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Retail Brew

Jeena Sharma

retailbrew.com

Lingerie model siting in a large queen of hearts card

What Playboy wants to look like for the Gen Z consumer

With a new Valentine's Day collection, the brand once known for its racy photographs and imagery continues to reinvent itself for Gen Z.

What Playboy wants to look like for the Gen Z consumer (hint: not a magazine)

Four people in conversation onstage at NRF

Key takeaways from NRF’s purpose-driven retail panel

Conscious capitalism isn’t just ‘Kumbaya.’ [It’s] ‘Let’s make a profit, and let’s do something good for your people, the community in the causes that you are concerned with,’” Chobani’s Mark Broadhurst said.

The key takeaways from NRF’s purpose-driven retail panel

Erin Cabrey

Unilever uses AI to improve products

It's optimizing its offerings from vegan lipstick to microbiome-protecting skincare

How Unilever is using AI to improve its products

Strategy

Phil Wahba

Fortune

A tote bag from McNally Jackson, a beloved local bookstore chain, hangs on a chair in Barnes & Noble CEO James Daunt’s New York City office. When pointed out to Daunt, he doesn’t get defensive that there’s evidence he’s buying books from a rival—quite the opposite. Daunt confesses he enjoys shopping there, and that, indeed, small booksellers have much to teach Barnes & Noble about enticing readers as the big-box chain pursues a turnaround.

Daunt himself owns a namesake chain of nine local bookstores in Britain. Before taking the reins at Barnes & Noble in 2019, after its purchase by activist investor Elliott Management, he had pulled off a dramatic turnaround at Waterstones, a prominent British bookstore chain teetering on the brink of obsoletion.

Daunt’s approach to fixing Barnes & Noble rests on running the 614-store chain more like a series of regional bookstores than a single national behemoth with centralized decision-making, with each store responsive to what local readers want. Store managers have the discretion to determine what titles to carry, how to present them in stores, and how to motivate staff.

Today, the company is the last large bookstore chain standing in the U.S., years after Borders and Waldenbooks folded. But when Daunt, 60, took over the company, he found a downward-spiraling Barnes & Noble and dumpy stores thanks to poor upkeep and years of 

too much wasted capital on tech products that didn’t bear fruit

 dominated the digital marketplace, many booksellers—the very reason to go to Barnes & Noble over Amazon—lost their jobs or saw their hours cut, depriving customers of the interactions that make a bookstore appealing.

The problem with Barnes & Noble’s previous turnaround attempts, Daunt says, is that leaders were rooted in basic big-box retail tenets, which tend to prioritize homogeneity across chains and cost-cutting, rather than focusing on bookselling.

While Barnes & Noble is privately held and, as such, does not disclose financial results, the retailer appears to be playing offense again. The bookseller, which closed hundreds of stores in the 2010s, plans on opening 50 stores this year, albeit many of them much smaller than traditional Barnes & Noble locations. Under Daunt, Barnes & Noble has also remodeled many stores—installing modular shelving, improving lighting, and reorganizing how books are presented.

This article has been edited and condensed for clarity.

: From a 30,000-foot view, why do you think the once moribund Barnes & Noble is turning itself around?

The focus got back to the people who sell books. Barnes & Noble had brought in a lot of professional retailers, but professional retailers don’t make very good booksellers. If you apply many of those retail principles to selling books, things tend to go wrong. In many areas of retail, they just kill customer service. We now have people focused on servicing the stores and are empowering employees themselves to do what they regard as best. That combination is powerful, and it moves things, but it does so slowly.

By decentralizing store operations, don’t you risk losing some of the benefits of Barnes & Noble’s scale?

A business needs to allow very different stores to evolve in different places. And we are now opening new stores of increasingly varied sizes. You can’t run the Upper East Side 6,000-square-foot store the same way you do a 24,000-square-foot store in New Jersey. The principles that underpin running them are still the same: Books are attractively and intelligently presented in what is predominantly a bookstore; getting the right books for your customers; and making sure customers are your focus. That means giving your booksellers freedom that allows them frankly to have more fun.

How have you made their jobs more enjoyable and, by extension, more effective?

You have to dismantle what has traditionally been an extremely hierarchical structure to equip each store to run better. There were few career opportunities because of the hierarchy, so if you had ambitions, you’d look elsewhere. We’ve also put our stores in clusters of four or five, and within those, we’ve tried to develop talent for that entire cluster, not just a single store. For example, we might hire someone with a knack for visual merchandising or putting on events who can help multiple stores.

