(The following article is property of Avenue Code, LLC, and was originally published with permission at TotalRetail on March 2, 2018.)
Justin Sellman is the vice president, e-commerce and digital strategy at GHURKA, a luxury leather goods retailer. We spoke with him to get his perspective on how luxury retail has adapted to e-commerce and where he sees retail headed.
Avenue Code: What changes have you seen in consumer behavior in the last 5 to 10 years, and how has that impacted your strategy at GHURKA?
Justin Sellman: I think two major things have been happening in retail. First, a switch to e-commerce. Consumers are much more accustomed to and comfortable with buying online. In 2007, I started a company, and by 2008, it was a direct consumer brand. In the following years, Warby Parker and Bonobos were launched, which is when you started to see brands conducting business primarily, if not entirely, online. Of course, Amazon.com had been around for awhile, but 15 years ago it was just selling books. This is a big shift in consumer behavior because these days, if you’re not transacting online, you’re not in retail.
The second major change has been the emphasis on mobile. This changes how consumers shop and browse, as well as technology. In 2007, retailers weren’t creating websites that look like what you expect them to look like now. Yahoo had a commerce site, but there was nothing like Shopify. So when Shopify came out in 2010, it really changed the perspective of e-commerce brands because it was so slick. Ten years ago it was extremely difficult to create a visually appealing website and almost impossible to translate that onto a phone. A shift to mobile has really shifted the technology plays, and people are aiming for a mobile-first approach now.
AC: What shifts have you noticed specifically in luxury retail, and how have you adapted to those changes with regards to digital strategy?
JS: Luxury was one of the last verticals to really embrace digital. Gucci and similar companies had a lot of hesitancy to enter the digital realm, fearing that they wouldn’t be able to do their brand justice, or that consumers wouldn’t transact as they do in-store. Today, I think Gucci is actually leading the way for luxury brands online. It recently did a site redesign, has a huge e-commerce team, and is reaping the benefits of this digital revolution.
At GHURKA, we really understand this. Digital first is a great way to connect with people who don’t have access to a wholesale or retail location. A lot of our heritage customers have really enjoyed the accessibility of GHURKA’s online presence. We’ve seen people who will come back to GHURKA after not buying something for 15 years, 20 years. Let’s say they have a GHURKA bag and the strap breaks and it’s time to buy a new bag — the fact that they can now go to our website and buy a new bag without having to go to a store to check if the item is in stock is great. For us, and for luxury in general, it gives people access to brands that they didn’t previously have access to. For example, Springfield, Missouri is a rather affluent area, but it might not be in proximity to a Gucci or Louis Vuitton store. With e-commerce, clientele in Springfield now have access to these brands, which opens up a whole new demographic for luxury brands.
AC: What would you say is the key to success in today’s retail environment?
JS: I think there are a couple keys. The first would be piquing potential customers’ interest. Referring back to previous questions, the one thing that’s very apparent is that with mobile, consumer attention span is going out the window. Consumers are able to see so much in such a small amount of time that retailers now really have to have something that catches the consumer’s eye. In the case of Instagram, it’s all about scrolling. The first thing on our brand site was that we needed to put something in our scroll feed that would catch the consumer’s eye. There’s not much that hasn’t already been done, so brands are probably not inventing new types of clothing, but if a brand can do something buzzworthy from an innovation standpoint, then that’s essentially free PR.
The second would be once you have somebody’s interest and you've converted them, you need to keep them engaged. That’s where technology comes into play with targeted ads and successful email marketing programs. If you don’t have innovative content, then there’s too much distraction keeping consumers from coming back to your brand.
Finally, the last key point is that after a prospect becomes a customer, it’s really important to ensure they remember you. Once someone chooses to make a purchase with your brand, you need to go above and beyond and pay attention to the details, right down to the packaging.
AC: What are some of the biggest challenges your team faces in implementing strategy decisions?
JS: We’re relatively small and we don’t have a large in-house technology team, so implementing a lot of new technologies and keeping up with the pace of change is challenging. It’s incredibly difficult to take things that Amazon might be doing, such as a voice-activated ordering through Alexa, because we don’t currently have the bandwidth to bring that into our business.
AC: You’ve had such a great and expansive career in retail with experience in the broader fashion category. What has it been like adapting to a specialized, niche market with GHURKA?
JS: One of the most exciting things about transitioning to GHURKA is that with a niche product, you get a very loyal following. Companies that are conducting business on a broad spectrum of products have all sorts of customers with varying levels of loyalty to the brand. The group of people who choose to buy GHURKA love us and love everything about the company. We’ve implemented a program where we’re able to capture user-generated content so that individuals can build their own mini web pages, and we can use that content on our site as well. We’ve always had a very healthy following of fans of the brand, but now we can allow them to tell their story about what’s important to them. We’ve seen a lot of engagement from that, and even some moving stories about individuals connecting offline who wouldn’t have met if not for their shared love of GHURKA.
AC: What technologies do you think will most fundamentally change your business in the future?
JS: It’s not going to be too long before virtual/artificial reality will be able to mimic an in-store experience in a digital environment. Also, it won’t be long before I tell my kids that I used to shop for clothes on a 2-D screen. There are many large companies moving this way, including Lowe's and North Face, and it’s going to be the next big innovation. Basically, you’ll be able to mimic a real person and a real physical store, which will in turn be able to provide a real product.
AC: Roughly 8 in 10 Americans are now shopping online, according to a recent study from Pew Research. That’s up from just 22 percent in 2000. Over half (51 percent) have also bought something from their mobile phone. With customers engaging with brands in new ways and on multiple devices, how can companies attract and convert customers through multiple channels?
JS: It’s important to put yourself in the customer’s shoes and understand how to communicate with them on each device. You need to be able to market to customers in different ways depending on what device they’re using. For example, on a phone, customers are typically in a more exploratory mode, so you need to find something to pique their interest. If they’re in a shopping mode, then you need to be able to convert very easily. A one-step checkout process is really important because it’s so much easier, which is why there are so many people purchasing from Amazon. Another aspect of mobile is ensuring that when customers are in an exploratory phase, they have an easy way to save or bookmark their favorite items. To sum it up, maintaining awareness of the different stages of a customer’s journey is critical.
AC: What’s next for GHURKA?
JS: We’d like to get smarter with segmentation; we want to provide a personalized experience for our customers. Many brands are struggling with this challenge in the face of large amounts of data to aggregate and digital events to coordinate. There are a lot of really solid companies doing great work in personalization now, so we plan to partner with them in order to provide better segmentation in 2018.