Sister and brother Rebecca and Uri Minkoff bring a yin and yang to their high-end fashion brand. Rebecca, the designer behind New York City-based Rebecca Minkoff, has the creative vision and close connection to the female buyer of her accessories and apparel. Uri, the company’s CEO, has a software background and passion for digital marketing.
Together, they’ve been growing the brand by creating a close relationship directly with the consumer, skirting the conventions of the industry.
Last November, the duo launched their first stores in Manhattan and San Francisco, a test bed for what Uri calls “Retail 3.0,” which attempts to translate many of the benefits of the online shopping experience to brick and mortar. Developed in collaboration with eBay, both locations feature a large interactive screen at the entrance, where customers can browse products, request beverages to enjoy as they shop, and pick out items they might like to try on with the help of on-screen recommendations. IPad-wielding sales associates set up the fitting rooms, where RFID-tagged items are displayed on an interactive mirror. Should the customer want a new size or suggested coordinating item, they can request it via the mirror. Customers armed with the mobile app can check out right from the dressing room and opt in to a list of what they’ve tried on that they may wish to buy in the future.
This store of the future is designed to address many of the pain points of the real-life shopping experience, according to Uri. “Each piece of technology aids in making a purchase,” Uri told CMO.com. “It can remember your fitting room sessions. If we know you like the colors pink and black and are a size two, we can set up a room for you with appropriate options. And you never have to leave the fitting room half naked to find an associate.” On the back end, the company can theoretically get a better idea of how conversions actually happen in-store the same way they can online.
CMO.com talked to Uri about the intersection of fashion retail and tech, how he decides what customer-facing technology may have promise, the value of A/B testing creativity, and why he has eschewed the CMO role for a chief digital officer.
CMO.com: What are the biggest business challenges--and opportunities—in fashion retail right now?
Minkoff: We’re in this interesting marketing moment right now. We’ve been talking about the rise of the Millennial consumer for a while, and what challenges and opportunities that will present. We have this consumer who is a digital native and used to shopping high and shopping low and shopping socially. They’re educated, and they’re fast. The days where you had this customer loyalty and dictatorial marketing process are gone. It’s all been democratized.
At the same time, there’s the incredible speed with which what I’ll call the fashion colonization of the world taking place. It used to take a while for information to spread from city to city; now everything is immediate.
We live in a world where anyone can have a voice. Anyone can create a brand. And customer segmentation and individualization is becoming so key. Now everything is immediate. All of a sudden you have this instantaneous, potentially global appeal with a marketplace that is young, fast, educated, and informed. That creates a big shift in what was formerly a simple retail play.
CMO.com: How important is technology to your brand value?
Minkoff: We’ve been very early to market in terms of embracing technology, embracing platforms, and leveraging other influencers that embrace technology. And we’ve learned a lot.
Some of that is the “Amazon effect.” For a while, we all thought we needed the most beautiful website and the most creative ideas. And some of those things still hold true, but the best performing site is Amazon. It’s algorithm-based. It’s not the prettiest site, but it’s a functional workhorse. A lot of us have now realized that your technology stack, your analytics, and your data mining are critical and have an equal share in what constitutes marketing today. It’s now a balance of creativity and analytics. You can bring in people with a data-science background who can tell you exactly who your customer is, when she likes to shop, and what her preferred device is. Today, it’s about being able to A/B test creativity and keep iterating. Technology is intimately connected to our brand.
CMO.com: You previously ran a software consulting company. How does that inform your role as CEO?
Minkoff: I had a software company for 10 years. IT’s kind of like a CFO who becomes a CEO; they’re always looking at the numbers. Mickey Drexler [the CEO of J. Crew] probably looks at things through a merchant’s lens. Ralph Lauren looks at things as a designer and brand builder.
One of the things Rebecca and I realized early on was that we weren’t going to become an overnight critical darling. The right editor wasn’t going to convince the right store to pick us up. We realized we could build a relationship with the consumer through technology, and we’ve been at the forefront of that.
CMO.com: It must be a great benefit not to have the burden of any legacy technology and to build your strategy from scratch.
Minkoff: It’s super helpful. Over the last few years, we’ve been able to take advantage of the power of the cloud and platforms. We’ve been able to leverage best-of-breed technology at a fraction of the cost of maintaining anything legacy. We were at the right place at the right time and knew enough about technology to make it work. We’ve been able to make decisions that can scale. And everything from our phones, to our point-of-sale systems, to our email systems are all leased or hosted. We have a very light footprint.
CMO.com: How are you attempting to create a more personal interaction with your customers?
Minkoff: We’ve been trying to allow her to be more involved in our process, letting her vote and have a say. We’ve done things where we will present, for example, two runway looks and let her decide which one makes the cut. We’ve created campaigns that enable her to take her art and put it onto a t-shirt and model and photograph it for us or create a bag just for her closes friends. Rebecca was probably the first designer to have a dialogue on the Internet with consumers. Back in 2006, when she was starting up, she would spend an hour a day answering their questions and listening to and incorporating their suggestions. Our customer is part of the brand, and the brand is her.
