The first step in thinking differently is finding a sense of curiosity. You can’t think different if you’re not willing to learn, and you can’t learn if you lack the curiosity to do so. Brands and retailers should stop assuming they know what customers want. They don’t. But they can have the curiosity to engage with customers and ask them. Learn what they want.
The second step to thinking differently is gaining a broad set of experiences. Leonardo da Vinci was primarily interested in science and engineering. He was a reluctant artist at best. Yet it was the experience and knowledge he gained from dissecting more than 30 bodies that allowed him to paint Mona Lisa’s smile.
As a brand or retailer, you don’t necessarily have to seek outsiders with different experiences to add value to the whole. Encourage everyone in the company to pursue a life well lived. After all, a life well lived brings a bounty of rewards to everyone. No one has done well living under a rock. Equally as important to encouraging your teams to gain outside experiences, you absolutely must seek diversity of people and thought. Mix it up. There is no room for a lack of diversity by race, gender, age, and education. Likewise mix up your teams. Design should live no more in a bubble than finance.
The third step toward thinking differently is compassion. There’s an old saying that you can’t argue with stupid. Well I have come to learn that that’s a stupid thing to say. It’s not that other people are stupid. They may not have gained the comfort or capacity to appreciate steps one and two herein. Encourage them to do so. But let them do so on their terms. More likely than not though, their curiosity and experiences have provided them a different lens by which to think differently, from you. This, by the way, is where the magic happens. It’s called collaboration.
When all of us are curious, and when all of us seek different experiences, it’s leads us to the sharing of information and knowledge. You can’t grow if you don’t learn and share. Likewise your brand can’t grow if doesn’t stimulate curiosity and collaboration among many points of view from a diverse set of people who are hungry for learning and excited for experiences.
There’s a seismic difference between gross sales and net sales for a wholesale brand. It’s called discounts and allowances.
Gross sales are fake sales. They’re not real. They don’t go into your pocket. They don’t pay bills, and they’re irrelevant. Gross sales are just shipments to retail partners who aren’t going to pay you the full value of those shipments, ever. Yet many brands continue to get this dead wrong. It’s destroying a lot of businesses.
What doesn’t sell-thru, eventually comes back. Sales teams at the brand are constantly pushed to sell more stuff to more retail partners. It’s done in an effort to drive more goods into more retail stores to ultimately try to hit what are almost always unrealistic wholesale revenue targets. Buyers at the retail partners, on the other hand, don’t mind taking the goods. Why should they? If the goods don’t sell-thru or the margins don’t meet plan, the brand picks of the tab regardless–as they should. So who’s fooling who? Does anyone really think this is a good process? If a customer doesn’t buy the product, it doesn’t become a sale. If a tree falls in a forest, and we’re not there, we won’t hear it.
Net sales are real sales. They are the dollars that go into your pocket. They pay for the products you made, the talent you pay, the marketing you do, the technology you should have, and the experiences you must create. When net sales are aligned with what’s sold-thru, gross margins skyrocket. Gross margin is the money left after the goods you made are paid for. The more crap you make, the more $$ you pay. And the more $$ you pay for the goods you made to do the sales you didn’t do, the less you keep to use for those valued employees, that useful technology you could have, and those experiences you should create.
You don’t need $100 worth of goods to do $10 worth of sales. Nothing about that is reasonable. Wholesalers need to manage their channels RADICALLY better if they want to be successful. Incremental change to this effort is useless. Lower gross sales does not mean less net sales. That’s a complete and total fallacy for 99% of the wholesale brands in the fashion industry today. Quite the contrary–lower gross sales translates into higher net sales with stronger gross margins.
Focusing on net sales with high gross margins is the HABIT of high-impact brands. Driving gross sales is at odds with that effort.
Sometimes it’s good to step back and consider who’s fooling who. Brands that look to drive sales do themselves no good in the long run. It’s like saying I want to be rich. We all know that many who are rich are poor on happy.
A better way to think about building a brand is to build a base of fans who love your work. Dollars are merely a symptom of fans liking your products, message, conversation, and attentiveness.
Build fans and covet them greatly.
“No one cares how much you know, until they know how much you care about them.” –Theodore Roosevelt
If your brand is aiming to become more customer-centric, you might want to work on becoming customer-minded first—there is a difference. The former means you think ABOUT customers. The latter means you behave LIKE a customer. How does your customer see you? Are you speaking with them or talking at them? Most people don’t like to be talked at. We enjoy conversation. Dialogue. Laughter, charm, and wit… Consumers want to know that the people and brands they associate with have some interest in them.
