4 Takeaways From The Lead Innovation Summit
Last week, we had the opportunity to attend The Lead Innovation Summit, The Lead’s flagship event where the entire fashion and retail innovation community come together to explore what comes next for the industry. Hosted by Timo Weiland and Noah Gellman, co-founders of The Lead, the event brought together fashion and retail leaders and the technology companies that support them. Here are four of our favorite takeaways from the event.
1 | Digitally native vertical brands are favoring growth through customer communities
Many of the new digitally native vertical brands—the future disruptors—are building their brands and acquiring customers in new, less traditional ways. For many reasons, they’re no longer focusing on traditional channels like Facebook, Google, and Amazon, which are extremely costly and don’t offer them any level of control in terms of how they interact with their customers.
Instead, these brands are favoring growth through their customer communities. They’re focused on building a strong business by providing value to their customers. And they’re building trust and loyalty through great products, flawless customer service, and living and breathing their values—the same values they believe are aligned with those of their customers.
Interestingly, we heard from a venture capital (VC) company that had a unique take. When they meet new brands that are seeking investment, they ask them how they plan to acquire new customers. If the brand responds that they’re going to use the VC investment for traditional types of paid media to support customer acquisition, they turn the brand down entirely. The VC company is looking for creative and sustainable ways to build a customer community that don’t solely rely on pay-to-play strategies—what investments in traditional paid media represent.
2 | Millenials are primed to have a big impact on the future of ecommerce
There’s still so much talk about Millennials. Mostly, it seems like the discussion’s rooted in the negative. “Millennials are hard to manage in the workplace. It’s so hard to make them happy. Their priorities are misaligned.”
More than one presentation at The Lead talked about how primed Millennials are to have a large impact on the ecommerce space. Not only are some of the most notably disruptive brands built by Millennials, but they’re also driving the way ecommerce is shaped. Millennials have significant buying power yet they’re not all overspending, which is a common misconception.
One presentation (Afterpay) discussed the economic crash of 2008 and the crushing student debt many Millennials face. The combination of these two events had a big impact on how Millennials shop.
Though Millenials have disposable income, they’re more selective with it. They no longer heavily use credit cards in favor of debit cards because this gives them more control over their finances. They focus on being value-conscious. If they’re going to make a purchase—especially a big purchase—they’re going to make that purchase from a trusted source.
This generation will have a long-lasting impact on the future of ecommerce due to their expectations, their values which are unique to previous generations, and the sheer number of people who belong to this generation.
3 | Established brands are innovating through buying or building disruptor brands
With the emergence of successful digitally native vertical brands that are disrupting their industries and stealing market share from many larger brands, it’s been a wake-up call for many other brands. They’re realizing they need to innovate or they risk not resonating and losing more market share. As a result, many are going back to their strategic playbooks and seeing if it makes sense to grow by building their own disruptor brand or buying one that already exists.
Brands like Fossil, QVC, Randa, and Neiman Marcus agreed that there isn’t one answer. The decision to build or buy comes down to a brand’s overall strategy. Mergers and acquisitions (M&A) follow strategy, not the other way around.
Neiman Marcus is an excellent example of a company that innovated by investing in a company called Fashionphile, which is a brand that’s an example of recommerce—a term that was touted at the event.
“Recommerce or reverse commerce, refers to the process of selling previously owned, new, or used products, mainly electronic devices or media such as books, through physical or online distribution channels to companies or consumers willing to repair, if necessary, and reuse, recycle or resell them afterwards,” according to Wikipedia.
While the notion of Recommerce isn’t new, it was interesting to see that Neiman Marcus bought a minority stake in a brand that encourages customers to bring in their used luxury bags and upcycle them in exchange for gift cards. According to Elizabeth Allison, Senior Vice President, Neiman Marcus Group and Specialty Retail at Neiman Marcus Group, her company weighed buying vs. building. Careful analysis showed, in this case, that buying made the most sense and also had very little cannibalization of the brand’s other products.
4 | Smart brands are developing organic relationships with customers
One of our favorite sessions featured Amanda Baldwin, President of Supergoop! This SPF-focused lifestyle brand also happens to be one of our customers. The topic of the session was, “What the Modern Consumer Wants—Living in a Pull vs Push World.” In today’s fast-paced world with many distractions, how do you naturally connect with your customers and positively stand out? Amanda spoke about “meeting the customer where their moment of truth is.”
For example, when your customer is skiing in Aspen and thinks about how she’s going to protect herself from the sun reflecting off the snow, Supergoop! is there. When a mother is going to put sun protection on her baby for the first time ever, Supergoop! is there.
Organically appearing where and when your customer needs you is pivotal to establishing awareness, usage, trust, and loyalty. This insight was inspiring as it served as a good reminder of how relationships are built, and that top brands follow the same mantra.
The thought leaders who presented, the topics that were discussed, and the networking opportunities made this fashion and retail event one worth attending. We enjoyed learning about upcoming trends and growth drivers from titans of industry and also from the budding entrepreneurs who are just starting out. There was something for everyone in these jam-packed two days and the event definitely exceeded our expectations. It was also exciting to see that, of the top 50 disruptor brands mentioned, about 20 percent were our customers. We’re proud of how these brands have grown and it was great to see them recognized publicly for their success.
Learn more about the fast-growing disruptive brands Klaviyo works with and their stories.
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