Elton Graham, vice president of e-commerce at Kellwood Co., offered advice to brands trying to make it in the digital space.
This story first appeared in the June 19, 2013 issue of WWD. Subscribe Today.
With more than 15 years of experience in the digital and e-commerce arena, Graham previously headed e-commerce for apparel start-up Nasty Gal, helping it achieve online sales in 2012 of more than $100 million. Earlier he held e-commerce roles at James Perse, Shopzilla and Wet Seal.
Graham took the opportunity to address several myths about e-commerce. First of all, he said it’s not true that only the young are online, that it’s for early adopters and nerds, and that you need to try on an item before you buy it. It’s also not true that people won’t buy high-ticket items such as cars, homes and luxury jewelry online.
Every age group is now online, high-ticket items are selling well, and look at how Zappos built a $1 billion footwear business, selling shoes without trying them on first, he said. “Once you start to shop online, you can’t break the habit,” said Graham, who bought a car online in 1997 and has continued to buy everything he needs online ever since.
Graham said one misstep in his career was passing up the opportunity to work at Amazon. “It was probably a big mistake. Looking in hindsight, it did give me a gift. I’ve been watching Amazon extremely closely,” he said. If you talk to the highest-level chief executives in corporate America, there’s one company they’re all fearful of and that’s Amazon, said Graham. “They’re not just a pioneer in the space, they’re an inventor. That’s the one piece of advice I’d give the whole audience here. You should watch Amazon daily and understand how they’re changing the business and how they’re changing expectations of consumers a lot,” he said.
Graham said if you’re a brand considering going online, it’s important to separate all the hype from the reality. You need to figure out what does social media mean, what does omnichannel mean and what does mobile mean to your brand’s DNA.
The biggest rock out there, and the one everyone wants to climb, is apparel. In 2011, online apparel sales in the U.S. were $34 billion. They grew to $41 billion last year, and according to eMarketer, are forecast to grow to $73 billion by 2016, accounting for close to 20 percent of all e-commerce transactions in the U.S.
But if a brand wants to sell direct, it is going to have to compete for a piece of its e-commerce business with department and specialty stores’ Web sites and pure plays, which are hungry for brands. He pointed to Tory Burch, which did $760 million in sales last year. He noted that it has a strong Web site, international sites and mobile apps but only has sales of $113 million online. “This is a problem. If you’re only getting 15 percent of your revenues based on e-commerce, you won’t have the funds to invest in e-commerce. Expect your [e-commerce] business if you’re an apparel brand to flatten out at 15 percent,” he said.