Q&A With Gym Tan
Gym Tan is our July Mentor! She’s an experienced industry leader with deep operating expertise in the apparel and fashion industry. Gym has a track record of successfully taking brands into new markets on a global scale and is adept at both the creative and commercial components needed.She has also built and managed design, development, sourcing, and commercial teams for both international and domestic retail. Functional Specialities: Product Design & Development, Merchandising, Retail Strategy & Execution, New Market Entry and Customization, International Business Development, and Strategic Partnerships for China, Asia, and N. Europe. Industry sectors: Luxury Apparel, Premium Denim, Activewear, Kidswear, Footwear & Accessories.
We sat down with her (virtually of course) to chat about consumer behaviors during the pandemic and learned of the many changes that have since occurred. If you're interested in discovering how COVID-19 has affected the way customers shop, such as in other parts of the world, like in China and Asia, and are curious about tips to focus on fundamentals when creating a retail strategy for your brand, then you can read all about it in this fascinating interview below!
We saw different consumer behaviors during the pandemic (customers favoring products like pajamas and athleisure). Do you think that for the next few seasons customers will prioritize the easy-to-wear items over more formal and fitted items?
Clean, effortless style has always been the hallmark of American dressing, and here in California, where the lifestyle is even more laid back and casual anyway -- definitely! This trend towards WFH isn’t going away anytime soon. We’ll be in Zoom meetings, virtual events and sheltering indoors well into 2021. So with the exception of occasion dressing, I don’t see consumers buying more formal and structured items for awhile. Look at the demise of brands like Brooks Brothers, Tailored Brands and Theory.
As for pajama dressing -- even though CNN reported PJ sales up 143% in May -- I expect to see a move towards more variety in shopping carts going forward. Things will open up slowly and while consumers will still want comfort, I predict people will finally start looking at updating their WFH looks after all these months. This will likely benefit more elevated brands selling co ordinated pieces like Rebecca Taylor, Joie, Vince and J Crew. I see consumers gravitating toward more uplifting colors and patterns, dressing to please themselves and playing things up through cool accessories.
In mid-June, the SF shops started to reopen. As someone who works with the Asia and China markets (that opened their shops a few weeks earlier), are you noticing any in-store shopping experiences that customers are particularly drawn to? If so, what features should the American market consider trying?
Every customer loves to feel special. Asia is renowned for high touch, personal client engagement and service especially in the luxury space with larger ticket items. Never underestimate the power of one. Every single positive client engagement can have an amazing outcome. The single most dramatic example of this was at Lane Crawford Beijing right after they reopened. One of their personal shoppers invited their client to a private preview of new arrivals and personal styling session. This personal shopper was able to transform the experience and helped that client fall in love with $225,000 ( RMB1.4 mil) worth of gorgeous fashion!!! That was the single highest transaction on record at Lane Crawford since reopening. This is an extreme example of course but highlights the importance of every single customer experience and its potential. This is the time to focus on white glove customer service and engagement, personalization and building loyalty with customers and their transactions.
Harbor City, one of the top 3 malls in Hong Kong ran a very successful promotion - from Feb to June - to drive traffic and keep customers engaged. They partnered with tenants offering cash coupons and discounts from participating retailers, F&B outlets and dine in restaurants. They cycled through a variety of different themes - Food, Kids, Sportswear etc. The mall ran massive amounts of marketing and promotions, offering free parking (parking can be expensive in HK with its high rentals) with purchases (including special rates for auto services - cleaning, tune ups etc) -- all which created large crowds and a buzz every single weekend throughout those stressful months. Customers posted pictures of the stacks of coupons they’d accumulated, competing with each other on Instagram, WhatsApp and WeChat. They also posted multiple meals and hauls made with these coupons. I could see US outdoor and strip malls running similar types of promotions to drive traffic and buzz as we reopen with tremendous opportunities for cross collaboration among retailers and services. One could buy $X worth of merchandise at Retailer A, for a discount at Restaurant B or a free car wash at the local outlet and vice versa.
Finally, Double Five in Shanghai or the ‘May 5th Shopping Festival’ was another hugely successful event. According to reports this event created $2.2 billion of sales over the 24 hours. Even though it was an online event, the results extended to the physical stores for many brands. The run up and huge online exposure drove customers to check out the brands ahead and further engage with physical stores after.
In such uncertain times, we see brands struggling to create a merchandise and retail plan. What are your top tips for creating a retail strategy during this time?
Retailers have always had to adapt to changes in the marketplace and consumer preferences. But today’s situation in scale and duration is unprecedented. Every brand and retailer has had to make adjustments, some major, in order to survive, prepare for further disruptions and succeed through whatever comes next. Retailers are finding themselves with either an extraordinary spike in certain categories and/or a complete nose dive with others. Especially in the Lifestyle and Apparel sector where purchases are discretionary and following are some thoughts specific to this sector.
My absolute top tip for merchandise and retail strategy in the time of COVID would be to :
Maintain flexibility in product offering and inventory management. Review your category mix and current inventory often. Most brands could do with a good edit right now to reduce collection width and depth. Factor in changes to customer buying behavior based on recent sales and adjust all forward buys to preserve cash. The immediate lifestyle changes and mandates are extreme and have made health related considerations key in product relevance. All brands should be laser focused on right NOW and if they’re not, they should be. Begin implementing merchandising measures now to counter current demand distortions while being ready and prepared for any upswing in sudden consumer activity.