We have to make shopping as easy as possible and train our booksellers to be as friendly as possible. We train people to just say yes to customer requests, which is not very complicated. Most of the time, the answer is yes unless a customer is trying to steal from me. That empowerment is still the thing we’re trying to push through because managers say no. Just do it.

Many predicted that e-books would continue outpacing physical books and become the dominant format. Why hasn’t that happened?

I was obviously a bookseller who had just taken over when Waterstones was in big trouble, and the explosion of the [Amazon] Kindle happened. But what I believed then and still think is self-evidently true is that a physical book is a lovely thing and a particularly pleasurable way to read. But e-reading and audiobooks are also right in different circumstances. It’s not a zero-sum game. Same for bookstores. If I open up a bookstore and McNally opens a bookstore, we’re not going to simply share a fixed pot between us. The more bookstores there are, the more people will be in them and buying books.

As an indie bookstore operator, I get that you have a much smaller physical space, and they tend to be more intellectually elevated. But Barnes & Noble has books for everyone. I think we can coexist. Just as I had no problem with Kindle coming out, I don’t have a problem with independent booksellers doing well. They do something very different and very valuable in society.

 Barnes & Noble’s e-commerce is underperforming at 9% of your sales. What are you doing to fix this?

The company never invested in e-commerce, so we’re sitting on a platform from years ago that has to be replaced. We will get there slowly, but there is a method to the logic and the pace. We first need to overhaul our membership program. If you have a good website tied to a very active and properly cared-for membership program, you can be extremely successful.

A few years ago, there were fads like adult comic books or Adele’s vinyl records to give Barnes & Noble an unexpected sales lift. What is doing that now for the company, and what categories have surprising resilience?

. It’s not just vinyl; it’s CDs and DVDs, too, that are selling. For CDs, I have to say, I was proved wrong. Some of our guys were saying, “We’ve got to keep the CDs.” (They did.) We are also the last retailer standing that has a really thorough and good magazine proposition. Same for toys and educational products. We are a major 

 retailer. Pokémon. We have enthusiasts in all these categories, and it all fits well together. 

There’s concern over book banning in some states. Where does Barnes & Noble land in this debate?

We strongly believe that books should be available to all, but we try to remove anything objectionable, such as racist content. I think our booksellers understand where our customers are inclined to object, but they also know that storms are whipped up on social media all the time.

Barnes & Noble CEO says retailer is expanding again thanks to Taylor Swift, Legos, and a return to bookselling roots

Black Friday 2023 Embed

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Black Friday 2023: Data Trends & Insights

Lovesac, known for its large, foamy beanbag chairs, is elevating its super comfy set of offerings by adding nearly 25,000 crystals to at least some of them for its 25th anniversary. Yep, 25,000!

The furniture company struck up a collaboration with Swarovski, which gets the credit for the shiny crystals that come embedded on a limited-edition set of one Squattoman and one MovieSac. The 25 sacs (we told you they were limited) are currently available both online and in stores for a whopping $10,000.

While a handful of the bedazzled beanbags have already been sold, more are up for grabs (while supplies last) for the remainder of Lovesac’s 25th year. “It really is a collectors’ item, and something—who knows?— 25 years from now [that] might be quite valuable,” Shawn Nelson, Lovesac CEO and founder, told Retail Brew.

The brand has been in talks with Swarovski for a couple of years, and each Swarovski studded product was months in the making. In an exclusive chat with Retail Brew, Nelson spills the crystals…um, tea…on how the partnership came together and who the brand is targeting.

This interview has been lightly edited for length and clarity.

How did this collaboration come together?

The first mandate is it has to be comfortable, it has to be useful—not just a sack layered with stones—but still suitable. It’s a lot of fun to sit in a Swarovski Sac. The typical behavior when you sit down in a Lovesac is to hopefully kick up your feet. In this case, on a Swarovski-studded Squattoman and, but also kind of rub your hands on the sides of the sack. It’s just natural to do that. And there you’ll find a million crystals. And it’s just such a cool tactile experience, still washable, still maintainable, still useful. It’s not meant to just be obviously a decoration.

We specifically collaborated with them to identify the right fabric where we felt confident that the crystals would stay fast and not accidentally be somehow brushed off or deteriorate. We’ve achieved that; to come up with something that’s equally comfortable, useful, and of course, ridiculously cool, dripping with Swarovski crystals was something that we’re very proud of.

