Retail was already an industry in flux, then came the pandemic. Now every aspect of how brands and retailers operate is under the microscope, as they try to eke out greater efficiencies in the supply chain and determine how to better connect with consumers. In some ways, digitally native brands have the advantage as the uncertainty stretches out from weeks to months.
Digitally native brand Greats is even better positioned than most, thanks to the company’s recent acquisition by footwear behemoth Steve Madden. But that doesn’t mean the company is standing still. Ryan Babenzien, the company’s CEO and founder, said that like the rest of the industry, he is re-evaluating operations to see what can be learned from this unprecedented time.
For instance, he’s welcoming the move to smarter buying, which has been necessitated by the travel bans. Instead of crisscrossing the globe for trade shows, buyers are now meeting virtually with no hit to productivity, he said. “Quite frankly, it’s a better system. There was a lot of behavioral history built into buying that was very, very inefficient,” he said. “The argument for touching and feeling and doing all the things that a buyer needs to do and the tactile nature of that purchase, that can still happen. They just don’t need to fly to a trade show and look at [the product] once, look at it twice, and then do it again. Do it digitally… and we’ll send it to you.”
But even as some things are changing, Babenzien said the pandemic has his company clinging to its digital-first ethos. “We were going this direction already, obviously. Greats was founded as a digitally native brand. And we were adding in some additional wholesale partnerships to the one that we had for years. That’s sort of changed back to some of the original plan, which is be mostly digital,” he said, adding for traditional players, COVID-19 has been “an accelerant.” “I think that’s every single brand’s strategy, whether you’re a wholesale business or not. You need to be more digital. So for us, we’re really back to our roots.”
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That’s not to say Greats is swearing off retail. It’s just evaluating it differently. “I still think retail plays a role in any brand, including ours. It’s just not going to be what it was 10 years ago and won’t even be what it was last year,” he said.
Funding for companies like his will also likely look quite different down the road. Whereas DTC brands saw a lot of interest from venture capital in the past, recently that has slowed down. And Babenzien said he expects even more, which isn’t a bad thing.
“If you are in need of cash to grow, it’ll be a tough time to get it. And venture capital was never the right capital source for brand building,” he said. “If you can’t give somebody a 10-year window to create something profitable and successful, it’s just really too short, which is why you’ve had all those problems. It was like, grow fast, get customers and we’ll figure that out. And that’s fine when you don’t need capital, but when you hit a moment like this, it’s sort of catastrophe.”
Watch the video to learn more from Babenzien on where retail is headed, the emerging marketing strategies and the advantages of being able to “draft” off of an established player.
This video is part of a series Sourcing Journal created with support from Alibaba.com, which is delivering new ways to help businesses pivot to a more global and digital economy. Learn more about their Online Trade Show and other global supply chain services here.