Fashion Retail Ecommerce

Barneys.com – Advice From My Heart To A Brand That I Love

A business acquaintance recently asked what I thought of Barneys.com - a question that drew from me a deeply personal and emotional response.

I am a huge fan of Barneys New York. When I lived in New York City, Barneys on Madison Avenue was a regular haunt. Going home happy didn’t always mean buying something; just a visit was enough to leave me inspired. The products, the venue, the shoppers - it was my favourite museum in all of New York. MOMA is nice, what can I say? Even now, whenever I’m in town, I make a point of visiting Barneys.

With all that buzzing through my head, the opinion I somewhat sadly rendered was, in a nutshell, Barneys New York needed to up its e-commerce game.

Some might say I’m a bit out on a limb with a judgement like that.

The more I consider it, the more I think my brash little opinion deserves some explanation at length. Because the storied brand of Barneys New York simply isn’t being well served by their online presence.

The Luxury Market Remains In Good Health

The global personal luxury goods market, though cooling its pace, maintains robust growth, notching 10 percent for 2012 and an expected 5-6 percent through 2015. The online personal luxury goods sales has charted even faster growth of 25 percent for the last few years according to eMarketer.

It’s no wonder every luxury player - brick-and-mortar or online pure-play - is flocking to the online personal luxury goods space for a piece of the pie. The online luxury fashion landscape is more crowded and more competitive than ever.

In the pure-play space, Net-A-Porter is the clear winner. Its expansion through Mr. Porter and acquisition of Shouke in Hong Kong lend the brand near-dominance in online global luxury fashion. FarFetch will certainly continue to make a name for itself, especially after securing a $20 million strategic investment from Condé Nast recently. The top-of-mind pure plays - from North America to Europe to the Middle East and Asia - would include Shopbop, SSENSE, YOOX, TheCorner, LuisaViaRoma, Boutique 1 and so on. And let’s not forget Amazon Fashion, still in the making.

In the brick-and-mortar space, Neiman Marcus, Harvey Nichols and Lane Crawford are all aggressively pursuing the biggest luxury market in the world, the Greater China. Here in Canada, Holt Renfrew will soon unveil its online e-commerce storefront.

In addition to such intense and fierce competition, Barneys New York is also faced with new business models exemplified by the likes of Moda Operandi, Rent The Runway, Gilt and others emerging every day.

Changing consumer priorities and values, the blurring of boundaries between luxury and ordinary, the technology revolution and a complex omni-channel environment are yet more challenges for Barneys New York to sort.

The good news is that Barneys have had great financial success in the last two years with EBITA growth of 40 percent. With 2012 sales of $800 million, the company aims to achieve targeted sales of $1 billion in the near term. To maintain such impressive momentum, Barneys must fully maximize its e-commerce potential.

The Disappointing Reality of Virtual Barneys

The current Barneys.com store front sadly fails to reflect the iconic Barneys New York brand. Remove the Barneys New York logo and the underlying website could be any other mass-fashion retail website, impersonal as a cash register. Not to put to fine a point on it, Barneys.com is a plain vanilla index of the goods - with a buy button.

Fashion is a journey of discovery and inspiration. Barneys.com can’t just drop every visitor directly into the purchase path upon arrival!

Ironically, the concept we bandy about today under the rubric “curate” was pioneered by Barneys back in the day. Only then, they called it their “edit” of a designer. Even when they carried the same labels as competitors, Barneys stamped their merchandise with a viewpoint all their own.

The online assortment offers no such sense of curation. Designers A-Z presents the loftiest names in fashion in alphabetical order, phone book style. Who wants to shop from a phone book?

Barneys is widely perceived as exclusive and avant-garde - an art-gallery-meets-luxury-emporium proposition. The Barneys.com experience must be aligned with this proposition. Luxury products primarily satisfy emotional needs.

 

Reach Out To Your Fans

Fashion is about people and communities. In this respect, Barneys lags behind its competitors in both the luxury or ordinary categories. The Barneys fan base on Facebook, Twitter, Pinterest and Youtube is negligible. By comparison, Peter Som, a New York based fashion designer - one guy! - has over 3 million Pinterest followers; Barneys has a scant 40,000.

Without a serious online outreach to its fans and communities, it is cost-prohibitive - and mission impossible - to build and maintain lasting customer relationships on a comparable scale.

Bring The In-Store Experience Online

So many fashion retailers are content to copy the Net-A-Porter blueprint. This shouldn’t even be a consideration for Barneys.com. Instead, Barneys must adopt a holistic integrated omni-channel perspective that leverages its beautiful flagship and CO-OP stores to recreate online the incomparable in-store experience that makes Barneys Barneys. This is a tactic the pure plays can’t copy.

