There’s a culture shift occurring at Barneys New York.
For a retailer steeped in luxury, designer firsts and sophisticated store decor, Barneys is getting “data-driven” and, in a clear sign of a serious technology play, has hired its first chief information officer, Martin Gilliard, WWD has learned.
Gilliard starts his new job on April 3 and takes on a broad role overseeing all technological aspects of the retailer, including the digital, e-commerce and information technology teams. He will report to Daniella Vitale, president and chief executive officer.
“This is a unique, absolutely critical, completely new role,” Vitale said.
During an exclusive interview, the ceo discussed Barneys’ technology push and its path to potentially greater e-commerce revenues, mining data to better learn about and connect with customers, and ramping up service efforts.
“What is going to keep us successful is how we become more data-driven without alienating the DNA of the brand,” she said.
In terms of technology, Gilliard will be in charge of “the entire ecosystem of Barneys, instead of a more segmented approach,” Vitale said. “We are looking at it in a much more progressive way than we have in the past. We don’t want to operate in silos anymore.”
Josh Lieberman continues as executive vice president of digital, reporting to Gilliard.
It’s an understatement to say that Barneys is a Johnny-come-lately to e-commerce, having launched in 2007, about a decade after Macy’s Inc. did. But it’s not an overstatement to say the team is gung-ho on its dot-com potential, seeing opportunities for international shipping, faster deliveries, including expanding the one-day delivery service, enhancing personalization and connections with customers, reducing the friction of the online shopping experience, and bolstering the assortment with important luxury labels such as Chanel and Céline that have yet to appear on barneys.com although they are sold in Barneys’ stores.
The retailer generates roughly $175 million in annual revenues online, or up to 25 percent of its total business. However, it’s been growing at “high double digits,” according to Vitale. Asked how much of the Barneys business could ultimately be conducted online, Vitale responded, “We have a long way to go. We are not doing anything by way of international. It’s a very small percentage, smaller than our competitors. We haven’t scratched the surface there.”
She added that “personalization is something we have invested in over the last couple of years. It’s been a part of our strategy.” However, “the customer is much, much more demanding at this point. We do need to show the customer that we know who they are, what they want, and what they shop for at our stores.…You can collect all this data and do nothing with it.” But Barneys, working with Gilliard, will seek to better utilize the data so “people feel a stronger connection with us as a company,” Vitale said.”There is way too much retail out there,” meaning the retailer has to work harder to differentiate and draw shoppers.
“Ultimately, it is going to be about how do we service our existing, good customers in more efficient, dynamic ways, and when we do acquire new customers, how do we get them to keep coming back, to be lifelong customers.” It’s about looking at the online, mobile and physical store sides of Barneys and as Vitale said, “How it all works together.”
As Barneys generates greater online sales, its stores, which like other retailers have been affected by slower traffic trends and lower spending by international tourists, will represent a shrinking percentage of sales.
One Barneys store in particular, the Madison Avenue flagship, has an uncertain future. The company is in rent talks with the landlord of the building, and faces the prospect of a precipitous rent increase, which would affect its profitability. There are rumblings that Barneys is considering vacating the site and taking a smaller one on Madison Avenue, or downsizing the existing flagship by consolidating the men’s side into the women’s side of the store.
“Our intention is stay there,” Vitale told WWD. “We have the right to stay there for 40-plus years. Without Barneys, you change the face of Madison Avenue, which is in no one’s benefit. Our intention is be on Madison Avenue. There are so many open locations on Madison Avenue that if someone really wants to be on Madison, they can. But I see all this resolving.”
Barneys Beverly Hills flagship is also subject to rent increases through the same landlord. Barneys’ other flagships are in Chelsea in Manhattan, Chicago, Seattle, Boston, San Francisco and Las Vegas. The company has 16 other stores and outlets in the U.S.
Vitale said Gilliard has an understanding of the Barneys stores and she was impressed that prior to his appointment, he spent time in them. “He completely understood who we are as a company and how important this integration of all this information and data is.”
Vitale said personalization on barneys.com has to go further, utilizing more detailed information on people’s browsing and shopping behaviors — what stores, what departments, even a visit to Freds restaurant — to customize the experience. “We need to get beyond just product recommendations.…Even the editorial content has to be personalized,” though Vitale said editorial has been “a big driver” of shopping.
“The first thing you interact with at Barneys should be something relevant to you. It can’t be always about product,” she said. “There does need to be that social entertainment aspect. It’s also how content is a big part of that — making that as personalized as that can be, making sure e-mails are personalized. We will [create] a more robust personal shopping experience. It will be based on spending levels of our consumers, starting with a consumer who is spending much more. We have never really done that online.”
Vitale said with the opening of the Barneys in Chelsea in February 2016, the store launched an app downtown providing sales associates with purchase histories. It’s a tool to personalize the service and provide informed product recommendations. “It’s almost like a personal shopping app,” Vitale said. The idea is to carry it over to the website experience.
When she joined Barneys in 2010, Barneys had e-commerce, though there was little investment. “There was not enough talent. Nothing by way of technology. No leadership. It really absolutely needed to be a complete turned around and in a very, very competitive landscape.” It wasn’t until 2007 that Barneys launched e-commerce, with some personalization implemented in 2011.
“It has been a fantastic trajectory in terms of growth and not dilutive at all to the brand. Barneys was also so good at the storytelling aspect and the creative and we weren’t using any of that” online.
Asked if a different approach to e-commerce is required for the luxury shopper, Vitale replied: “It just needs to be a rich experience for all of our consumers, and also an efficient and easy one, with fast shipping, fast checkout. That is so important to the luxury consumer, and very important to an Amazon consumer.” With a luxury site, “You have to make sure it looks beautiful and has great storytelling.”
This year, she said Barneys will roll out BOPIS, which stands for buy-online, pick-up-in-store. Same-day delivery was launched about 18 months ago. “We are really trying to emphasize that and expand zip codes where we could deliver the same day and provide better service to West Coast consumers.”
Vitale also said, “Certain big brands are not online. My hope is as people see how we are servicing the client, we will be getting some of those bigger brands online with us. Everyone has their point of view and we would be very good partners in that regard,” presenting important brands not currently sold on barneys.com in “a proper way and a way they would feel comfortable.”
Those who shop both Barneys online and the stores are the best customers, Vitale said. “They shop four times as much as our online-only customers, six times more than those only shopping in physical stores and they have the highest retention. They come back every year, and they spend twice as much as online-only customers spend.”
The hiring of Gilliard rounds out the new senior team formed by Vitale, who succeeded Mark Lee as ceo in February. Recently, she hired Sandro Risi as chief financial officer, Tony Mauro was promoted to chief operating officer, Jennifer Sunwoo was promoted to chief merchandising officer, Matthew Mazzucca was hired as creative director and Tomm Miller was hired as senior vice president of marketing and communications.
In a statement, Vitale said, “technology will play a huge roll in the future growth plans and it’s imperative that we have a strong leader to oversee the entire technology ecosystem at Barneys. It was crucial to me to have someone who possesses not only a technology and development background, but also P+L experience. Martin understands the importance of how we’ve become a more data-driven company without sacrificing who we are as a brand. His entrepreneurial experience along with his ability to think creatively makes him the perfect cultural fit for us.”
Gilliard, who has more than 17 years’ experience, was previously global head of MarTech and data partnerships at Facebook, where he focused on integrating technology and data for omnichannel brands. Earlier, he was general manager of AdTruth at Experian Marketing Services. He was also cofounder and ceo of Datamyze Inc., and worked at Microsoft, WPP, Yesmail and American International Group.