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Direct-to-Consumer Brand Cuyana’s Old-School Approach to New Retail Keeps Customers In Stores

With its minimalist design, accessible price points and an emphasis on quality essentials—direct-to-consumer women’s apparel and leather accessories label, Cuyana, checks off all the hallmarks of a millennial-centric brand.

And the company has managed to sidestep many of the traps that other direct-to-consumer businesses have fallen prey to—like rising shipping, return and online marketing costs—by embracing (and really enjoying) traditional retail.

Karla Gallardo and Shilpa Shah, two millennial women who gave up their regular nine-to-five jobs in finance and technology in pursuit of better quality products, launched Cuyana in 2013 with both an online store and a physical store. “We were truly the first direct-to-consumer brand that is vertically integrated that said physical stores is actually a key ingredient to our growth strategy,” Karla Gallardo, Cuyana CEO, and said Wednesday at WWD’s Retail 20/20 event in New York City.

“We knew we were going to be a direct-to-consumer brand. Warby Parker had done an amazing job showing us that customers really wanted better quality at a better price point,” Gallardo said. “We also knew there were a lot of advantages of starting the brand online.”

As a digital direct-to-consumer brand, Gallardo said Cuyana was able to use data collected online to enhance its assortment and could control its message of “owning fewer and better things,” which ultimately built a brand that was stronger and addressed its customers’ desires.

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However, as Gallardo and Shah developed their business plan, they soon realized that building a brand through digital interactions only was limiting.

“Digital allows you to build efficiency, to build convenience for your customer, but you’re not able to build an emotional connection with your customer through transacting online,” Gallardo said.

Receiving a tracking notification about an online purchase can’t compare to the uplifting and exclusive feeling of purchasing a handbag in a beautiful setting. “That special component about luxury experiences for retail stores is something that we knew would be key in creating Cuyana,” she said. “Fashion, really, is not a transaction. Fashion is an expression and there is no digital experience that is going to allow you to build those connections with your consumers.”

The company has since spent the last several years examining what drives its customer base to leave their homes and go to its stores in San Francisco, Los Angeles and New York City. Customers certainly appreciate the “touch and feel” aspect of shopping for leather, cashmere and silk goods, and that hands-on experience equates to larger order sizes. Cuyana’s average in-store purchase is 30 percent to 60 percent more than online.

However, experiential retail—be it adding a café to a shop floor or smart fitting rooms—isn’t necessarily enough. Gallardo described these retail trends as “insert here” solutions without any proven benefits. “For us, retail isn’t dying. What’s dying is our imagination,” she added.

Rather, Cuyana aims to create an “artful experience” and physical spaces that reflects the brand’s core values. The company has mapped out journeys for each type of customer that may walk into its stores, from those that know nothing about Cuyana to repeat clients.

“The advantage we have with stores is that we have human beings serving customers and we are able to react to the unspoken emotion that a customer has and no technology can do that,” Gallardo said.

The brand’s New York flagship serves as an example. Customers can get a quick 101 on the brand through a visual presentation of its bestsellers, while a pin board lays out its values. Gallardo said the board creates opportunities for sales associates to share details about the brand’s supply chain, like how it sources cashmere or treats its leather. Meanwhile, consumers can dig deeper into the design process through Cuyana’s “bag immersion,” or presentations that show what colors, patterns and materials were considered during the making of the bag, and where it was all produced.

The stores also aim to elevate the try-on experience for accessories, which is often a forgotten space in department stores. Cuyana’s accessories try-on areas are outfitted with big mirrors and a bench where customers can put their own bag and bring in other bags that they want to try-on. The store also has beautifully designed wooden objects that mimic the size and weight of essentials like computers so customers can actually test whether that bag is for them. “Our goal is for customer to pause and really interact with the product,” Gallardo said.

A common description Gallardo said she hears about the brand’s stores is that they bring customers calmness. The stores are outfitted with delicate brass details and soothing colors. Sales associates are encouraged to help shoppers without the pressure to buy.

“We want to enhance this feeling of ‘pause’ that is really hard to have in today’s world. We rarely pause to really think about our purchases,” she said.

Moving forward, Gallardo said she hopes to see more brands develop their own brand of retail this true to their values. “Every brand is unique,” she said. “The types of immersions that customers should have with those brands should be special and not be the ‘insert here’ models that we are seeing everywhere.”