Instead of leveraging this strength, Barneys online treatment of their retail locations is yet another missed opportunity. Suppose I’m planning a trip to LA and might consider adding the Beverly Hills store to my itinerary. What does Barneys offer in the way of seductions to seal the deal? A Google Map of the store location!

Barneys.com should immediately begin showcasing each of its beautiful, museum-liked stores. On the 8th floor of Barneys New York, you can visit genes@co-op, an interactive cafe with 30-foot long digital banquet tables that feature an interactive ordering system and an interface that allows you to view fashion content and even order product while you dine. This amazing experience is mentioned nowhere on Barneys.com!

 

Tell the story well and customers will flock to the stores. If naysayers point to limited channel-specific sales metrics, forget about online and offline. Focus on your brand and your customers. There are online customers who are transported at the thought of shopping at Barneys, but may rarely have the chance. Let them experience the stores online - it all adds to the value proposition of a Barneys online purchase.

What I miss above all when I visit Barneys.com is the sensation I feel when I stand on the Barneys New York selling floor. As a fan and customer of Barneys and a lover of fashion and shopping, I count on Barneys New York to take a leadership role. This, after all, is the store that introduced Giorgio Armani to America.

It’s time to disrupt the status quo. If anyone can do it, Barneys can.

 

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The Fashion Retail Revolution

Technology revolutions don’t happen overnight.

Today, we tend to imagine the automobile’s ascendancy over the horse was a foregone conclusion. Yet, as late as 1913, Henry Ford was running ads touting the advantages of his Model T Ford over “Old Dobbin, the family coach horse.” The fact that a case even needed to me made against the family nag — “has only one-twentieth the strength of a Ford car – cannot go as fast nor as far – costs more to maintain – almost as much to acquire” — suggests a still-thriving competitor.

The age of the horse may have passed, but somebody forgot to tell all the horse owners.

Retail today may be in same straits as the horse in Henry Ford’s time; the remaining days could be few, but try convincing the large number of retailers still in the game.

I was reminded of this recently while attending Retail’s BIG Show, the National Retail Federation 102^nd Annual Conference and Expo in New York City. After experiencing up-close the latest in technology and trends and after considering the insights shared by leading retail vendors and retailers, I see a retail future that won’t leave much room for past practices.

Fashion retail is being disrupted in unprecedented ways.

The Internet, tablet devices, mobile technology, social media, the economic environment and changes to consumer behavior are all conspiring to alter the competitive landscape. 

For the first time, consumers are ahead of retailers. Retailers are playing catch-up. Retailers must re-imagine the future of fashion retailing and disrupt the status quo. If we fail, the industry we love will be gone and forgotten.

Retailers must re-think 5 key areas:

Product

You already know you can’t compete with Amazon on price; Amazon has a very different business revenue model based on products, marketplace, advertising, technology services and more.

There are Long Tail retailers in every unimaginable product category from every corner of the world competing with you. Your products must now stand out in a sea of similar products. Your ability to curate products with an eye that’s distinctly your own will be your most important competitive advantage.

Then, there’s value. The new frugality is the new reality. The current recession is predicted to last for many years and persist on a global scale.

Value has become the consumer’s #1 priority. The fashion spirit is still willing, but the fashion wallet is weak. Rather than splurge on a luxury purchase, today’s shoppers may prefer to Rent The Runway. You must figure out how to add value in consumer’s life through your product offerings. To do that, your merchandising function must stop operating in silos or by channel.

Content

Too many online stores are just electronic versions of the brand’s print or in-store product catalogue, missing entirely the emotional appeal of branded aspiration. This is a recipe for commodification. When all you are selling is a dress, a shirt or a pair of shoes, you have to go head-to-head and compete on price with other retailers selling a similar or identical dress, shirt or pair of shoes. This only leads to lower margins, lower profitability, financial losses and the death of your company.

Smart retailers are able to escape this trap by creating more wants for the customers to buy and convince consumers to buy those wants at full price. They do this by effective curation. They tell product stories wherever the customers are. Retailers could take a page from Net-A-Porter in curating fashion product and creating desirable fashion content that has commercial values. 

By now, a fashion and content editor should be playing a critical role within your organization. You don’t have one? Hire one.  

Customer Experience

The Web is not an innately intimate or personal medium. Your opportunity is to make personal by filling your online store with your brand personality, values and promises. Amazon has proven that, across the Web, Amazon still delivers the best customer experience. Amazon has topped the list of most satisfied customers for many years now. 

