Post pandemic retail distribution has entered a “Field of Dreams” like state. “If you build it, they will come” is the takeaway I got from FGI’s recent retail symposium entitled “New Opportunities in Distribution.” The esteemed panel included Kimberly Carney, Founder & CEO, Fashwire.com; Abra Potkin, Co-Chief Executive officer, NOW//With; Amish Tolia, Co-Founder & Co-CEO, LEAP; and Marissa Galante, Fashion Director: Women’s Accessories and Beauty, Bloomingdales. Richard Baum, President, Retail Marketing Society, served as moderator.
As someone who is still familiarizing herself with the “dolphin speak” of marketing, technology, and digital retail lingo, I had a time figuring out how to decipher the onslaught of jargon. However, what I could glean was still fascinating.
According to Carney, who beamed in from her company’s home base in Seattle, Fashwire “fills the white space with a proprietary swipe technology that lets our brands be influencers through social integration and by leveraging AI. We have a unique partnership with brands giving them a voice for the consumer through a two-sided marketplace business model platform.” Translation, please: Fashwire, according to Crunchbase, is a business-to-business (B2B) data hub to navigate customer demand and a business-to-consumer (B2C) shopping platform powered by consumer preferences.
Carney described how both the nonshoppable website and shoppable app connect nearly 400 global brands in 40 countries to consumers who may not be familiar with them. Almost like a dating website, the mobile app allows you to swipe and tap either a heart or an X as you view the collections. Glosswire.com is their newest launch – a beauty platform with just under 100 new brands. Revenue for both is generated not by selling products but with a percentage of the eCommerce, app fees, and advertisements.
While her sister is the founder of the fashion brand Tucker, Potkin came to the fashion world after years of creating content for various TV stations. As she created the Rachael Ray Show, she noticed that Ray “sold product without trying,” hence the idea to “bind content and commerce together in a technology platform.” NOW//With is billed as “the destination for curated shoppable entertainment” on their homepage (they are currently in beta, due to launch in August) and started with an initial $4.5 million funding – which I garner is an impressive beginning.
Videos of athletes, musicians (most recently Nicole Scherzinger of The Pussycat Dolls and Macy Gray), fitness coaches, and other talents will share their favorite things (a la Oprah) and not necessarily their brand (if they have one) while allowing the viewer/customer to “seamlessly check out” products. “Covid had a silver lining,” Potkin said, allowing them to reach out to more celebrities. She name drops “LeBron” – I’m wondering what method they use to screen those that could potentially alienate consumers or, worse, become toxic or canceled. “Not that we won’t step into a store again, but we will want things curated,” said Potkin. “Like Oprah, we want to ‘push it through the pipes.’ Along with ‘let’s go shopping,’ we say, ‘let’s go sharing.’ It’s social commerce.”
According to its Amish Tolia, LEAP is “a platform model that helps brands build their retail channel in a turnkey way. Our platform provides lower risk when commercializing a retail space – an alternative to doing it yourself. It’s like Shopify for offline,” he explains. “We have a couple of dozen stores in eight markets. One example is Faherty (as he pointed to his shirt from the brand) – we power the whole thing, store design, staffing, front and back of the house. Manufacturing and producing the product is all the brand needs to do. We have a consignment relationship, whereas we don’t buy the product. Stores are fully omnichannel with a universal inventory. We have turned retail into a single line item.”
LEAP charges the brand for rent and costs of running the store and a percentage of in-store sales. There is a formula for this service, according to Tolia. “Only the front of the store is unique,” he adds. “It is highly generic otherwise using a singular operating system to build a platform strategy.” How is this approach less risky?
For one thing, LEAP owns the leases. “We might take a 10-year lease but may switch out the brand occupying the space providing flexibility.” How would a brand qualify to be of interest to LEAP? “We have a fairly diligent vetting process to qualify brands according to revenue size,” he said.
While all other panelists represent a startup, Marissa Galante works to bring good old Bloomingdales into the digital age. “I work with product in its inception phase, finding new brands through to eventually interfacing with customers,” she explains. She also markets Bloomingdales on-screen, cultivating personal relationships and virtual events “bringing product to life,” which was her “Covid silver lining.” “I’m always looking to present compelling content – educational and entertaining whether it’s styling tips, master classes in beauty with makeup artists, or even jewelry designers such as Temple St. Clair’s insider behind-the-scenes look at their studio process.”
Galante markets Carousel, a “curated products from all over the store” space which recently featured a “Stella-bration” of designer Stella McCartney’s favorite things. “Stella was our guest curator, so we featured sustainable products such as Tata Harper cosmetics and eco-friendly home products,” she said. As the fashion director, Galante is responsible for customer messaging, including trends, holidays, and general guided discovery curation. Speaking of trends, she has noticed that there is less demand now for loungewear and slippers (big sellers during Covid) and more demand for lipstick, a fun dress, and heels. Hallelujah!
Lastly, Baum asked what single piece of advice each panelist would offer to those interested in starting a brand or platform.
“Choose the right partner,” said Potkin, adding that her corporate background was the perfect complement to her partner’s ability to match a celebrity with a brand.
Carney strongly believes you should have a tech expert onboard. “Digitization is here to stay – make sure you get a great development technology partner that you can trust.”
Tolia advised not to vacillate: “You’ve just got to get started. The analysis creates paralysis. Start with the customer – focus on and understand what the problem is. To quote Thomas Edison “Vision without execution is hallucination.’”
Galante referenced her never-ending search for the new and novel. “I’m constantly meeting with new brands, always looking for the next new thing. I appreciate it when brands know what we already carry and have a unique product. Passion and openness are equally important.”
Moderator Baum’s advice to would-be retail entrepreneurs: “Never give up and have some level of funding.”