Rapid, dramatic changes in shopping habits have pushed retailers to transform their businesses in a variety of ways. But if there’s one thing all merchants should agree on, it’s that innovation is fluid and must be a continuous process. “There’s always going to be a ‘work in progress,’” said Matt Alexander, Co-Founder and CEO of Neighborhood Goods during a panel at The Lead Innovation Summit, held in the Brooklyn EXPO Center July 9-10.
“You have to have a general sense of self-awareness and willingness to acknowledge that you don’t necessarily have a finished product and the answer to every problem,” Alexander added.
Amanda Baldwin, President of Supergoop!, a protective skincare brand designed to be worn daily, shared similar advice: “Don’t consider any decision final. The customer truly is ultimately what matters; don’t be afraid to change something if you make a mistake.”
The panel, titled: What The Modern Consumer Wants: Living In A Pull Vs. Push World, revealed how three retailers have adapted to a consumer environment where the brand has to meet the consumer at all shopping channels to win their attention, instead of the other way around. Also including Caroline Gogolak, VP of Retail at SoulCycle, the panel was symbolic of the overall summit’s mission: to connect leaders in apparel/fashion and technology through stories surrounding brand communities, AI implementation and sustainability.
Executives from some of retail’s most forward-thinking players, including Eloquii, Gap Inc.’s Hill City and H&M Group, convened to share insights on these topics, while innovative retail companies such as Greats, UNTUCKit, Ayr, Hatch, Rebag, Knot Standard, Snowe, Rosenthal, Zenni and MyVerte marketplace founder Project Verte showcased their products to the 1,000+ attendees on the event floor.
Eloquii, Greats And Hill City Thrive Through Brand Communities
Another panel focused on how three young retailers — Eloquii, Greats and Hill City — have leveraged their relationships with passionate consumers to grow their brands. Eloquii, originally launched in 2011 as part of The Limited and then shut down shortly after, was relaunched in 2014 because the “customer base freaked out,” according to CEO Mariah Chase.
Chase said that the company noticed blogs from former shoppers lamenting that one of the few options for plus-size apparel was no longer available had gone viral. “The entirety of the Eloquii existence and relaunch was founded on this idea that we were listening to these customers and coming back specifically for them,” she said.
While Eloquii initially had no plans to expand to stores upon its relaunch, the former online-only has retailer opened six stores over the past two years. One interaction on Instagram, which came from a customer asking when they would get a store in Tulsa, Okla., stood out to Chase.
“It was almost like, ‘I challenge you to do this offline,’” Chase said. “When you talk about having community, there’s no better place to have community than those four walls.”
Community also can come from participation if it’s managed correctly. Noah Palmer, General Manager of Hill City, attributes much of the company’s rapid success to the company’s Wear Tester community program, a group of 600 product testers that offer feedback and recommendations about the performance and comfort of newly released apparel. The 600 product testers come from a much larger pool of 30,000 applicants, who applied via chatbots in Facebook Messenger and Twitter direct messages.
This “army of advocates” has enabled Hill City to balance function and fashion, even when Palmer didn’t always think that was possible when he oversaw the launch of the retailer just nine months ago.
“When we set out with this Wear Tester program, we liked what we were getting from a feedback standpoint,” Palmer said during the panel. “What we weren’t thinking too much about was what being part of something was going to mean to a lot of these guys. It was important to tell stories of some of our best wear testers, and that lifestyle that represents what we feel like Hill City is. We sent out this catalog to a low distribution of shoppers and there were a lot of guys that mailed us saying, ‘Hey, I really appreciated the story you told around Bobby,’ or sharing it on social pages.”
“Community” is a term that is often associated with sneaker culture, which relies heavily on shoppers who collect pairs as a hobby. Greats leveraged this popularity in its first year of business by not spending money on advertising, instead relying primarily on organic, community-driven efforts. But Founder and CEO Ryan Babenzien acknowledged that the company’s growth since 2015 has developed further by moving away from that initial strategy as the retailer seeks to acquire new shoppers.
“The hype of the sneaker community is, in my opinion, unsustainable,” Babenzien said. “As a new brand, we didn’t want to be chasing these kind of hype trends that are just really expensive. In that process, we started to define our product offering and realized that we had a different customer base that was interested in the brand. We started as men-only, and in 2017 we offered sneakers for women. We have young moms and dads — there’s multiple communities within our shoppers.”
This led the Greats team to build out more content stories for its footwear, as well as in-store events that complement an offering entirely created under one vertically integrated supply chain.
H&M Plans Sustainable Future, Minimizes Overstock With ‘Amplified Intelligence’
Communities can play a big role in driving the consumer-facing end of today’s retail experiences, but artificial intelligence often plays just as big a role by enabling merchants to make the right back-end decisions. Arti Zeighami, Global Head of Analytics & AI at H&M Group, capped off his session by revealing that the fast fashion retailer processes 900 million transactions per year, further necessitating H&M to prioritize AI.
However, Zeighami and the H&M analytics team have a different term for “AI”; they call it “Amplified Intelligence,” because it’s designed to improve logistics and help the retailer prioritize ethical and sustainable choices (namely minimizing overstock and overproduction).
“By putting the right product in the right market in the right store at the right time, we will not only show that our customer offering is the best, but also show that we are utilizing too much power,” Zeighami said.
With improved logistics efficiency, H&M’s goal is to cut inventories to 12% to 14% percent of sales by end 2022. Additionally, H&M now seeks to detect both rising and falling fashion trends.
“The controllers typically will see everyone else buying from mass markets and say to the buyer, ‘We should buy more of this product even if it’s on a downswing,’ so they end up having an overstock of that product,” said Zeighami. “By amplifying intelligence, if we were able to give the buyer this tool back then, she would have been able to prove her gut feeling and say ‘We shouldn’t buy this. I have data that can help me make a better decision.’”