Too many retailers still operate as though a distinction existed between online and offline channels. Customers see only one thing — your brand. Focus on your brand and your customer. Deliver a consistent experience online and off. Create a better online experience that builds on and blends with the offline experience. Selling an emotional experience through an integrated and omni-channel approach is retail nirvana. But achieving this higher state will require you to overhaul most parts of your company’s system and infrastructure.

Social Community

The store of the future will be merchandised by the people for the people. Brand dictatorship is out; a brand voice shared among your stylists, tastemakers and customers is in. Brands must embrace and get more involved with their communities. One of the best examples is Lululemon’s ambassador program, which spotlights local athletes and trainers as members of a virtual worldwide community that embodies Lululemon core values. Brands must be prepared to give stylists, tastemakers and influencers a voice on their marketing team.

At this stage, brands have only scratched the surface in their efforts at listening, responding, scaling and commercializing social media. Social search engines such as Facebook Social Graph will force brands to exploit and commercialize big data to create content that’s both more relevant and more localized.

Talent

None of the above will be possible without the right talent. Enlightened leadership and strategic alignment drive innovation and support change.

Today’s team members — especially front-line staff — no longer work in silos. They conduct sales, customer service, social media marketing and many other functions. How do you transform them from associates to brand ambassadors?

Above all, today’s consumers are looking to do business with leaders, brands and companies that resonate with them — whether through a sense of shared values or a sense of shared humanity. This requires a reboot of your talent agenda and requirements. 

Today is a scary time. But for brands and companies who get it, who are able to make sense of it, this is an exciting time, a time of great opportunity.

Those who don’t? Economist Joseph Schumpeter called it “creative destruction.”

How is your company preparing to face this great retail revolution? Please share your thoughts with us.  

 

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10 Big Questions To Guide Your 2013 E-commerce Plan

While your customers are pondering the Holidays, many of you are still finalizing and locking down your 2013 plan. For most of you, February 1st, 2013 will be the beginning of your 2013 financial year. 

The coming year will be more of a challenge than ever. The economy remains uncertain, owing largely to continued worry over the Fiscal Cliff in the U.S. and the macro conditions in the Eurozone. In our own industry, the ever-changing and often-unpredictable technology space continues dictating the rules of game; content proliferation, changes to the tax code, privacy laws and many others factors will be key drivers. 

As Canadian fashion retailers, your competition is no longer Joe or Jill Shopkeeper at Eaton Centre or on Queen Street, Bloor Street, Sainte-Catherine Street or Robson Street. You are now officially competing against the global powerhouses. These are the titans of retail and household names - Amazon, eBay, Gap Inc., Target, Nordstrom, Victoria’s Secret and many others. The Bigs. These retail giants bring to our shores not not only their bricks-and-mortar shopfronts, but the cutting-edge technology and e-commerce know-how to wow our customers into their seamless omni-channel branded experience.

While you may lack the resources, retail footprint and marketing throw-weight of the majors, e-commerce and digital marketing can be powerful equalizers. In the asymmetrical warfare of digital commerce, “smart” isn’t something The Bigs can buy at volume discounts.

Given the odds we now face, your 2013 business plan and strategic planning need to take into account the fresh challenge represented by these new rivals for hearts and minds (not to mention the loonies) of Canadian shoppers.

As you are reviewing or working on your e-commerce plans for 2013, I would challenge you all to think through the following questions. Having the right answers will help guide your strategic planning and development for the coming year and well beyond.

Here are the 10 big questions to guide your 2013 e-commerce plan: 