We went back and forth with Swarovski for four or five months, and then, doing trial and error with different fabrics, and different designs. We’ve had a few different designs, some radically different than the one you’re looking at. But we feel really good about the final output. To see it under the lights at the event was a lot of fun, each one of them is signed, and numbered by me personally, on the back of the logo. They’re truly collectors’ items that we hope over time might punch above their weight in terms of the value, because there will never be another one like it ever again.

The manufacturing itself, I had to go back and forth between our shop and Swarovski to get it done, and the labels [were] signed individually after being Swarovski studded. It’s been a back and forth process—very involved, much more involved than your typical Lovesac production.

Who are you selling these super expensive Sacs to? Who is the customer?

Clearly, we don’t expect to sell a large volume of Swarovski Sacs. But therein lies the intrigue. We’ve never put out a Sac this expensive, and look, it’s for the true collector: whether it be sneakerheads, who pay way too much for a pair of shoes because of what it means or the limited-edition nature of it; whether it be celebrities, high earners who are interested in having only the best—these are the customers that might be interested in something as ridiculous as Swarovski Limited Edition 25th anniversary Sac.

It speaks to the breadth and the livability of our brand. Lovesac is often misinterpreted as a luxury brand. We love that association. We’d love to be associated with high quality, high end, but we were a meat-and-potatoes brand, really. When it comes down to it, our customer is America; enjoying their life at home with their family, with their partners, whatever their lifestyle is—it’s a very diverse customer base. We are grateful to them for their investment. They’re investing in something that’s going to be within their whole life…Hopefully, it also says to our core customer who may not afford the Swarovski Sac that we’re going to be here for the next 25; your lifetime warranty for your sac, for your sectionals we sell you is totally valid here. That’s the underlying message that we don’t say overtly, but we hope that our core customers have the ears to hear.

Why Lovesac and Swarovski made a $10,000 beanbag chair

In an exclusive chat with Retail Brew, CEO and founder Shawn Nelson talks about the collaboration with Swarovski and Lovesac’s core customer.

Lovesac’s CEO wants you to lounge in a $10,000 beanbag chair studded with 25,000 Swarovski crystals

Katishi Maake

Overstock.com was founded in 1999 right after the dotcom bubble earlier that decade, which gave the site the opportunity to sell off failed companies’ merchandise at a discount.

More than 20 years later, the company has pivoted to selling furniture and home furnishings, as competition across the e-commerce landscape has vastly expanded. Three and a half years ago, the evolution began when CEO Jonathan Johnson helped pinpoint the types of customers that fit with Overstock’s new vision, and then made it a reality.

For six quarters, the company did away with its non-home products, which represented only 20% of Overstock’s revenue, Johnson said.

During that time, Overstock doubled the number of home and home furnishing SKUs it carried on its site.

The company realized prior to its transition that customers who purchased home products came to the site more frequently, converted at a higher rate, and had a larger average order value than those who came for non-home items.

“People who were buying health and beauty, apparel, jewelry, watches, and electronics didn’t have the same loyalty and were much more one-and-done customers,” Johnson told Retail Brew. “So it’s because we’ve focused on who we are, we’ve also become better at who we are.”

It’s been a year since the company completed its transition, and it has identified two kinds of customers it wants to target moving forward.

The first are those Johnson described as the “savvy shopper” who wants the best value for the best product available.

The second customer segment is the “reluctant refresher”—someone who may not be as deal conscious as the savvy shoppers, wants to be able to find a product easily, and wants an easy return experience post-purchase.

Under those two segments, Overstock is bringing another customer into the fold—former Bed Bath & Beyond shoppers. But targeting these shoppers didn’t start with the company’s 

 in April, it actually dates back to last year.

Johnson explained that Overstock isn’t an everyday-low-price retailer but rather a “high-low” retailer—one that competes for customers through sales, promotions, and coupons, a strategy similar to that of Bed Bath & Beyond.

So last year, when some of Bed Bath & Beyond’s struggles became more apparent, Overstock started carrying small appliances and giftable products that were carried at Bed Bath & Beyond, including Mr. Coffee, Keurig, KitchenAid, and Dyson.

“We really felt like we took market share from Bed Bath & Beyond in the second half of last year and in the first quarter of this year by focusing on products that their customers want and need, and then continuing to be a smart value high-low retailer that speaks to the Bed Bath & Beyond customer,” Johnson said.

