Julie RiceWWD Apparel and Retail CEO Summit, New York, USA - 31 Oct 2018

Julie Rice, partner in WeWork, cofounder of SoulCycle and an admitted “huge fan of everything retail and massive consumer,” has a different take on what innovation means.

“We spend so much time as business leaders talking about innovation. What does it mean to us? Some people might say it’s about setting the trends, being first, creating the next big thing. There are a million different definitions, and to be honest with you, the word is overused and it can mean anything,” Rice said during her presentation.

“Eight years ago innovation was social. Five years ago innovation was content. Three years ago innovation was data and ironically, each of these things is just about knowing and communicating with our customers.

“Here’s what I believe. We are so focused on tomorrow that we overlook the simplest thing of all — our customers, and in all of my years of working with people of all ages and backgrounds and experiences, there is one thing that everyone I have met has in common — people just want to be seen, heard, understood and appreciated. People want to feel like they matter. Customers are human beings. It’s that simple.

“With all of us spending hours on our phones and computers and not even looking up, the real innovation is training our employees to make human contact. A personal touch. Truly knowing and hearing someone. Real personal human connection is actually the innovation of today.”

Rice said she loves pop-up shops, collaborations, new apps and concept stores. “If you guys build it, I will come and find it. I will definitely get on a plane and check it out. My friends will tell you that I am the one outside, shopping Saturdays texting them photos of everything I think belongs in their closets.

“While I am always checking out things, I make very few purchases on very few sites and stores. Rest assured, I shop heartily and I shop often. But the sites I shop make me feel like I matter” by making it possible to easily exchange things, respond quickly to e-mails, deliver with urgency and have packages so beautifully wrapped it’s like a present to herself, Rice said.

It’s the same way with the brick-and-mortar shops she frequents. “They know my name. They offer my kids a seat. They insist on delivering my packages to my house so I don’t have to drag them around the city the whole day. It makes me want to spend my money.”

In 2006, when Rice and her partner Elizabeth Cutler opened their first SoulCycle studio on the west side of Manhattan, “We understood people coming to SoulCycle would be a matter of choice. At the time, it was a world of memberships and big-box gyms and there was no such thing as boutique fitness. So if we could actually convince you to pay $27 for a class, find our studio which was located with no signage in the rear lobby of a building, and clip into a bike in a dark room, we were going to love you so much that you had no choice to come back. We basically leapt over the front desk to show our gratitude. We did everything to make sure people knew that they mattered,” from hugging riders at the front door to remembering birthdays, celebrating hundred-mile-ride milestones, and keeping quarters in the desk to feed parking meters so riders wouldn’t have to interrupt their workouts.

“Our pay-per-class model meant that every time a rider walked in the door, it was a choice, and that forced us to deliver an unforgettable experience both in class and out,” said Rice. “We were no longer in the sales business. Now we were in the making-humans-feel-good business. And that’s how we need to frame our thinking today.”

From the get-go, the founders (which included Ruth Zukerman) wanted the same thing, that the studio should be more than just a bunch of stationary bikes in a dark room and that it should really be a place for people to connect.

They worked at making connections, and Rice learned a lot about SoulCycle riders at the front desk where she made an effort to learn something new about each rider each time they came for a workout.

“One day a rider walked in and when I handed her a bottle of cold water she actually said to me, ‘I prefer room temperature if that is OK.’ So I handed her a warm bottle. Two days later the same rider returned. I handed her a bottle of water and I said, room temperature, right? She was on the floor. It was like I bought her a new car.

“The strategy worked and many of those riders are still with us today, 13 years later. Looking back, it was our lack of marketing dollars that was the best thing that could have happened to us,” Rice recalled. “It forced us to be creative and disciplined knowing we had to fight for each rider.

“Organically, what we ended up with was not customers but evangelists. We created evangelists and they built our business for us.” There are more than 90 SoulCycle studios and more than 30,000 riders daily.

At WeWork, Rice said each touch point in the buildings is carefully designed “to insure a happy and collaborative experience, from the design of our lobbies to a welcoming front desk, to where the staff knows your needs to kick off your WeWork experience.…Our buildings spark conversations between members from different companies, at the coffee urns, at the printer stations and between the offices themselves.

“Someone might walk into a WeWork office, sign up for a tour, and love our fruit water. But here’s the catch. It’s the way they feel and the connection with our employees and members that will ultimately keep them there. Our goal at WeWork is to help people make a life, not just a living. To deliver a remarkable experience, one member at a time, one day at a time, we want to create an environment that is so inspiring and so inclusive that people go home and talk about the way we treated them. We are inviting people to join a movement to feel something. We are on a mission to change the way people live and work and if we deliver on that, we can change people’s relationships with other people.”

During her talk, Rice highlighted her lessons learned as an entrepreneur, including the importance of knowing your customer, that customer service matters more than ever, and to think “grassroots” to develop a community of loyal customers.

Instead of spending thousands of dollars on market research and focus groups, “I always say, if you gave me $50 to take five customers from different markets to coffee, I will come back with the most invaluable insight that you never heard,” Rice said.

At the SoulCycle business grew, “We knew we couldn’t reach every SoulCycle customer, so we invested in training and employee development. We developed an intensive on-boarding program for all of our employees. Every one of our c-level executives were required to work their first three weeks at the front desks at our studios. There is just no better way to learn your own business than being a part of it. Training is everything and I mean more than ‘here is the employee handbook.'”

The team should be “on the ground interacting with customers,” Rice said. “I know it’s an investment, not just in money but more so in our time. But it’s one of the best investments we can all make.”

“SoulCycle has always been about community. We are not trying to sell you anything. Our goal is to deliver human experience that you love so much that you just have to tell your friends. People matter. Everyone just wants to be heard, understood and appreciated. And I am not just talking about customers. It could be your clients, your colleagues, your bosses, your direct reports, your vendors, your lovers and your kids. But most of us have a hard time listening, let alone understanding or appreciating.”

At WeWork, many members are smaller companies “with dreams and passions and in many cases, gaining scale and distribution is a real challenge,” Rice said.

In September, the company launched WeMrkt, a curated corner store in WeWork buildings stocked with healthy snacks, tech products and office supplies. “We carry and stock the shelves with products made by our members. It’s our ‘by the people and for the people’ convenience store and we will have 200 locations globally in the next year. In essence, WeMrkt is a space to showcase member-made products. Members pitch their products on pitch nights,” to try to get their products sold in WeMrkt stores. “This is an entirely new channel of distribution and awareness for our members. And guess what? Our members feel appreciated. They feel seen. They feel heard, and they feel like WeWork has invested in their future.”

In another move into retail, Rent the Runway last month installed drop-off boxes for returning rented clothes at 15 WeWork locations in six cities. In addition, pop-up versions of Rent the Runway’s “dream closet” stores will open soon at the same locations where the drop-off boxes are placed. The pop-ups will range from 1,000 to 3,000 square feet and are situated in the common areas of the WeWork facilities, including the 18th Street headquarters in Manhattan and in the DUMBO section of Brooklyn, N.Y.

“You can create an entire retail community around one building. We are going to being to dabble in that,” Rice said, in an effort to respond to what members want.

Meanwhile, WeWork continues its dizzying pace of expansion, opening 35 buildings a month around the world. WeWork facilities are in 71 cities and 23 countries. “Our buildings are filling up as fast as we are opening them,” Rice said. “It’s the way that people want to live today, collaborate and be part of communities.”

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