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 model, which would leverage e-commerce, social media and data to better understand and deliver what customers really want.
Halfway through the journey, Rebecca Minkoff’s vice president of e-commerce and innovation Krissie Millan says the shift has impacted virtually every part of the business.
“It touches every part of our organisation, from design to merchandising to product development. 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,” Millan tells IRW.
The changes have seen the company lay off about a dozen employees, most of which supported wholesale operations in March, and bring together different teams to work more closely within the business. For instance, Millan now has regular meetings with the head of handbag design, to feed insights from customer and sales data back into the design process.
“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,” she says.
An early adopter
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, with its stores featuring connected walls that showcase the brand’s current collections and enhanced fitting room mirrors, which immediately 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.
In recent months, technology has played a key role in Rebecca Minkoff’s transition to a direct-to-consumer model through a movement it calls ‘see, buy, wear’.
“We shifted to an in-season fashion show where we make collections available to customers immediately after they walk the runway. This essentially is a fundamental change in our business model,” Millan says.
Millan tells IRW that while the brand is still a majority wholesale business, it is seeing double-digit growth online. She says the ratio of wholesale versus direct-to-consumer sales is similar to brands like Kate Spade and Tory Burch.
The adoption of ‘see, buy, wear’ 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 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.
“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.
Rebecca Minkoff is closing the gap between its products and customers in more ways than one. Millan says the brand will this year launch a collection of smart handbags that have tags to 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 of this is an obsession with data. Millan herself is a self-professed data nerd, coming to Rebecca Minkoff from McKinsey.
“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 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.
“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.”
However, she cautions that brands and retailers must keep the customer in mind when investing in technology, or they could risk wasting resources and alienating customers.
“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.”