Though Barneys has been aggressively building its online business, the luxury retailer is not about to neglect its brick-and-mortar operations.
“Over 60 percent of Millennials shop the physical store,” Daniella Vitale, chief executive officer of Barneys New York, said Tuesday at Fast Company’s “Innovation Festival” at the 92nd Street Y in Manhattan.
Vitale’s main message was that Barneys’ brick-and-mortar is innovating with immersive experiences such as The Drop, held last June at the Beverly Hills store and last fall at the Madison Avenue flagship in New York.
Vitale shared the Fast Company stage with Russell Wallach, president of Live Nation Media and Sponsorship. They addressed such subjects as wooing younger customers, partnerships and the need to offer engaging experiences, with Mark Wilson, a senior editor at Fast Company, moderating the discussion.
“The Drop will evolve into something else next year,” Vitale said, while avoiding to specify what’s in store. At the Beverly Hills store, it was a weekend of designer appearances, exclusive capsule collections, installations, panel discussions and a surprise performance by Wu-Tang Clan presented by Live Nation.
“It’s completely not true” that younger shoppers have been abandoning stores in favor of shopping online, Vitale stated, though she acknowledged more must be done to attract younger customers, though not at the expense of older shoppers. “The older customer is just as important as the younger customer,” Vitale said.
Barneys, she suggested, is working to transform the store experience. “Barneys is not just a store. It’s a venue for creativity” as well as a stage for consumers to share experiences that can’t be replicated online, she noted, citing the Fila “pizza kitchen” set up inside Barneys for The Drop. “You cannot do The Drop online.”
In developing The Drop concept, Vitale said, “We were willing to forfeit profitability and sales to create the experience.” Barneys was well aware that sometimes store events don’t get any return on investment. That was the case for many stores during Fashion’s Night Out, which years ago got stores throwing parties, inviting celebrities and providing free drinks to get shoppers back into the shopping mood, following The Great Recession that began in 2008. After a few years, it was determined that the event just wasn’t worth the time and money spent by retailers and the concept was dropped.
But with The Drop, Vitale said the store did see a return on the investment. “We made money,” she said. “We got a lot of support from brands and sponsors. We want to do more of this. The Drop goes beyond merchandise.” Though lots of brands and designers want to work with Barneys, finding “good partners,” including those willing to look outside the traditional retail model, she suggested, isn’t all that easy. Vitale did say, however, that next spring, Barneys is collaborating with Burberry on an exclusive program.
Moreover, 20 percent of the turnout never interacted with Barneys before. “We made them feel welcome,” Vitale said.
“Brands need to invest in new ideas,” said Wallach of Live Nation, which stages concerts and festivals and partners with brands to bring additional dimensions to the experiences. “Brands need to invest in culture. Not everything is going to work right away, but we have to encourage that kind of investment.”
According to Wallach, of those Millennials attending concerts and festivals, “over 70 percent will actually buy an outfit prior to a concert or festival…Partnerships really help to bring it to life.” Festivals, he maintained, “are one of the best places for a brand to play. You’ve got a captive audience,” over the course of a few days.