NEW YORK — Just making a sale isn’t enough these days for retailers. More important is having a strong brand, one that lures consumers back.
How successful companies accomplish this was a key point made during Financo’s Fourth Annual Special Industry Seminar on “Brand Building Strategies That Will Impact the Merchandising Sector in 2005,” which was here at The Harmonie Club Monday night.
The panelists included Kip Tindell, president and chief executive officer of The Container Store Inc.; Mackey J. McDonald, chairman and ceo, VF Corp.; Leonard Schlesinger, vice chairman and chief operating officer, Limited Brands Inc.; Burton M. Tansky, president and ceo, The Neiman Marcus Group Inc., and Lew Frankfort, chairman and ceo, Coach Inc. Gilbert W. Harrison, Financo’s chairman, moderated the panel.
For Tindell, getting talented people on the sales floor is essential to getting shoppers back and staying loyal to the brand. “Most retailers gave up on that concept years ago. It takes time and effort,” he acknowledged. However, while it is a challenge to get and keep good people, the “payoff is enormous,” he emphasized.
Another factor is finding the right locations for stores. The company held out for “26 years” before opening its store on Sixth Avenue between 17th and 18th Streets because it was willing to wait for the right location. Tindell calls the strategy “cooptition,” where “one equals three.” It is a strategy that zeroes in on the concept that one great location is better than three so-so sites.
For McDonald, success comes from energizing the company from within, and that means making sure that you have talented people working on staff.
As for building brands that grow, McDonald said the challenge is dealing with fragmentation from the consumer standpoint. “We call it ‘the army of one.’ Every consumer wants to wear something different,” he said.
VF invests in consumer research, which helps the “company grow by building leading brands that excite consumers around the world.”
He gave advice to attendees, many of whom were key executives from leading apparel and retail firms: “Keep it relevant, feed the pipeline, and fail small and fail fast.”
This story first appeared in the January 19, 2005 issue of WWD. Subscribe Today.
After that, “once you get the portfolio, create the demand. Nail the brand positioning. Offer a solution and build the emotional connection. Tell the story,” McDonald advised.
For Schlesinger, Limited Brands in recent years has undergone a transformation. He described the company as a former “shop and copy” business until the early Nineties when it took a hard look at what it needed to do to compete in the market.
“Limited considers itself an upscale consumer products company, not a vertical operator,” the vice chairman said. He added that the changes in its organization now include internal and outside design teams as well as making sure that the company “accesses the finest minds capable of bringing the product” concepts to life and onto the sales floors.
For Tansky, managing customer service is a key market strategy of the brand, whether it is Neiman Marcus or Bergdorf Goodman.
“We develop our associates as personal shoppers….We like to say that we don’t sell. We build friendships and we have great friends,” Tansky said.
He also pointed out that, because the two retail nameplates set the standard for service for affluent and aspirational customers for whom only the best will do, the company makes sure it opens stores in the right locations. “We won’t endanger the brand [by opening a store] in a marginal location,” the ceo said.
For Frankfort, success means keeping “innovation, relevance and value” at the forefront of everything Coach does, from marketing to determining what products to sell each season. Coach, which Frankfort said has no intention of buying a brand, grows by keeping itself focused on being an affordable luxury brand, with exceptionally well-made products at a value price.
A key element is conducting surveys that ask consumers such questions as “How are we doing?” and “When you are not buying Coach, what are you buying?”
As a rule, “we plan conservatively and we like to beat our plans,” Frankfort said.