1. How should you deliver a complete branded experience? Most retailers only see their Web sites as cash registers. Online stores are generally designed to funnel customers into the checkout. In the real world, however, the most, about half your customers are not coming to your website to buy. The customers might have priorities and intentions other than a simple purchase. How do you deliver a complete branded experience that is relevant with all customers — regardless of where they are in the shopping journey?
2. How do you deliver an inspiring fashion shopping experience? Fashion items are not commodities. Fashion is as much art as commerce. How do you deliver an inspiring and fun shopping experience? What is the social component of that experience?
3. How can you leverage bricks-and-mortar stores for growth? Your current online penetration rate might be in the single digit whereas your company have over 100 bricks-and-mortar stores. How best to leverage that footprint to drive overall brand growth? What is your omni-channel strategy?
4. What should be your e-commerce business model? Should your brand continue to operate the way it has? Or should you consider evolving your e-commerce business models into “endless aisles” (to extend your in-store assortment) or best-of-brand (to offer your best and signature products) to drive aggressive growth into the future? 
5. How can you enhance the product experience? With most fashion apparel retailers, the existing online product experience is dry and limited. Customers are typically served with one large photo, 2 or 3 small thumbnails and workmanlike copy that often consists only of bullet points. Is this enough? Isn’t this a sadly impoverished online experience? We’re selling fashion, after all. What can you do to enrich the product experience to seduce and excite your customers?
6. What is your content strategy? YouTube led the way in user-generated content. Content has since proliferated — across the Web and in every form imaginable. What types of content should you be providing? Should you leverage consumer participation to help create content? Where should you be distributing the content? Are visual blogging sites such as Tumblr or  Pinterest tools you’re making the most of?
7. How do you get to know and engage with your customers? Do you know your customer so well you can predict what she’ll want and when and how she’ll want it?  How will you build lasting relationships with your customers? These are key questions to answer in order to drive customer productivity and life-time value. 
8. Should you go global? The Internet makes border vanish. E-commerce has the power to connect consumers with retailers from around the world. Hard as it might have been to image just a few years ago, today we can order a sweater from Net-a-porter.com and have it shipped directly from London to Montreal. Today we must have an eye out for global opportunities — especially in the fastest-growing Asian and BRIC-country markets. 
9. How will you use big data? Amazon is one true winner when it comes to big data. The company is able to quickly understand and commercialize its findings to build and sustain long-term growth. Do you have the know-how and talent — analysts, programmers and software engineers — to find the gold amid the mountains of data created by every customer visit?
10. What is your talent agenda? How do you develop and retain the best e-commerce talents available? As an organization, how do you stay relevant to your employees? Will your organization and culture be relevant to the wants and needs of the emerging technology and e-commerce workforce?

Have you nailed down your own top priorities for 2013? If you have any questions regarding your business and strategic plans for 2013 or beyond, please don’t hesitate to reach out. You are also welcome to share your ideas in the comments.

 

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Holiday 2012 — What Have We Learned?

Black Friday and Cyber Monday already seem like happy memories. And from what the numbers tell, 2012 is turning in a strong holiday shopping results.

Online sales have exceeded expectation. Canada’s online Black Friday results were up 6.5 percent over 2011 while Cyber Monday sales grew a robust 23 percent.

Before it was upstaged by Cyber Monday promotions, the second Monday in December was historically online’s biggest shopping day. This year, many retailers — including Walmart and Zappos — added Green Monday promotions to the season’s shopping calendar.

Despite America’s dancing on the Fiscal Cliff and the Euro zone’s waltz with economic and monetary challenges of its own, consumers appear poised to continue opening their wallets for the remainder of the holiday shopping season.

According to Federal Express Canada, 55 percent of Canadian holiday shoppers plan to purchase online this year — a 10 percent increase over 2011.

The Canadian retail landscape is forever changed. It is only a matter of time before Black Friday and Cyber Monday trump Boxing Day.

As we approach the holiday finish line, it is vital that we hindsight what has worked and scrutinize our challenges to keep growing our businesses and position our industry for an even more successful season next year.

What have we learned so far?

1. Fashion apparel, footwear and accessories are the fastest growing product categories.  Canadian Cyber Monday apparel sales topped last year’s performance by an astonishing 77 percent. Canadian consumers are learning to love online apparel shopping as much as our neighbors to the South, promising a bright future for those of us who toil in fashion e-commerce.
2. Free shipping is no longer optional. It is a bare minimum offer. Even then, it is no longer perceived as special. According to the National Retail Federation, 92 percent of online retailers offered free shipping during the holiday 2011 selling season. Over 200 merchants participated in this year’s December 12 Free Shipping Day in Canada.
3. Deep discounts. Storewide discounts of 20-50 percent are no longer uncommon. Retailers need to pay attention to the green eyeshades to make the P&L work for such aggressive and deep discounting on fresh merchandise. Margin is a terrible price to pay for increased traffic.
4. Mobile is a game-changer. At the season’s outset, Deloitte forecast that 68% of smartphone owners would use their devices for holiday shopping. With smartphones and tablets at their fingertips, consumers are fully empowered to set the terms of their own shopping. With merchandise being comparison-shopped at the point of sale, a retailer’s best price better be THE best price.
5. Showrooming. Retailers must come to terms with showrooming. When sellers compete on price, the lowest-cost producer wins. If that’s you, put your feet up and relax. If not, you need to get busy differentiating your business with tactics beyond promotions. Citing the showrooming challenge, Target sent vendors a letter in early 2012 requesting more store-exclusive products. World class service can also be a distinguishing attribute, a perk more and more retailers will need to pay attention to.
6. Social shopping. According to a holiday retail report by American Express Co., nearly a quarter of online shoppers take advantage of deals offered via social media, giving retailers with a strong social media presence something to like.
7. Omni-channel. While Canadian online holiday shopping has grown by double digits, Canadian holiday retail sales are expected to rise only 3.5 percent, according to Ernst & Young. Meaning, the growth in online commerce owes mainly to consumers shifting channels. Omni-channel must now be a top priority.
8. Global competition. You are competing with international brands and long-tail retailers and sellers from around the world. You need to bring your A-game every day, not just during the holidays, but every day of the year.

