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Social media is a key area for retailers to have a presence — the good news is they don’t have to spend a lot for that.
That was one conclusion from a panel of experts who spoke on “Improving Profitability in the Retail Community” on Wednesday evening at the Cornell Club. The program was hosted by Geller & Co. and moderated by WWD news director Lisa Lockwood. Panel participants were Holly Felder Etlin, managing partner at Alix Partners; Robert V. Grecco, corporate vice president and corporate controller at Ralph Lauren Corp.; Maggy Siegel, president and chief operating officer at Dylan’s Candy Bar, and Christopher Vignone, state and local tax director for the tax advisory services of financial service firm Geller & Co. Chris Clabby, managing director of Geller Tax Advisory Services opened the evening’s presentation.
According to Siegel, no one can really talk about numbers because social media can’t yet be monetized. Her advice was: “Don’t have a summer intern doing your social media.” As for costs, Siegel said her budget involves a reallocation of expenses that includes an amount for social media.
Ralph Lauren’s Greco essentially said the same thing regarding costs. “Our investment is coming out of our advertising budget. It’s a modest sum. Social media gives us the ability to track traffic, what sales were made on ralphlauren.com, and see who came to the site from Facebook and Twitter.”
Grecco said traffic from the social media sites is currently an “insignificant source of revenue at this time,” but noted that it’s still something everyone needs to be involved in.
Etlin reminded attendees of how brick-and-mortar retailers once thought people would not buy fashion online due to fit issues. Fast forward 10 years and the landscape is vastly different. In the same vein, she predicted: “Social media looks like there’s no return on investment now, but that will come to those who use it.”
Other topics included real estate in the Big Apple and whether companies really need to be in New York. According to Vignone, “New York City is a challenge. Companies want to be here, or at least have some part of the company here,” noting that many firms have the financial operations or other back-office division elsewhere. Still, due to incentives available from the Bloomberg administration, many firms are taking advantage of what the city has to offer.
Etlin believes that creative, fashion-forward firms will want to be in New York due to the amount of talent that is available, noting that “you can almost get away with paying less for the creative talent than what you will pay someone for a back-office [position] in New Jersey.”
Finally, Vignone noted that “cost recovery” is the current buzz word in retail, with firms eyeing where they can cut costs. Grecco said his firm is focusing on shared services where possible. He pointed to how “no expense is spared” on the creative side when Ralph Lauren opens a flagship , but then needs to be vigilant on the commercial side to be as lean as can be to compensate for the creative costs.
One topic that remained a question mark was whether J.C. Penney Co. Inc.’s chief executive officer Ron Johnson can effect the radical changes that he feels are needed to rev up the mass chain’s tired image.
Siegel said Penney’s was her company’s largest account in the last holiday season, but noted that her firm emphasized the retailer couldn’t “mark us down” as a key component of the negotiations between the two. “I want to see [the J.C. Penney plan] work,” she said, noting that generally ceo’s need to plan conservatively and need to wear a “bulletproof vest because it will get ugly out there.”
Etlin queried whether the chain was the equivalent of a “dead man walking,” noting that while she would love to see Johnson succeed, she also had some doubts due to aging real estate assets. She noted how when Macy’s acquired May Department Stores, some promotions were taken away but were met with such backlash from consumers that some had to be put back in place.