Omnichannel rose to universal and critical significance during the coronavirus pandemic — and now, swift, seamless communication between retailers and shoppers has gone from “nice to have” to “need to have.”
And that’s why the stars aligned for Goorin Bros., a 125-year-old family-owned premium headwear company based in San Francisco, when it partnered with NewStore, an omnichannel solution for retailers, just before COVID-19 swept the nation and brands were suddenly forced to pivot.
“Everything changed from trying to fight to build a market to a market that largely wants what we have,” Stephan Schambach, founder and chief executive officer at NewStore, told WWD.
NewStore’s unique features include “omni-order management,” which enables consumers to buy from anywhere and ship from anywhere and incorporate fulfillment options such as buy online pickup in-store (BOPIS), as well as ship from store, the companies said. And it “allows for more efficient inventory management from a mobile point of service with endless aisle, mobile checkout and clienteling, resulting in higher transaction sizes across channels,” the firms noted.
Here, Schambach and Ben Goorin, ceo and fourth-generation hatter at Goorin Bros., discuss the company’s budding partnership, how brands have creatively met customers’ changing needs during the pandemic, and the enduring need for omnichannel approaches.
WWD: Goorin Bros. was founded in the 19th century. How has omnichannel helped Goorin Bros. adapt and meet the needs of the modern shopper?
Ben Goorin: This is a business that started by my great-grandfather in Pittsburgh in 1895. I’m the fourth generation to take over the business. I took over completely in 2005, when we had zero retail stores and we were just a wholesale company.
Since 2005, we opened our first store in San Francisco in North Beach, our second store on Melrose in Los Angeles and then opened about 20 to 30 stores within a very short time period of just a few years. We got up to about 39 stores, at one point, all over the country, with two in Canada, and we became a vertically integrated brand. We really drove our brand story through various channels: wholesale, retail and e-commerce. We were playing in the omnichannel world before omnichannel really became a buzzword. We were trying to figure out how we can operate as a relatively small team in a small company.
In a new world where every channel was important, we learned a lot of what not to do, and we struggled with how we could improve the business. We’ve tried many different platforms, but very recently we implemented NewStore as a way to help us be efficient and scale our business, which is primarily headwear. We have a very high touchpoint with our customers, so we were interested in a solution that could maintain a certain level of service, but at the same time create a convenient and easy shopping experience for our customers.
WWD: What were some of the challenges brands experienced throughout the pandemic? How did NewStore help Goorin Bros. meet those specific challenges?
Stephan Schambach: The way we experienced the pandemic was that when it started, many retailers had drastic reactions such as cost-cutting, furloughs and so forth. Then increasingly, larger brands continued coming to us for help with omnichannel because buy online, pickup in-store, curbside pickup or touchless payments, sadly, are now required to do business properly.
Initially, when we started, we used to work primarily with very innovative brands, such as Goorin Bros. — but now omnichannel is becoming more mainstream and the larger brands can no longer fend it off as something they’ll get to when the IT team is ready. So omnichannel is an essential tool for survival because it allows access to inventory when the doors are closed, for example, or it enables store associates to sell even though they’re not in the store from iPhones, other devices, etc.
Due to the pandemic, everything changed from trying to fight to build a market to a market that largely wants what we have.
B.G.: First of all, we launched NewStore at exactly the time that our stores had to close. We had stay-at-home orders first here in San Francisco, and then it sort of followed in many other cities. We were right at the cusp of rolling this out in our stores, as many of our stores came off-line, so it wasn’t really a typically planned launch. To this day, a lot of our stores are still closed. Our business is completely different now compared to how we would be functioning normally.
That being said, we’ve had to adapt to a point where fulfilling web orders, for instance, for goods that were in stores and no longer at the warehouse, became extremely important. Our e-commerce business to this day has kept us alive, but it would be greatly restricted if we didn’t have access to our stores’ inventory.