What lessons has your business taken from Holiday 2012? Let’s hear from you!

 

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The Retailer’s Last-Minute Check-List for Holiday 2012

We expect a strong online holiday shopping season.

Canadian retail sales are projected to grow 1-2% this holiday. 65% of Canadians plan to purchase one to ten gifts this holiday season, with gift cards/money, clothing and toys the top three choices.

Almost 60% of Canadians — up from 49% in 2011 — will turn to the Internet for some aspect this year’s shopping.

For many Canadian retailers, Holiday 2012 is make-or-break time for customer loyalty. The competition seriously ramps up once Target opens its Canadian locations in March, 2013.

 

When it comes to price, consumers have sharper pencils.

Against the backdrop of a languishing economy, consumers are holding fast to their wallets. 

Price remains the strongest single influence on Canadian shoppers. Nearly 70% citing “whomever has the lowest price” as decisive when choosing where to buy.

Given these conditions, larger numbers of consumers will go online to stretch their budgets.

 

Mobile devices are the price-comparison killer-app.

While only 40% of smartphone/tablet users make purchases via their devices, an astonishing 70% employ their devices for product research, with Amazon emerging as the shopper’s gold standard for comparison pricing.

In retail-dense Toronto, over 15% of shoppers report using their mobile devices for making price comparisons in-store!

If you’re relying on promotions to keep your edge in the marketplace, you’re going to need a much sharper pencil than your shoppers.

 

Build on your strategy, but keep it flexible.

November and December are the most important holiday shopping months, but with aggressive doorbuster pricing timed around Black Friday events, we can expect a front-loaded shopping season.

At the outset, execute your foundation merchandising according to plan. But as the season progresses, read-and-react based on the insights you gain from daily sales data.

Through their purchase behavior, customers are telling you where your winners are; don’t argue with results.

Give greater prominence to the items and categories your customers are gravitating toward. On the flip side, resist the temptation to rescue your neglected “darlings” that customers just aren’t that into.

To win at the holiday season, retailers must win at the top holiday categories. Remember the 80/20 rule and focus on key categories such as casual shirts, dresses, sweaters, pajamas,outerwear, hats, scarves, gloves and boots. 

Last-minute check-list to win-at the holiday: 

• Deliver a balanced assortment to achieve your financial goals — November vs. December, self-purchase vs. gifting, fashion vs. basics, price points, silhouettes, themed collections, etc.
• Review key product pages to remove any barriers to purchase. Don’t confuse your customers. 
• Take every opportunity to cross-sell. Support all key product pages with complete-the-look suggestions and key gifting items. Context is everything. Propose the right product at the right time.
• Make it easy for the customers to shop. Especially at the Holidays — and especially when gift-buying — customers are looking for guidance. Curate and propose the holiday looks and gift ideas.
• Get the word out. Share your curated contents on social media including Facebook, Pinterest, Polyvore, Tumblr and let everyone discover your brand and your products. Don’t underestimate the power of picture-sharing. Research shows visitors referred from Pinterest are more likely to buy compared with referrals from other social media.
• Provide a seamless omni-channel shopping experience. Coordinate Web site content with store events and merchandising to reinforce key messaging with customers.
  

 

Holiday inspiration.

If you’re seeking last-minute inspiration, one of the best merchandised, most thoughtfully curated Holiday Gift Shops is at landsend.com.

One of the earliest cataloguers to embrace the Internet in a really big way, Lands’ End manages to stir the flavor of its brand into the smallest details. The Gift Shops are no exception.

Image: Lands' End

Now, let’s hear your thoughts. How has your own planning for Holiday 2012 differed from retail seasons past? Please share your comments.

 

NOTE: For retail statistics quoted in this update, we’ve drawn on the excellent research contained in the recent Deloitte® publication 2012 Canadian Holiday Outlook.

 

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