CMO.com: How do you decide which emerging technologies you’re willing to take a chance on?
Minkoff: There’s not really a science to the sauce. But there are four things we look for in a technology partner. We want to know that the technology has legs—is the company going to be there to support it down the road, or is it one and done? We need to believe the technology will continue to add value over time. We have to understand what benefit it will provide for our customers. And the price-to-value ratio has to make sense.
CMO.com: Tell me a little bit about the business drivers behind your “store of the future”?
Minkoff: Between 1995 and 2005, Retail 2.0 emerged. You had this brick-and-mortar experience, and you had the online experience. And there were such great advantages and efficiencies that emerged with shopping online. You could get recommendations, set how something should be styled, create wish lists, access user generated content. In the store, however, it was still just you and the product and maybe a sales associate.
But in the store, you have all five of your senses, not just sight. The idea behind Retail 3.0 is about taking the best experiences one can have from ecommerce and figuring out how to leverage it in the store—not just technology for technology’s sake, but technology that could ease some of the biggest pain points of the brick-and-mortar experience.
Stores in Manhattan and San Francisco aim to translate many of the benefits of the online shopping experience to brick and mortar.
Online, you know the bounce rates by page; you can see the entire funnel. Besides count rates in a store or maybe some heat-mapping technology, there wasn’t much technology available to see that with brick and mortar.
Some of the problems we’re solving are social. Maybe you want the sales associate to greet you when you enter the store. A sales associate may be introverted or extroverted. So we thought about how we can ease that social moment, which can be a bit awkward.
We’ve introduced Rebecca into the equation by showing her recommendations for other items based on what you’ve brought in the fitting room. And we’re finding that a tremendous amount of the time women are asking for items they didn’t bring in based on those recommendations. “Oh, here’s how I can complete this look. Give me those shoes and that top to go with this skirt.” The biggest question people have is not what they’re going to buy today, but what they’re going to wear today. Seeing those photo recommendations gives people confidence.
I think people thought we would just be creating a tricked-out selfie station. But, instead, it’s an elegant approach to using technology to aid you when you need aiding.
CMO.com: Besides those improvements to the customer experience, what will be the benefits of having all of that additional data on customers?
Minkoff: First of all, the customer gets to choose how much information they want to share with us. There are no cameras in the dressing room or anything. They control the experience.
We’re the first people to try this, so the amount of data can be overwhelming. We’re still trying to process what’s valuable and what’s not. To know at a high level not just how many people made it into store, but how many made it into fitting room and how many people then bought things, would seem to be valuable. We’re not there yet, but the data is all there. What we do know is that we are selling four times the amount of ready wear [apparel] that we thought we would. We’re a brand known primarily for our accessories. But based on having this technology in play that enables customers to see how things might work together and enabling our sales associates to be more responsive, sales have been stronger than we anticipated.
CMO.com: Why did you decide to collaborate with eBay's retail innovation group on your Retail 3.0 concept? What were the benefits?
Minkoff: I had seen some of their work and was introduced to the gentleman running the group. I said, ‘I have a store of the future idea.’ He said, “So do I.” We traded notes and found that eight of our 10 ideas were the same. There was a great synergy between us. So I sat down with the CEO of eBay and pitched him on our vision. Both companies created teams devoted to this, and we collaborated for nearly a year on it.
CMO.com: Do you have a CMO?
Minkoff: No. We have a chief digital officer. In fact, we just hired a new one. We’re not a brand that has been built through large media buys. We’re nimble, and we move fast. Most of our marketing investment has been digital. If we decide that we’ll get into more media buys, we may split that marketing role out.
CMO.com: What were you looking for in a CDO?
Minkoff: I saw a lot of people that were great marketers—just amazing creative—that weren’t exceedingly digitally savvy. And I saw people that were extremely digitally savvy but didn’t understand the consumer or creative side. Ultimately, we found someone with an art director background who spent the second half of her career running digital organizations for luxury brands. She was someone that both our art and content people and our ecommerce people would respect.
CMO.com: What sorts of companies do you look to for inspiration about what to pursue next? Do you look outside fashion and retail?
Minkoff: Fashion and retail tends to embrace technologies much later. Beauty moves a little bit earlier. I’m the type of person that’s consuming TechCrunch and Mashable and VentureBeat. I’m looking much more at Silicon Valley startups and the tech world than I am fashion brands. That’s where the best ideas are generated and germinated. That’s what guides us.
Uri will be keynoting at the FutureM Conference in Boston at the Hynes Convention Center on October 6-8, 2015. Register for FutureM using the promotional code MINKOFF for $100 off your ticket and to be entered to win a chance to meet Uri at an intimate gathering during FutureM.
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