Even though our doors might not be open — or if they are only open two, three days a week with very little foot traffic — they’re actually fulfilling orders. Employees in the store are actually communicating with customers over the phone or over chat or text. The experience has completely changed.
NewStore has offered that sort of lifeline for this period, although most of the functionality and most of what we would realize with NewStore, we haven’t been able to realize because we’re not fully functional right now.
WWD: How would you say that NewStore’s overall omnichannel experience is differentiated in the market?
S.S: Well, first of all, some very large companies such as Nike, for example, or Apple for that matter, have provided really good omnichannel experiences for their customers — but they can do that because they are able to employ thousands of IT people and hire external firms to cobble it together, either by building that software themselves or by putting together systems through system integration.
Ninety-five percent of the market doesn’t have those budgets, doesn’t have the talent and doesn’t have the patience to do that. For all of them, we have a cloud-based omnichannel solution that makes it so much easier to be really good at omnichannel after just two or three months of implementing it. That’s the differentiation, really. It’s not that omnichannel hasn’t been possible before. We make it very, very affordable and we do it really, really well for every brand whose core business is something else other than software.
WWD: Are there any changes you’ve noticed with brands that approached NewStore during the coronavirus pandemic? Are there any trends or patterns that stood out over the past few months?
S.S.: What’s fairly typical is that a curbside pickup or buy online, pick up in-store is the trigger. Often everybody wants that. What most brands overlook is that for omnichannel to work properly, you also have to have precise store inventory, you need routing logic, you need a whole bunch of complicated things that, if you have them, from that point to full omnichannel is not very far. An interesting trend is there’s often “fix my buy online pick up in-store,” and then with that comes the learning process. It’s not that simple, but if you make the investment as a brand, you’re enabling a whole bunch of other use cases. So, that was interesting.
Then another tidbit that I find personally very satisfying is that from the outset we innovate around checkout methods that don’t require a terminal and that are cashless. Think of it as “e-commerce style”: Checkout with PayPal, Apple Pay, Google Pay or Amazon between the phones of the store associate and the customer. We have had some success with it, but with COVID-19, that suddenly became a major discussion point.
Touchless payments not only literally eliminate any form of handling of plastic between the store associates and the customer (or typing a pin code), but also transmit the necessary data such as shipping address, billing address and so forth. If you have an order that includes items from another store, or from the web site, there’s no typing and no touching. That suddenly is becoming very popular very quickly in stores.
So this has trained consumers, by the hundreds of millions, how to use QR codes — and they have obviously at least one electronic payment method on their phone. I think the pandemic has accelerated this trend from a sort of legacy forms of payment (and for legacy, I would include credit cards with a terminal in the store, and not just cash), toward completely electronic, touch-free e-commerce style payments, which can be in front of an associate or an instance where a payment link is sent over through chat. The fact that this became super popular now is surprising and very satisfying for us.
WWD: As you look ahead into 2020 and beyond, what changes do you anticipate seeing in retail? Do you have any insights as to what consumers’ new priorities might be and how businesses might continue to evolve to survive throughout this pandemic?
B.G.: Well, I know that the footprint of the stores is shrinking. The stores are still important, but the amount of space that you need in a store for inventory, for instance, is no longer critical. I think the relevance of a store is to have more of a personalized experience where you can concentrate that experience toward the front of the store. Having digital menus for people to be able to browse through your product offering is a much more efficient way than having people rummage through shelves and try to find what they’re looking for and dig through sizes, and things like that. Surfacing what the consumer is looking for in a more efficient, streamlined way, using both digital and physical (in terms of catalogue, the way you might browse online) and having product sort of brought to the customer.
Once you know generally what a customer is interested in, physically bringing product to the customer helps to limit their choices, and now they’re just focused on maybe trying it on or looking at the color variations. That’s a major shift in using both digital and physical worlds. It sort of collides together as one experience.
