Four experts in the world of men’s fashion joined Karen Alberg Grossman, Editor in Chief of MR and mr-mag.com, to answer the probing question “Retail Reality: What Now” at a well-attended panel discussion at MRket/Project on Tuesday, January 24.
Robin Lewis, a menswear veteran and founder and CEO of The Robin Report, began by telling the audience that men’s retailers were facing a “tsunami” and those who wanted to survive needed to move as fast as possible, since the “tsunami” could wipe out every old world retailer. He said the issues went beyond the prevalence of e-commerce, pointing out that stores were currently overstocked and overstocked. He pointed out that as demand for product slows down, stores were resorting to insane promotions and opening too many outlet stores, both of which he said led to deflation of prices and profits.
Lewis also talked about how retailers must deal with the next big consumer segment: millennials. “They don’t want to go to big buildings full of stuff, and they don’t really want or need more stuff,” he said. “They prefer experiences.” He went on to explain that smart retailers are focusing on innovation, including better use of data, increased personalization, digital pay and other issues that could help differentiate them from the competition.
He also noted that stores need to make themselves “cool,” which includes buying exclusive brands, adding more private label and leasing part of their space to concessions and pop-up shops. Expanding on the topic, he said stores would have to “flip” their vision and take their lead from the entertainment and hospitality business. “The real question they have to answer,” he said “is what can they do to get people to come back to their stores over and over again? They need to become a place where people can socialize, become educated, and get personal advice and service.”
Tom Ott, SVP/GMM of Saks Fifth Avenue, also spoke about the same issues, admitting that baby boomers, which is Saks’ current customer base, are “beginning to clock out” and stores need to move towards thinking how to best serve millennials. “Still, I think it’s an evolution as opposed to a revolution,” he said.
According to research Saks is using, millennials favor mobile offers and mobile devices over formerly traditional media (i.e. magazines) and rely strongly on word of mouth, especially from so-called “influencers.” (He pointed to the success of a recent collaboration with NBA star Anthony Davis on a capsule collection.” Ott also noted that younger customers were as interested in “shopping a look” as they were in sticking to any one brand, favor brands that are all about “fashion” and newness.
Nonetheless, Ott stressed that customers of all ages truly value great service and experiences, telling the audience that Saks new store at New York’s Brookfield Place (which will open next month) will include an apothecary, barber shop, shoe-shine station, and Fika coffee bar, among other amenities. “Consumers need to be delighted, not disappointed,” he said.
Ott also refuted any claim that the proliferation of Saks off-price store, Saks OFF 5th, was hurting its primary store business. “We carry the product first and they carry it second. It’s really a complimentary business,” he said.
Bob Mitchell, co-CEO of the Mitchell Family of Stores (which now number eight specialty stores around the country), said his customers –which still trend toward baby boomers – are happiest when technology is integrated with an exciting in-store experience. “And what really keep people coming back to our stores are great people,” said Mitchell. He spoke of making sure Mitchells’ sales staff act as style advisors, both in-store and online, and also pointed out that men are looking for such service innovations as the ability to reserve product online to see and try on in-store, as well as virtual closerts where men can keep track of all their previous purchases.
Mitchell also addressed the issue (brought up by other retailers in the audience) of how to compete with vendors who open their own stores, sell to off-price retailers, and otherwise compete with specialty stores. He said the biggest issue is price transparency, as consumers can now easily compare prices on the same item among various retailers. “We need vendors to protect their own brands, or we will simply cut back on how much we sell. One answer is having more exclusive products of these brands in our stores. We also have to re-think our promotional calendars.”
As to whether the concept of luxury remains important to consumers, Mitchell was steadfast. “I still believe that as long as wealth exists, people will want luxury goods. My idea of luxury, however, is something that makes the customer feel special, something to which they have an emotional connection, and which they can afford. It can cost $25 or it can cost $5,000. And the important thing is that we need to educate our younger clients about the importance of luxury.”
The final speaker on the panel was Simon Graj, founder and CEO of influential branding agency Graj+Gustavsen. He also spoke about the importance of focusing on the millennial customers, stating that the younger generations prefers to buy from brands that have a strong purpose or “make money while also doing good.” He also added that they would not be seduced by brands that send out a “fake message.” He also stressed that brands that do not cost a lot (such as Uniqlo) or have discovered successful disruptive models (such as Harry’s) are likely to be those that survive.
“This is the best marketplace of entrepreneurial opportunity I’ve ever seen,” he stated. “I am more inspired than ever before.”