ABOUT THE EXPERIENCE

BY DEBRA HAZEL

COURTESY OF SHOPTALK

Whether a retailer or brand is more than 100 years old, or an experience is brand new, adaptability is key to retail survival, said several brands and companies at Shoptalk, held in Las Vegas in March.

Names as storied as Levi’s, Foot Locker and more discussed the challenges of connecting with consumers in an ever-changing global environment.

Levi’s has been doing so for more than a century, noted Chip Bergh, president and CEO.

“Part of the key to the success of the brand is keeping one foot in tradition and history while the other is stepping into innovation,” he said in a keynote talk.

The company is celebrating the 150th anniversary of its 501 jeans, widely credited with launching the category. When Bergh joined the company 12 years ago, however, the brand was struggling and had lost its relevance, focused largely on menswear and wholesale.

Bergh began a branding campaign that focused on youth and diversified into other businesses, including women’s jeans, and other apparel such as chinos and tops. Today, women’s apparel constitutes more than one-third of Levi’s business, up from less than 20% when Bergh joined the company, with a goal of 50%.

It also began to sell its wares directly to consumers through its own stores and online.

“Direct-to-consumer is now approaching 40% of our business, and the total revenues are much bigger,” he said. “That’s really important. We’re in control of that consumer experience and can romance the product.”

Similarly, Tapestry has been focused on building its brands — Coach, Kate Spade and Stuart Weitzman — through selling directly to consumers.

“We’re a company that is 90% direct to consumer,” said Joanne Crevoiserat, CEO of Tapestry. “We can see trends as they’re happening.”

COVID-19 changed the way people shop and what they bought, she observed. With stores closed, the focus shifted to online purchases, and from dressier styles to more casual goods. When restrictions were lifted, they once again looked at more formal designs.

“Now we’re seeing a mix,” Crevoiserat said. “Customers are going to restaurants more, traveling more and using our product in their travels. They like versatility in dressing. They like a product that lasts.”

And brick-and-mortar remains a huge part of that. The company shifted away from department stores to its own boutiques to get closer to the consumer.

“We made that pivot to own the experience with the customer. It enables our brands to work quickly,” she said. “Stores are still important.”

What products will succeed can be surprising, said Ulta CEO Dave Kimbell in his keynote interview.

“When the pandemic struck in 2020, we thought fragrance would struggle. No one was going out,” he said. “In fact, it took off. … They weren’t wearing fragrance for others; they were wearing it for themselves. It was part of their self-care routine. That will drive the category for years to come.”

Its 350 standalone stores and in-store Target locations are also driving the company.

“It comes to life in a physical environment, and we work hard to create an environment that is fun, accepting, creating,” he said. “Beauty can be intimidating, so we’re training our team to deliver fun.”

The digital experience complements that, he continued. Sales from in-store consumers who begin shopping online increase their spending two and a half times.

And look for more expansion in products and categories. Ulta continues to look for new lines and is pursuing what Kimbell called “the expanded definition of beauty, that it’s connected to wellness. We will need new products and introduce new categories that will allow us to expand our assortment. In many ways, we’re just getting started.”

Foot Locker is closing some 400 stores as it reinvents its real estate portfolio, said Mary Dillon, president and CEO.

In preparation for its 50th anniversary next year, the company is “simplifying our business and expanding it.”

Stores are becoming more experiential, and more will be located off-mall, she said.

“That’s been a macro trend for a while,” she observed. “We have plenty of stores in malls, and we’re a traffic driver. But with C and D malls, it’s the plan to move.”

Community center stores are among the top performers, so those will expand. Off-mall stores will eventually become 50% of the portfolio.

“We’re reshaping the portfolio to focus on the types of store formats and geographies so we’ll see what succeeds. Square footage will be up slightly over the next three to four years,” she said.

Tech companies also are looking at the customer experience, said several exhibitors. In an increasingly cashless society, and one in which shoppers often leave items in their online carts because they can’t remember a credit card number or the card has expired, easing online transactions is critical.

Early Warning Services, an organization owned by top U.S. banks, has formed Bank Wallet, a digital wallet to address online payment approvals. The subscription service is free to merchants in its introductory period.

“We’ll take the data and build the wallet for the consumer,” said James Anderson, managing director of Bank Wallet. “It’s not a Bank A wallet or a Bank B wallet, it’s their wallet.”

In addition, consumers won’t have to remember a 16-digit credit card number, which will be replaced by a secure token.

“You’ll never have to get another card,” he said.

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