Three of fashion’s top chief executives revealed the challenges they faced and strategies they employed to weather Covid-19’s worst impacts.
Macy’s chief Jeff Gennette
“Agility is not a new concept for business, especially for retail, which has never been for the faint of heart. Looking back, I never knew what agility meant until Covid hit,” Macy’s Inc. CEO Jeff Gennette said at the WWD Virtual Apparel and Retail Summit, noting that the company was forced to shut off 75 percent of its revenue stream virtually overnight when coronavirus store shutdowns began in March.
“That was a shock to the system. So, we wrote the playbook along the way [and] we built new muscles that will serve us for the future,” he added.
Macy’s scrambled to hoard cash and pull “every lever available to us,” like canceling orders and delaying deliveries. It also pivoted to a digital-first mentality go serve shoppers suddenly cut off from stores, and then moved trapped inventory by having department store teams fulfill over half of its online orders from those locations.
According to Gennette, Macy’s “learned to become more scrappy” as a result of the pandemic. “Initially, curbside pickup was a hack” that launched in April and “served our customers until we could develop Curbside 2.0” in the following weeks, he said.
Now that the dust is settling after the adrenaline rush of reworking the business at the drop of a dime, Macy’s is figuring out how to keep the momentum going.
“The velocity of change in customer habits was a remap of the customer journey. We listened to our customers, we followed the data and we pivoted quickly where needed,” Gennette said, adding that if customers were going to be on Zoom calls, then Macy’s needs to get them the right fashion options.
Extending the range of fulfillment options was also another example of how Macy’s “successfully manage[d]” the channel shift.
“This is the kind of year you create Plan A, Plan B and then Plan 22. True agility is being able to pivot and develop quickly,” Genette said.
Ralph Lauren’s Patrice Louvet
Meanwhile, Patric Louvet wasn’t exactly thrilled when, at a company meeting, he faced the question: “How can we at Ralph Lauren accelerate digital and be a leader in this space?”
“It wasn’t the most comfortable question to answer,” he admitted. And even though Ralph Lauren had attracted some key talent and made some digital investments, “We were behind,” Louvet acknowledged.
The CEO is spearheading the next initiative at the company—Next Great Chapter plan—to position Ralph Lauren for growth, where “[l]eading with digital remains a priority for us.”
The pandemic and 2020 as a whole have reflected how the company has used “digital to help deliver Ralph’s creative vision to consumers around the world,” Louvet said.
While the apparel giant’s early investments in digital gained some traction, it was the pandemic that pushed the company to “create new digital approaches we never dreamed of before,” Louvet said. That meant finding new ways to engage with consumers, while focusing on how they were now living through the pandemic. Consumers were not focused on their closets, but on their family and their health, he said. So the company pivoted its digital approach to content, using the platform to engage via “Ralph Lauren at Home.” New content was aimed to appeal to kids, while a recipe for brownies from the mother of founder and chief creative officer Ralph Lauren made its way to the site. Along the way, the company added a virtual showroom and online clienteling. And the entire Ralph Lauren store in Beverly Hills was shoppable “online using augmented reality so you can shop there wherever you may be in the world,” Louvet said.
“Years of digital adoption [were done] in a matter of months and the pace will only accelerate. In fact, we just scratched the surface of what is possible,” he added.
In a truly connected world, Louvet says companies must consider the evolving role of the store. Is four-wall store profitability still a relevant metric or is there a new way to capture the digital consumer? And how can fashion companies leverage AI without inadvertently introducing bias? Louvet also mulled how can digital tools assist in helping fashion companies deliver product faster.
And lest fashion executives think the idea of “feeling” is just about the sensation of fabrics on the skin, Louvet said it also encompasses the emotional connection with consumers and how digital can enable all those moments of connection between the consumer and the brand.
“The challenge and the opportunity now is to be able to answer them digitally,” Louvet said.
Michelle Gass of Kohl’s
“The retail industry was especially confronted with unprecedented issues and faced a massive amount of change [including] where the consumer is headed and how to adapt to meet them there,” Gass said.
At Kohl’s, a focus on consumer behavior has been key at driving innovation and new thinking to deliver to customers the ideal experience, whether that’s including new brands or enhancements to services and new conveniences.
Gass called Kohl’s new partnership with beauty retailer Sephora an elevated transformational experience in 2021, when the cosmetics giant’s shop-in-shops will launch inside 200 of the department stores.
In studying where the consumer is going, Kohl’s embarked on a path of “bold aspirational vision for the company to be the most trusted retailer of choice for the active and casual lifestyle,” a move that differentiate Kohl’s, Gass said.
Kohl’s has seen three shifts since the pandemic. “Families are living more actively and casually than ever before [and] the importance of value has never been greater,” she said, noting the seismic shift to digital commerce, the third big trend.
As for getting out and about, Gass said for the first time ever, more people are exercising now than before, paving the way for Kohl’s to be the destination for activewear and fitness gear. The company this year has doubled its active business from 2013 levels, and she noted the ability to grow the category. It’s now 20 percent and could become at least 30 percent of the overall business at Kohl’s. “All indications are that the trend will accelerate in the coming months and years ahead and it’s a large focus for the company,” the CEO said.
And while the pandemic has dramatically increased the number of customers now comfortable shopping online, Gass was quick to point out that the shift doesn’t necessarily signal brick and mortar’s demise. “There will be a place for great brick-and-mortar retailers,” she said, adding that “it’s not an ‘or,’ it’s an ‘and.'”
Kohl’s entered the pandemic with a strong omnichannel platform, which became more critical during the outbreak, and it changed the site experience to focus on categories that have become more important to its customers, It also offered curbside pickup shortly after the pandemic hit.
“This has been a year that none of us expected. It’s presented extraordinary challenges, but also some big opportunities,” Gass said.