Most customers have done their research before coming into a shop. They’ve seen some content on social media or have some knowledge before walking into a store, whether through email or something they read in the media through PR. The more you can anticipate what brought a customer in by starting their journey before they step foot in the store, the better; so they can signal to you, “Hey, I’m interested in this. I want to review this product before I get there.” They don’t have to sit and wait and hope somebody waits on them, and hope that it’s in stock. It’s teed up for them ahead of time. I think that’s going to continue to be a big shift. People aren’t going to want to wait in line anymore. Their time is limited, and efficiency needs to be built into the experience.
S.S.: On a macro-level, what’s happening here is that vertically integrated brands can no longer rely on wholesale. They really have to get better in direct-to-consumer. This mix of online, and some stores that have less inventory but can make it super easy to sell inventory that’s not in that particular store, is a really good combination, I think.
There’s a duopoly between Facebook and Google that continues to drive up the prices for clicks and adverts, especially now that e-commerce is even more popular than before. For a brand to have to rely exclusively on a new customer acquisition online is very, very complicated and super expensive.
Stores can play a pivotal role in acquiring new customers and providing a great brand experience. Also, I think the leases will come down so this part of the cost for store will definitely improve. I think, at least for brands, we’ll see them investing in smaller format stores as a vehicle for brand expression and new customer acquisition.
WWD: For retailers aiming to keep up with these constant changes and challenges that are taking place, what advice would you offer them?
S.S.: On the one hand, I think those that are going in bankruptcy right now had trouble six months before COVID-19 for sure, or a year. I think a healthy brand, especially a vertically integrated brand, can certainly not only survive, but also come out of the other end and thrive. We have seen some businesses go south that definitely had issues before. Either they were set up with private equity investors who basically choked them, or they had issues with their inventory or their strategy.
There was something there before that didn’t work. I think now is a really good time to change strategy and also replace and modernize systems. I’d say the time is now to take omnichannel seriously — this is what we’re seeing from the market coming to us and technologies that enable omnichannel. Now is the time to do it.
In my mind, you will have Amazon and some curated marketplaces; that have been happening for many years, replacing the department store model. And then you have vertically integrated brands that really need to control the customer experience. They can’t go to Amazon without having expensive hats shown next to toilet paper, right? So, it’s killing the brand and it’s taking a lot of the margin away.
So that’s the dynamic that we’re in, and business models that are resale models will go away. This has been true for hundreds and hundreds of years. It’s called disintermediation, and it’s happening everywhere where it’s possible to cut out the middleman. The only other segment that has challenges are brands that are very young and new and depend a lot on external funding.
B.G.: Just that the customer is still there. I think that’s what’s really important here. Just because the streets might be empty, the foot traffic has been steadily going down — we’ve seen it going down over the last couple years, and that doesn’t mean business has to go down. The customer still exists; they’re just not physically roaming, walking up and down boulevards and window shopping. That will return in pockets, but there are so many places in this country and so many neighborhoods that it is just not going to be conducive for people to physically walk. We’ve seen that. We’ve seen that happen a lot in L.A. People don’t walk in L.A. They just drive up to exactly what they want and then they drive to their next location two blocks away. The idea of walking around and shopping has been disappearing for quite a while.
The point is that you need to be flexible. You need to be where your customer is and your customer is on their device. Your customer is able to interact with your culture, with your brand and with your product in so many more ways than just walking into a store.
And even if you have that physical store, there has to be a reason for them to show up. They’re going to find out about that reason through some other touchpoints. It’s extremely important that people connect the dots here, and find a way to reimagine where their business sits. Retailers’ business sits around the customer. The customer is at the center, and you have to find all of those touchpoints and experiences that your brand is building around the customer. Once you do that, then you can seek the right technology to build the infrastructure. Brands must first imagine what experiences they want to create before they even can execute the technology.
I think it’s a mind-set that has to shift. People have to be creative in how they’re connecting with customers first and that mind-set is the first thing that needs to shift — before innovation can carry them forward.
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