Overstock still has a lot of work to do in the coming months and years for the pivot to stick. In Q1, company revenue 

 $381 million, a decrease of 29% YoY. The company also had 4.8 million active customers by the end of quarter, a 35% YoY decrease.

Johnson said Overstock has recently launched a co-branded credit card with Citi retail services, made updates to its mobile app, and will improve its private-label credit card to bring new customers into the fold.

“I think this goes to event-tizing and really finding a way to get people to see they’re getting the best deal,” he said. “People are willing to spend when they know the deal is there.”

Overstock’s pivot from liquidator to furniture retailer 

Part of Overstock’s strategy has been luring Bed Bath & Beyond customers.

A peek into Overstock’s pivot from liquidator to furniture retailer 

 in 2019, has been a major challenge for CEO Winnie Park, as we recently 

While a big part of Park’s efforts have involved targeting Gen Z and tapping into the brand’s core millennial consumer, as Park previously told us, another aspect of it has been reinvesting in brick-and-mortar stores and integrating sustainability while keeping costs low.

In speaking with Retail Brew, Park broke it all down.

This interview has been edited for length and clarity.

How are you revamping the physical stores for this new era at Forever 21?

The physical presence of the store really was about very large stores, where you fill them up with product and for us, you need to help the customer really navigate through storytelling. For instance, we’ve converted all the front of stores into what’s called a Now Trending Pad. And we like the term “now trending,” because it really is about your social feed. You want to look at what’s trending, and bring that experience to the front of the store in a physical format. And that Now Trending Pad literally turns every two weeks—the newest trend, the hottest looks, we drop it in, it evaporates, we move on to the next thing. It’s 360-degree storytelling where it’s not just ready to wear, but if it’s a festival moment, we’re going to have the amazing accessories, cosmetics, makeup, and color looks. We’re going to have amazing footwear to kind of dress you head to toe and engage one experience. So that’s one of the big changes. 

The other piece is as you navigate the store, just making more than storytelling and making more of the occasions clear. So you should be able to walk in our stores today and say, “I’m looking for something for my first job interview. Where can I find great pieces to wear to work?” versus “I’m hanging out for a casual brunch with my friends on the weekend,” versus “I literally am just going to the gym, and I want to look cute.” So how do we create, for all intents and purposes, the departments who are the future, and help the customer navigate that journey. All the stories we tell in the store, we reflect online as well. It should be a seamless journey.

What is your bigger focus: the physical store or online?

[It’s about] how you create this ecosystem where a customer sees the connectivity between the story you’re trying to tell and allows them to engage in it so that there will be no difference between the channels in the way we show up for the customer. We think that consistency is key to our success.

In pursuing sustainability, how do you keep the costs affordable?

The big thing for us is picking our spots, and also leveraging scale. One of the big initiatives within Forever 21 is: How do you basically have certain fabrics that we build styles into, and we can keep the costs down? Because we’re building so much into those base fabrics, it’s really being smart about our design, merchandising, and our sourcing strategies. I’ll use the example of recycled denim. We’ve taken steps where we started with women’s fashion denim. Let’s go ahead and put recycled in and let’s see how far we can push the prices. Talk to our customers about this. Let’s see if there's a reaction. As we’ve seen success, we see the opportunity to broaden that and build more volume into that fabric and build more styles into that fabric.

Forever 21 CEO Winnie Park on physical stores and sustainability 

“All the stories we tell in the store, we reflect online as well. It should be a seamless journey,” Park told Retail Brew.

Forever 21 CEO Winnie Park talks physical stores and sustainability 

 in 2019 can be blamed on a number of factors, but a couple stand out—namely, its overestimation of the number of physical stores it needed (200 of which were eventually 

 by the brand’s new owners) and its loss of relevance among its core audience.

 by research firm Ypulse found that perception of Forever 21 among consumers aged 13–30 had dipped by 13%.

So, naturally, when Forever 21’s current CEO, Winnie Park, who is leading the brand’s restructuring, 

 the company in January 2022, she knew she had a tough job ahead: overhauling a fast fashion brand after a public bankruptcy in a climate where concerns around sustainability in fashion abound, as well as bringing back young shoppers to Forever 21’s stores.

But the former Paper Source CEO has stepped into her role with decades of experience behind her, including nine years spent at LVMH-owned luxury retailer DFS, and leading women’s merchandising at Levi Strauss-owned Dockers.

