced immense benefits to VF. “It went viral on YouTube, got 30 million views. They went on Ellen DeGeneres the same week. Then our social media people got wind of it and made the home page of our Vans brand website all white Vans,” Eric said. “On Ellen, this kid was given a lifetime supply of Vans. We were able to move quickly on that.” Capturing the moment, mobilizing quickly and taking advantage of a crowd sourced fan base was priceless in terms of media, marketing and PR costs.
4. Create urbanized stores.
Over the past 15 years, population growth in the 50 biggest cities in the U.S. has been three times higher than the rest of the country. People in these urban areas also earn 20 percent more, according to “The Economist.” Eric says capturing this growing, increasingly affluent population requires a different in-store experience. “We did a pop-up Eastpak store in London last year and put everything in the store but product to sell,” he said. “You could see product displays, and you were never more than three feet away from an iPad. You could order it and get it delivered the next day. The model was a small store with simplified shopping options for urban populations. What do we do with megacities? We’re looking at a case where every neighborhood is different, so maybe smaller stores custom created for a local neighborhood is the future.”
5. Find your niche.
Eric thinks trying to be the next Amazon or competing on speed or price alone is futile. “If what you want is quick order fulfillment, then Amazon pretty much has that buttoned up,” he said. “What they don’t have is a combination of fulfillment and experience. So if you can get your Timberland boots in two days plus the bonus that once you’re there online, you have a great storytelling experience to understand what’s gone into making them, the sustainability back story, and what they’re worn for. Isn’t that a better pathway to tomorrow?
6. Think globally.
VF is making big investments in emerging markets like China, even though the majority of consumers there can’t afford its brands—yet. “We’re working really hard on how technology will enable the growing middle class in China and how we can engage them in our brands,” Eric said. “The big income bubble that will move the needle with discretionary income really hasn’t happened yet, but it’s going to happen in the next five to 10 years. That’s the blessing of rising labor rates in China. Those folks are becoming middle class consumers. Our goal is to get them to aspire to buy our brands today even though they can’t afford them, and then remain relevant to them so that when they can afford it they buy it.”
7. Create a community.
Eric says developing a great experience is about so much more than product, it’s about building an entire community where people can interact. This is the concept for House of Vans, a new store concept built in five old railway tunnels under London’s Waterloo train station. “Since the brand is all about youth culture and creative expression, we put in an artist’s gallery where artists can come and create art, hang it and sell it,” Eric said. “Apparel art is appropriate too, so there are CAD machines where you can design and screen print a T-shirt. One of the tunnels has been repurposed as a movie theater where films are shown. Another is a brew pub for beer and burgers. Two were transformed into London’s only indoor skate park. The walls are arched like bowls, so you can skate up into them. The last tunnel is a performance space for 800-900 people ready for bands to plug and play. The Foo Fighters came and played a free concert because they liked what we were doing for the youth of the city.”
Transforming Day by Day
Transformation can sound scary to executives if they aren’t open and don’t get it. Eric and his team at VF are redefining leadership, creativity and innovation to stay relevant and valuable in today’s warp-speed culture. Looking at business through a cross-disciplinary lens and understanding the value of running an organization holistically is what leaders need to do today to be successful. Eric has taken VF to a whole new level, transforming it day by day.