Take how face masks are the newest category for pretty much every brand and retailer. From grocery stores to high end luxury, it seems everyone is offering masks and creative face coverings. In many cases this is a whole new revenue stream with new design offers growing as we coordinate masks with our daily outfits, our significant others, work teams and even our wedding enselms. US consumers will want better masks - more comfort, breathability, fit and of course, improved virus protection. Masks will get even more customized for ever more specific functions and consumers will pay more as we wear them at work, meetings, schools, sports and outdoor events.
WFH is another obvious lifestyle change set to continue indefinitely. Brands and retailers with a wider reach should continue focus on comfort, practicality, ease and care while developing new fabrics, silhouettes and products. All while watching for other changes in the wellness, home and entertainment space and possible surges in demand as we reopen.
That said, on the opposite spectrum - there’s never been an explosion of personal branding and direct selling as we are witnessing now! I foresee a rise in consumers wanting to express their individuality through clothing once again which creates new opportunities for brands with a unique vision and message. It bears repeating that I truly feel consumers will eventually gravitate towards uplifting colors and prints and move away from the same daily uniform.
My next tip is controlling your cash flow while accelerating the shift into digital and virtual sales. We know that throughout this pandemic, consumers have become even more comfortable buying products online. We also know consumers are spending way more time online and discovering new brands, products and influencers through social media. This trend is just going to keep growing. According to Digital Commerce 360 online sales are up 76% this June as compared to last year. My e-comm contacts in Europe, which reopened weeks ago, say “ It’s like Black Friday everyday!”
Continued physical distancing will require retailers to develop reliable digital capabilities to serve consumers safely. Brands and retailers that are mostly wholesale driven or store based should also consider new e-commerce partnerships. You could offer exclusive online only products with these partners, work on flash sales or introductory type promotions. These additional online marketplaces can broaden your reach in both existing and new regional and/or even international markets. This also provides an opportunity to sell to warmer cities or countries as we cycle out of SS20 products for example.
Finally, all retailers will have to redefine retail and work spaces and practises depending on individual state requirements around the interface between sales staff and consumers - from temperature checks at the door, ability to try on and access to dressing rooms, cash wraps and contactless payment - all these touch points need to have safety as the top priority to keep stores open and operating smoothly. Retailers should also consider expanding into new channels of operation and sales : curbside pickup, home delivery and boutique in a bag options, shopping by appointment with a personalized edit ready in store, live streaming and virtual chat sales through Zoom, Google or mobile.
To survive in this new industry, brands need to explore new opportunities and be open to some changes. Tell us about retail business pivots that made you feel inspired.
Firstly, I’ve been inspired by how brands are engaging with customers on a more personal level through social media showing their human side and taking us behind the scenes through their stories -- introducing employees and C suite alike. I’m also inspired by how brands are sharing their platforms and stores, to showcase like minded individuals/ brands and services. And witnessing the numerous collaborations and coalitions formed between companies to support health and front line workers through direct financial contributions, discounts and including even converting manufacturing facilities to make masks and PPE.
This has been the perfect time to focus on building brand engagement and equity.
The second retail pivot that I’ve found truly inspiring is the move into selling through live events and even video. Here’s another great example from China’s Intime Department stores. According to a recent news report from Jing Daily, more than 5,000 sales associates from Intime’s physical stores are also registered as livestreaming hosts, and over 90% of orders through livestreaming were from new customers boosting real time engagement and traffic.
US brands are also starting to show product details in real time, offer styling and virtual shopping appointments through scheduling apps, complete beauty consultations via Zoom, Google and even FaceTime. Video chats give retailers a highly customizable and fully engaged experience with full confidence to buy. Companies like cabi that typically sell through home based trunk shows are going virtual and showing collections through mini fashion show videos and selling via Zoom and Facebook Live. The SF merchant corridors have also just started virtual showcases - highlighting one or two retailers, services and restaurants each week.
In response to the shelter-in-place, brands are adding additional services for their business, including online events and home products. If you could give a piece of advice on how brands can expand their business, what would it be?
Now is the time that brands really need to dig deep and focus on the fundamentals :
(1) What’s the secret sauce that makes your brand special. Is it your product, brand experience or delivery? Focus clearly on what sets you apart from everyone else and what value you bring to the market place.
(2) Looking inward also extends to your community and why you created the brand in the first place. What need does it fulfil, what new benefit or change do you bring. Many great brands and products were created during a crisis or right after - IBM, Microsoft, the iPod, Dropbox ….. How does your brand solve a problem or help your consumers?
Once you have these -- Stay scrappy and flexible. Focus on your existing customers to elevate loyalty and increase repeat sales. Personalize, maybe even customize your product or service to existing consumers based on total spend. For example through customized colors, special sizes and designs or simply by adding their initials. Another avenue could be to offer monthly subscriptions for loyal customers. You could offer a small discount or free shipping for monthly subscribers. This builds more customer loyalty while providing some reliable revenue flow at the same time.
Then use some new initiatives, maybe something covered here to connect and attract new customers.
Thank you gym!