Panel of Retail Execs Offers Insights Into the Industry's Future
In a session yesterday at IRCE @ RetailX in Chicago, a panel of retail executives covered a wide range of topics related to the future of the industry, including Amazon.com's growing dominance, driving elusive customer loyalty, and adapting their businesses for shifting customer behaviors.
Diana Ganz, co-founder, The Groomsman Suit; Reid Greenberg, president, Vermont's Original Bag Balm; and Brad Wolansky, CEO, Dover Saddlery, comprised the panel, with each offering thoughts on their individual businesses as well as the retail industry at large. Here's some of the conversation:
Goal for the Business in 2019
Reid Greenberg: Drive marketing at scale to accelerate the brand. We're also looking at levers in the supply chain to find savings, especially with the tariffs for products imported from China.
Diana Ganz: We're focused on effectively spending our marketing dollars. The company has grown painfully fast via word-of-mouth and SEO. We have to be profitable on our first customer purchase because of the limited lifetime value [of our customer].
Brad Wolansky: Get the basics right. We’re leaving money on the table. Get better at what we’re already doing. Shipping, for example, we want to maximize every saving possible to maximize margin.
How to Drive Customer Acquisition and Loyalty
BW: It's difficult to find new customers, especially in my niche. We still have customers coming into the business, but the numbers are small. Loyalty is fleeting — the competition is a click away. I don’t expect customers to be loyal to us for any other reason than we are the best experience for her. The right product at the right time tends to be very important for us.
DG: We compete on service and experience, not necessarily product. For example, one thing that we've recently done is launch a loyalty program for wedding planners that have sent wedding parties to our site. It's a unique loyalty program to keep the pipeline going. They [wedding planners] are the influencers in our space.
RG: The people that are buying our product aren’t really price-sensitive. Loyalty is incredible for our brand. We leverage marketing to drive distribution and brand awareness across our retail network. There's nostalgia for the brand and product. One thing we've recently done is we Launched 4 different videos that targeted a younger demographic.
The Influence of Amazon, and How Do you Compete
DG: We don’t intend on being on Amazon, and don’t really have a strategy for the platform. We’re competing on service and experience, and not price. I don’t think Amazon will ever be able to beat us on experience. We’re doing something that Amazon isn’t doing. Having a no discount strategy has allowed us to maintain healthy margins, which has enabled us to start the loyalty program, sell on the Zola marketplace. I look at those as marketing expenditures. We’re looking at other platforms to be on, but those that are more aligned with the experience that we want to offer our customers.
BW: I used to think Amazon is the devil. And it may still be, but I don’t really care. We have to be there. I can’t take the risk of not being there if she is on there and can’t buy from us. It’s not an Amazon consideration, but a marketplace consideration. We have to be there because that’s where she is. There's price parity by playing the shipping game. Products on Amazon need to be Prime eligible [to qualify for free shipping], so you have to bake that cost of shipping into the price. But there’s no customer acquisition on Amazon. Amazon is about sales for Dover Saddlery, not customer acquisition. The question then becomes, “Can I make money on this individual sale?” In my view, Amazon will keep growing based on its logistics platform, testing new categories. As long as it keeps making it easier to purchase from it, Amazon will keep growing.
RG: We have to control our brand story on Amazon. We have to be on there and have a presence. We look at our product catalog and determine what we’re going to sell on Amazon, but we're trying to foster loyalty through our own direct-to-consumer site. It will be a lot of time before anyone catches up to Amazon in terms of e-commerce market share.
Shifting Customer Behavior
RG: People aren't shopping at multiple locations; they're looking for Instant gratification. Shoppers are also interested in experiences as well. They're looking for more than just a transaction, but ownership and relationship with the brand.
BW: When our customers have a choice, in-store wins out. For example, we recently opened a new store in Aiken, South Carolina, which was big e-commerce market for us — hence why we put a store there. Since we opened our store there, e-commerce has been down 20 percent [in that market], but the total market share was up 759 percent as a result of the store.
DG: We've tested a showroom model here in Chicago. Couples want to come in and see and touch the product. Chicago has become our top market.
DG: Be the best at your niche. Doing so will allow you to compete against the Amazon’s of the world, as well as make your brand a more attractive acquisition target.
BW: Keep it super simple, and realize that you don’t do everything well. Don’t be distracted. When you have a choice, take the simpler path. It will lead you to greater profitability faster.
RG: Use your marketing dollars wisely.