The future of retail, according to Rebecca Minkoff
Eighteen months ago, facing the darkening of department stores in the US and empowerment of shoppers online, Uri Minkoff, CEO of Rebecca Minkoff, made a decision to change the way the popular American fashion and accessories brand reaches its customers.
Minkoff mapped out a two-year transition from being primarily wholesale to a direct-to-consumer business, which would leverage e-commerce, social media and data to better understand and deliver what customers really want.
Halfway through the journey, the company has laid off some employees, most of which supported wholesale operations, created new roles in other areas and encouraged different teams to work more closely together within the business.
“You rarely see design teams talking to digital or e-commerce teams – especially at a fashion brand – but we’ve had to scramble that and put people together in a way that could feed this information flow,” Krissie Millan, vice president of e-commerce and innovation at Rebecca Minkoff, tells Internet Retailing.
“We’re identifying different supply chain partners and looking at [how] to create shorter lead times. We recently hired a new head of handbag design and a new head of operations and just moved warehouses,” she adds.
The changes have touched every part of the organisation, “from design to merchandising to product development,” says Millan, who meets regularly with the company’s head of handbag design to feed insights from customer data directly into the design process.
While the brand is still a majority wholesale business, it is seeing double-digit growth online, according to Millan. She says the ratio of wholesale versus direct-to-consumer sales is similar to brands like Kate Spade and Tory Burch.
Founded by siblings Rebecca and Uri Minkoff in 2005, Rebecca Minkoff handbags, shoes, clothing and accessories are sold in over 900 stores worldwide, including upscale department stores like Saks Fifth Avenue and Nordstrom. It also operates four standalone stores in the US, two in the United Arab Emirates, three in Hong Kong as well as an online store.
The brand has long been known as an early adopter of retail technology. Its stores feature connected walls showcasing the brand’s current collections and enhanced fitting room mirrors, which recognise items through RFID technology and make product recommendations.
“Technology has always been a big part of our story. We continue to look for emerging technology and are always looking to identify the best way to bridge the experience across channels,” says Millan.
But in recent months, technology has played an even bigger role in Rebecca Minkoff’s transition to a direct-to-consumer model through a movement it calls ‘see, buy, wear’. Since February 2016, the company has made its collections available to customers immediately after they appear on the runway.
The new model has allowed Rebecca Minkoff to engage more closely with its customers and build its brand. For instance, the fashion company this year held its Spring show at The Grove, a popular outdoor shopping centre in Los Angeles.
The day included brand partnerships and activations, such as yoga and talks about tech and entrepreneurship with Rebecca Minkoff herself, and culminated in a runway featuring eight celebrities and social media influencers, with a combined following of 20 million. By all accounts, the ‘see, buy, wear’ movement has been a huge success.
“We’ve seen about a 65 per cent lift in our online sales and a 25-50 per cent increase in sell-through for stores by making collections immediately available after they walk the runway,” Millan says.
The brand is closing the gap between its products and customers in more ways than one. Millan says Rebecca Minkoff is set to launch a collection of smart handbags with tags that open exclusive content, experiences, offers and promotions for customers and make them eligible to join loyalty programs, which will also launch later this year.
Underpinning all the changes at Rebecca Minkoff is an obsession with data. Millan herself is a self-professed data nerd and worked at McKinsey before joining the fashion company.
“Data permeates every part of our business, we believe it will power the future of retail,” she says.
Most notably, the fashion company has partnered with predictive analytics platform 42 Technologies to integrate the data from its website, POS systems, store technology and digital marketing channels all in one place. The next step will be to bring in data from social media and wholesale channels as well.
Millan says this approach gives her useful insights to make decisions. For instance, she knows that areas of the website with user-generated content get around two million impressions and lead to a 30 per cent uplift in average order value.
However, she cautions that brands and retailers must keep the customer in mind when investing in technology, or they could risk wasting resources on features customers don’t want or need.
“In any technology, we always try to put our customers first and ask if this is really going to be beneficial to them. By putting that lens on, it helps us make sure every initiative we do will create value for us and customers,” she says.
“We try to put up as much of a guard rail as we can to make sure [this risk-taking] doesn’t crash our whole business. But at the end of the day, it’s being fearless to really go after the things that may not have been done before.
“All these changes are underpinned by a strong innovative mindset and not being afraid to try new things, make mistakes and to learn how we can push the boundaries for new growth.”