BOSTON — Twelve million Facebook fans, but the Marc Jacobs brand won’t spend a dollar to market to them.
“Given our customer base, Facebook is not where we’re going,” said Sarah Choi, senior vice president and general manager of global and digital creative services for Marc Jacob International, noting that 80 percent of the brand’s customers are age 18 to 34. “Snapchat is where we want to go.”
Choi gave the opening keynote last week for Harvard Business School’s 12th annual Retail and Luxury Goods Conference. Jun-Sheng Li, senior vice president for Wal-Mart Global e-commerce supply chain, gave the closing keynote, titled “Reinventing Wal-Mart.”
Although representing vastly different brands, both Choi and Li spent a lot of time talking about how connectivity is driving reinvention. Technology matters not for its bells-and-whistles but for its ability to enable communication, provide better service and amplify distinctive aspects of culture, they said. In some cases, it can even maximize the productivity of physical spaces.
Wal-Mart, which has been struggling in recent quarters with flat comparable stores sales, is reimagining its stores as service “nodes” that support and fulfill online orders, Li said. (The retailer is a distant second behind Amazon in e-commerce traffic and sales, according to comScore data.) For instance, in the “node” model, Wal-Mart’s stores might be retrofitted with drive-through, pick-up areas, or be the departure point for home delivery couriers.
Li cited the company’s widespread adoption of store-to-home delivery in the U.K. and China as a model. “In China, nobody likes to carry things out of the store, they all want things delivered,” he said. He said Americans are less fond of having goods left on their doorsteps and envisioned Wal-Mart using a local gathering point — a gas station near a neighborhood, for example — to distribute same-day orders. In theory, someone could place an order at the office and swing by a neighborhood pick-up spot on the way home to collect their stuff.
“We want to erase all notion of channel — so all you know is you got something yesterday from us, but you don’t really remember whether you shopped, picked it up at the store or had it delivered to you,” he said.
Projecting out what Wal-Mart has seen in other markets, Li speculated that by 2026, up to half of retail product could be delivered to homes or convenient pick-up spots. But he laughed when asked if drones — a la Amazon — would be in the mix. “A great p.r. stunt,” he said, adding that Wal-Mart would be more likely to use them within its warehouse to monitor operations.
Connectivity was the buzz of the conference, as was social media.
“It’s creepy but true that some of the closest relationships I have right now, I met on Instagram,” confessed designer Marissa Webb, who was the featured speaker during a cocktail reception. The designer, who late last year exited as creative director of Banana Republic to focus on her own line, opened her first Marissa Webb boutique in New York’s SoHo in January. She remains a consultant to Banana Republic, reviewing the designs, visuals and advertisements. The brand is on a campaign to “introduce itself back to customers who were not aware of or may have forgotten about it,” she said.
In her keynote, Marc Jacobs’ Choi outlined her career path, advising students to be bold in their ambitions and cautious with their personal finances. As reported, the company has stopped using the “Marc by Marc Jacobs” moniker and is branding its whole offering — runway pieces to purse charms — as Marc Jacobs. The customers were “confused” before with two labels, Choi said. Now, it’s “one store design, one runway, one global ad campaign.” The majority of the offering will be at “democratic price points,” Choi said. (Bags start at $300.) Clothing may set a general design direction, but bags, beauty and accessories will drive sales. Currently, “40 percent of our business is bags,” Choi said.
The company is testing a new store format in Lebanon and Taiwan and plans to begin remodeling and refitting U.S. stores next year, including Mercer Street in New York. Choi said she was not familiar with specifics of the new store design.
She said 70 percent of the Marc Jacobs customer base is international. Marc Jacob beauty, which launched at Harrods and will expand to Bergdorf Goodman, Neiman Marcus and others, is on track to hit “triple-digit millions” in sales by the end of 2016, according to Choi. The company is heavily promoting the Sephora launch of Velvet Noir mascara, with an ad campaign featuring Winona Ryder.
A veteran of Levi’s and Sephora, where she launched the brand’s loyalty programs, Choi talked about how Marc Jacobs International will be “social first.” That means new ads will debut on Instagram, on the designer’s personal feed, before print magazines. She emphasized all that can be done with a limited digital budget — whether it’s pushing people to @NevilleJacobs, the designer’s dog’s Instagram (187,000 followers); having the brand’s longtime doorman take over the corporate Instagram for New York Fashion Week, or creating a YouTube video series, #MJafterhours, featuring Marc Jacobs employees on their personal time — getting tattoos, playing in bands, etc.
“We want to excite her about the world and the community of Marc Jacobs,” Choi said.
Building an e-mail database is a priority; currently, only 3 percent of sales come in response to e-mails. The company also is investing in affiliate marketing and paid search, but not on Facebook.
Thibaut Munier, chief operating officer and cofounder of digital consultancy Numberly, whose clients include P&G, Chanel and Sephora, said he wasn’t surprised by Marc Jacobs’ strategy. Facebook is “expensive,” he noted, and, unlike Google, doesn’t provide much data back.
And data is competitive power. Jessica Schinazi, senior manager, marketing services and business development for Richemont North America, said the company recently mapped FedEx delivery receipts. It discovered “interesting clusters” of very good customers, including a group of students coming from China to study at a Midwestern university.
“It was a little market we found that was under our radar,” she noted. “So we’ve developed specific messages, including during the Chinese New Year.”
Wal-Mart closely measures three customer data points for each of its U.S. store — how fast, friendly and clean (specifically, bathrooms), the store is perceived to be — because comp performance rises when these scores do. Paul Hatch, senior marketing director for the Bentonville, Ark., company, said customers are willing to provide a lot of personal data when there’s a clear payoff attached. For instance, American Wal-Mart customers can scan their receipts with their mobile phones after purchase. If an item they bought is available anywhere else for less, Wal-Mart sends an e-gift card for the difference.
In a panel entitled, “The Future of Tradition,” panelists weighed in on companies they study for insight. Mercedes Abramo, president and chief executive officer of Cartier North America, cited Burberry for the way its digital presence reinforces its brand promise. Scott Cameron, chief strategy officer for Canadian outerwear firm Canada Goose, cited Apple for “maintaining simplicity, and avoiding product proliferation. I think it’s a good example for the fashion world where it’s easy to get caught up in churning out style after style.”
Michelle Giguere, director of buying for Tory Burch, said they’ve been studying user-generated content on Rent the Runway, where customers upload photos of themselves wearing the garments, provide detailed personal information (bra size, weight, etc.) and are prolific about their experiences in rented finery.
“A few years ago, people felt uncomfortable with reviews online,” Giguere noted. “Now it’s a baseline everyone expects. We’re looking at where it goes next.”
Pippa Morgan, executive vice president for the retail division of Aritzia, talked about the Vancouver retailer’s recent U.S. expansion. The 70-store chain, which Morgan joked is the “biggest retailer no one’s ever heard of,” opened its first Boston store in the Prudential Center last month.
“We knew how many Canadian retailers have failed crossing into the U.S., so we’ve been cautious,” she said. The retailer has stocked its online call center with former store associates, a move that’s proven so successful that the call center generates as many sales as the chain’s top stores.
Asked for a piece of advice for the MBA-seeking crowd, Morgan responded, “The answer is in the store. Many of you have high potential and will do great things, but never think the store is beneath you. All the clues to the problems and the answers are in the store.”