Under Park, the brand has been focused on reopening brick-and-mortar locations with more personalized and curated experiences for younger shoppers and growing the brand’s TikTok presence.

In an exclusive chat with Retail Brew, she tells us how she’s reinventing the brand for Gen Z.

What is your key focus in terms of Forever 21’s overhaul?

 Gen Z, in particular, uses fashion as a means of self-expression. They’re really not going to have a brand label them, and they don’t ascribe to a group…You may wake up wanting to wear Y2K fashion and end the day wearing goth [attire]. What we want to do at Forever 21 is provide that full spectrum and palette of different looks and trends so that they can address the various moods and occasions that are relevant in their lives. So that focus on Gen Z has also led us to be much more cognizant and tune in to cultural moments and cultural zeitgeist.

For instance, we know that media and music is super important to them. We kicked off this year with an amazing partnership with Rolling Loud, which is the largest hip-hop festival in the world. Acknowledging that hip-hop is super important to the culture, is super important to this customer…For us, it is about constant waves, and we call it a rolling thunder of engagement and news so that we can activate the community, not just have great products out there.

How are you connecting with this new Gen Z consumer?

 We’ve discovered Gen Z is an omni-channel generation, not just in terms of shopping preference, because they will often browse and get product news on social media. For them, TikTok is a bit more relevant than Instagram, but Instagram is still up there. That’s kind of like their window to the world. You need to be able to then extend that window into the site, the app experience. 

For us, storytelling has been really big. You may start with a story on TikTok that really focuses on festival looks, but unless you weave that all the way through to how that story shows up when you’re shopping the site, it falls dead. That same story needs to pop up in stores, and our Gen Z customers actually love stores. Gen Z embraces the notion of going into a store [and] looking, feeling, touching, and engaging with the product. That omni-channel ecosystem of how we touch them goes beyond just commerce channels, and goes into marketing, social engagement, and activation.

And how are you bringing your core consumer—i.e., millennials—back to the brand?

 We are trying really hard in terms of partnering again. It’s too easy just to go to an influencer. It’s [about] what influences millennials in life beyond human beings, right? What are the cultural moments they care about? We’ve got this great opportunity right now to invite some customers back to say, “Take a second look at us. We’ve got things for you.” It’s talking to them about the breadth and range of styles, the value in the product, even talking about things like size, scale, and expansion of size ranges, [and] the democratic approach that we take to fashion—everyone should be able to wear this regardless of size.

Editor’s note 6/15/23: This story has been updated since its original posting.

Authentic Brands, parent of Forever 21, files to go public

Forever 21 CEO Winnie Park on reinventing the brand

“We call it a rolling thunder of engagement and news so that we can activate the community, not just have great products out there,” she told Retail Brew.

Forever 21 CEO Winnie Park on reinventing the brand for Gen Z and millennials 

After much consideration, Adidas CEO Bjørn Gulden announced last week the retailer will 

 some of the unsold stock from its partnership with Yeezy (a fashion collaboration with Ye, formerly known as Kanye West) and donate the proceeds, adding that “burning the goods would not be a solution.”

 about what would happen to the $1.3 billion worth of unsold shoes and apparel that remained as a result of Adidas’s falling out with Yeezy in 2022 in light of Ye’s antisemitic remarks.

 a loss of $540 million in the final quarter of 2022 due to the failure of its partnership with Ye, but Gulden seems optimistic about finding a solution, though it could be tricky.

For instance, even if Adidas is able to sell some of its Yeezy stock, it is likely that Ye would be entitled to commissions, Reuters 

Gulden, a former pro soccer player, joined Adidas in January with a plan to 

 on American sports, such as basketball and soccer, in an effort to boost business. Sales of the brand’s sportswear and equipment 

 last year, while its fashion sales declined.

Adidas has since moved its basketball product team into a new facility in Los Angeles and also plans on new partnerships with athletes and with Major League Soccer.

Beyond sports, the brand is forging partnerships with the aim of attracting younger consumers (Gen Z, of course), such as its 

“Another way for [Adidas] to think about partnerships is, ‘How are we going to tap into the unexpected, the random?’” Hannah Hickman, partner and head of the youth culture practice at consulting firm Sparks & Honey, 

. “I think we’re in an era of celeb brand matchups that is yielding a lot of excitement from Gen Z.”—