A great place to look is your Instagram feed. Are your images of your fans? Are you speaking to them or at them? If you were the consumer, would you stand in line at Starbucks and enjoy looking at your brand’s posts while waiting for your order? Do your posts show that you care about your customer? Or do your posts show pictures of things you make and do that you think your customers may actually give two shits about? Do you care about your customers or do you care what your customers think you?
Remember, no one cares what you do or make unless they know that you care about them first.
The holiday selling season is right around the corner. What happens between now and December 25th can either make or break a brand because this period often represents more than 20% of the entire year’s selling.
Want to know how to be successful as a brand or retail of fashion products? Do this…
MAKE PEOPLE WANT YOU PRODUCTS. It’s your choice, it’s in your control, and you do that by setting your stores and channels up to TURN INVENTORY FAST. The faster you turn, the more consumers WANT your products. Forget about sales and margins–see how fast you can make your doors and channels turn.
Getting the right goods in the right locations at the right time is a brand’s ultimate endgame. Executives and leaders focusing their efforts on marketing and promotions, and not spending 2x that time using data to figure out how much of which products need to be set up and ready to go in every door across your distribution network, are going to suffer greatly. It’s what we mean by the shit hitting the fan.
It’s like this: working out in the gym and eating healthy food is awesome, but it means little if you eat too many calories. It’s also important to fuel your body with the right calories at the right time. You have to have your calories under control if you want to be healthy and active. Likewise, you have to have inventory under control and deliver it in the right amounts to the right locations at the right time.
Doing this means knowing exactly how much and which products are being distributed to what doors through your own retail stores, as well as your wholesale partners. Just because you sold a bunch of goods to a wholesale partner, doesn’t mean they know what they’re doing with it. If product doesn’t stick, it comes back and kicks you in the head. A successful brand makes sure the right amount of the right goods are going to every door and location in its entire network. Do the work.
Getting involved in marketing campaigns and product conversations are fun. Traveling around the country to see how products are displayed is important. I get it. Everybody enjoys doing that. But getting your inventory right is what’s going to make you successful or not. Fast sell-thru’s ensure high gross margins, which mean you are fit, lean, healthy, athletic and highly competitive.
There’s a lot of conversation about the things successful people or businesses do that other may not do as well. Just spend some time perusing the business leadership section or self-help books on amazon.com and you’ll find plenty of books about the subject as well. The classic traits are being innovate, authentic, creative, a leader, curious, driven, and so on. Those are all important, but I find one trait rolls all of them into one.
This is a trait I clearly remember being driven into us as a small team helping to build the Tommy Hilfiger brand in the 1990’s from $70 million to $1.5 billion. It’s something I certainly think Steve Jobs did. And if you look at Google, Facebook, and other Earth-shaking brands out there today you’ll see they do this as well. But sadly it’s a missing character from many businesses today. It clearly sets the leaders apart from the followers.
I’ve found that many brands are innovative and create products or campaigns that are interesting. I’ve met many strong leaders and I’ve certainly met a lot of driven people, but the clearest sign to me as to whether or not a person or business will be successful is one simple trait–RESPONSIVENESS. People and businesses that are responsive do really well. Those that don’t, struggle at best and fail more frequently than not.
In the simplest of terms, being responsive means you’re on top of things. You and your teams call people back immediately. Emails and texts are returned instantly. You follow-up vigorously. You seek out ideas, new talent, and opportunities. You make shit happen. Responding is numero uno!
That doesn’t mean you respond to everything from everybody. It would be maddening to filter through all the junk emails and phone solicitations. It was Steve Jobs that said “deciding what not to do is as important as knowing what to do.” But you can’t make that decision if you don’t respond to what’s out there. How would you know what’s possible?
Being responsive means that if an intriguing idea comes your way, you jump on it. If your boss, colleague, friend, or other trusted source tells you to call someone or do something, you do it. Not later. Not tomorrow. Not sometime next week when you catch your breath. Don’t put it on your to-do list. Do it right freaking now. That’s what movers and shakers do. Being responsive is a guarantee you’ll be successful.
More to the point: if you roll up all the classic traits of a successful person or business like being innovative, curious, driven, and creative, none of that can be achieved if you’re not enthusiastically responsive.
Nothing ventured, nothing gained. You have nothing to lose and everything to gain by being responsive to people, ideas, and change.