This week, a look at the retailers evolving their business models and the luxury brands embracing the mall.
As retailers evolve to compete, they’re infringing on the territory of one-time industry disruptors. Now, those with formerly innovative business models are expanding their horizons.
With more sales channels and new technologies emerging, retailers with a narrower focus are falling out of fashion. Not only is differentiating becoming more challenging, but maintaining a singular focus is proving too limiting. Among those that have recently abandoned their zone are Stitch Fix, Rent the Runway and even luxury players like Oscar de la Renta. Their apparent goal: to become a hybrid of the business model that put them on the map and, well, every other thriving retailer.
Regardless of a retailer’s origin story or DNA, the new common goal is to altogether facilitate for shoppers the discovery and easy replenishment of products, and ample inspiration. Just as brands and retailers are aiming with their marketing to meet customers wherever they are, they’re also striving to offer up a shopping experience for their every mood.
On Wednesday, Stitch Fix introduced Stitch Fix Freestyle, opening its e-commerce offerings to shoppers who have never purchased one of its signature Fixes, a stylist-curated boxes of products. When Stitch Fix launched in 2011, it set a new standard for personalization, using a combination of AI and a human touch to customize selections of styles for its members, for a $20 fee. It started selling a la carte products to those ordering boxes in October 2019. According to Elizabeth Spaulding, Stitch Fix CEO as of August 1, a “significant number” of clients now supplement their Fixes with additional products purchased on StitchFix.com. On the company’s third-quarter 2021 earnings call, in June, she said the new option led to the average weekly units ordered per client reaching a record high in the quarter.
Rather than an add-on to Stitch Fix’s core product, Stitch Fix Freestyle reads like an extension of it — fusing its personalization expertise with a traditional e-commerce experience. Shoppers take a quiz about their style preferences and are served up pieces that match their fit, size, style and budget. Complete outfits fitting their criteria are shown, offering guidance to those used to working with a stylist. Shoppers can be new to Stitch Fix and can place orders without a stylist and surcharge.
“We’re seeing a fundamental shift in people’s shopping expectations,” said Spaulding. “We believe [this] will give us the opportunity to also meet the needs of consumers who enjoy browsing and want to participate in the shopping experience.”
She added, “It’s the next step on our journey to create the ultimate destination to find what you love, from shopping to styling to inspiration.”
To promote the new offering, Stitch Fix will launch on Monday an omnichannel campaign titled “We’re So You.” The objective: to highlight the company’s new means of catering to shoppers beyond those seeking support. Ads will roll out on TV, streaming services, digital, radio and podcasts. Social media posts, influencer activations and PR will also promote it.
Early in the pandemic, when lockdown orders prevented retailers from offering hands-on customer service, launching a styling service in some shape or form became the go-to solution. Companies from Nordstrom to Athleta to indie brand Kallmeyer are among the many that launched virtual styling appointments, free of charge.
That’s not to mention that retailers from Frank and Oak to ThredUp now offer personalized boxes of products. And a wide spectrum of retailers, from Buckle to Dillards, allow customers to shop by outfit.
Like Stitch Fix, Rent the Runway has been busy supplementing its original service to stabilize the business. In June, it expanded its resale business to non-members, allowing anyone to purchase its worn styles via its website.
The trend calls to mind the evolution of many direct-to-consumer brands. Out of the gate, being marketed as such provided a novelty and savings promise that worked to draw shoppers. But, for continued growth, many have found it necessary to link with wholesale partners, which facilitate discovery and customer acquisition. For example, Nordstrom is currently carrying DTC-native brands La Ligne, Lunya and Reformation, among others.
Likewise, luxury brands have been busy expanding their presence to channels beyond their own and those without any clear prestige. On the beauty side, Sephora has added StriVectin to its shop-in-shops within Kohl’s. Oscar de la Renta and Altuzarra are now selling on Amazon. Meanwhile, American Dream — the New Jersey mall with a waterpark — debuted Hermès and Saint Laurent stores when it opened its luxury wing today.
But it’s more than a move to omnichannel; it’s more like a pivot to omniservice. In addition to being where customers want to shop, it’s serving them what and how they want to be catered to, without restrictions.
On Monday, Nordstrom Rack launched its “More Reasons to Rack” campaign, which will run until early 2022. The retailer’s goal is to get in front of more price-conscious consumers, while also touting the ease of shopping its products — compared to competitors, anyway. As it states, Nordstrom Rack products can be shopped via its app, website and stores, and can be returned and picked up via Nordstrom and Nordstrom Local stores, in addition to its own locations. According to a spokesperson, the campaign is currently rolling out in nine of its top-20 markets via video, digital out-of-home and social media channels, including Facebook, Instagram and TikTok.
As shoppers become more conscious of their consumption habits, they’re increasingly looking to better manage their spending. In response, more retailers are offering resale and flexible payment options, for example. During a NYFW panel discussion at the House of Afterpay on September 10, Nick Molnar, Afterpay co-founder and co-CEO, said the company’s app page linking to its retail partners drives 4 million leads per month to their channels. For retailers with a value prop of affordability, that spells competition.
In the end, customers win, with more options at their immediate disposal. But, as fashion is cyclical, they’re bound to demand originality when a large percentage of retailers look the same.
Gentle Monster’s David Kim on setting up shop at American Dream
Though not part of today’s rollout, Seoul-based fashion eyewear brand Gentle Monster will soon open a store in mega-mall American Dream’s new luxury wing. The company is known for its art-filled stores that read like unique exhibits. Each incorporates pieces of kinetic, robotic art that play into an ever-evolving store storyline. Its 22 other stores are located in cities including L.A., London and Dubai.
Earlier this week, David Kim, Gentle Monster USA director of customer experience spoke with Glossy about the draw to American Dream and his expectations for luxury thriving there.
Why open a store at American Dream?
The strategy and thought behind the curation of experience and content was something we admired. This is a new type of mall experience that we’re not familiar with, but also something that we feel will quickly evolve into a major destination. We’re pleased to be able to showcase our experience in a setting where experimental and experiential design is understood and encouraged. It’s a different challenge for us, but we’re confident our experience will become a great addition to the Dream experience.
Were the neighboring stores a key factor?
I believe this is the first location where we signed off prior to fully knowing who our neighbors will be. This comes to show the amount of trust we have in the project and owners.
Are your stores typically housed in malls?
We’re currently investing in more mall locations. [The opportunity] to take advantage of accessibility, security and exposure to a wide range of people has made malls a core piece of our retail strategy.
What are your expectations, in terms of foot traffic?
It’s a new setting and environment, where there are far more options, not just retail, but [also] for experience and content. We hope we’re able to integrate content within our experience in a way where traffic can be drawn to us from what is already heavy traffic in all corners of the mall. It’s just a matter of guiding them to our newly opened wing and store, which I imagine will be one of our top visited locations nationwide.
How are you meshing art and technology in-store?
Our kinetic [installations] are evolving, and we’re [incorporating] more technology to create immersive stories and visuals. In other words, what used to be static images of visuals are now more immersive videos with technology, and the possibilities have increased unimaginably. Technology is, in a sense, fueling our creativity and imagination, bringing more possibilities to what can be done.
What’s the balance of product and experiential components in this location?
We don’t typically calculate the balance of an experience, but rather focus on illustrating a full story within the experience, infused with product. The kinetics and art objects are meant to complement the design of our collection, but also to inspire different visions and dreams that you never thought of.
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