Customer centricity "makes us change the way we work, instead of limiting the way she shops." The U.S. luxury lifestyle brand's CMO and global retail chief dish on how the company came to quickly dominate.
CHICAGO—If you're unfamiliar with the U.S. luxury lifestyle brand Tory Burch, you won't be for much longer.
The company has seen explosive growth since its launch in 2004, and now ships its particular style—in its own words, "an attainable, luxury, lifestyle brand defined by classic American sportswear with an eclectic sensibility;" in ours, the go-to place for ballet flats for well-heeled women—to more than 30 countries, thanks to a dead-serious e-commerce strategy.
As the company prepares for its 10th anniversary, chief marketing officer Miki Berardelli and senior vice president of global stores Matt Marcotte came here, to the annual Shop.org Summit, to dish on what makes the company—a darling among retailers—tick.
The answer was surprisingly simple: serve the customer.
"We share a fundamental belief about customer centricity," said Marcotte, the former managing director of Apple's North American retail operations. "It's something we think about every single day."
Sure, plenty of businesses play lip service to this notion, but during the pair's keynote this morning, it was quite clear that Tory Burch is walking the walk and not just talking the talk. Though the company has a brand presence in the Americas, Europe, Middle East and Asia, with almost 100 physical stores in 15 countries, the real action is online, where it has native online stores for seven countries and the ability to ship to 31 more.
"We do all of this on a global, scalable platform," Berardelli said. "Multi-currency, multilingual."
Not bad for such a young brand. Then again, that relative youth was an asset when it came to dealing with legacy technology and organizational silos.
"We started e-commerce immediately after we opened our first store, in 2004," Berardelli said. "We as a brand have never experienced a pre-e-commerce world."
It starts with employees
To get its digital ducks in a row, Tory Burch (the company, not the founder) started by looking at its own corporate organization. Typically, the silos between retail channels—brick-and-mortar, online and wholesale—create incentives that can work against the customer experience.
So if a customer standing in a physical store prefers to order a product from the website instead—thus depriving a salesperson of their commission and the brick-and-mortar group from a sale, which would be logged in the online column instead—they may find that the associate they're working with is less than enthusiastic about the idea.
That's not the case at Tory Burch, Marcotte said.
"We have to ask ourselves every single day: how do we tap into that passion, fuel that passion, and further it [so a customer continues with the brand?] Everyone talks about these ideas, but if we aren't talking as an organization—if everyone isn't completely passionate about the customer—then we won't make the right decisions. If we are, it frees us to make the right decisions. That makes us change the way we work, instead of limiting the way [a customer] shops.
"We don't care which channel. We are channel-agnostic. We care when the customer wins."
By keeping the silos from creating destructive internal incentives across its sales channels, Tory Burch has effectively created "three new, full-price stores, volume-wise, just by serving customer," Marcotte said.
Stop thinking about social ROI and just do it
If you really want to put a focus on the customer experience, you need to have the brand itself embody it. Berardelli said that she considers Tory Burch to be an "O.P.E.N." brand—on-demand, personal, engaged, networked—which "means taking the customer along on a journey."
That's no more apparent than in the company's social media outreach, a comprehensive effort that befits a lifestyle brand. Tory Burch is active on virtually every major social media platform, and each one has a different strategy, thanks to the company's internal "Social Media Matrix" that assigns each channel a team responsible and a strategy that plays into the grander one for the brand as a whole.
On Twitter, the founder herself is actually responsible for tweeting. "We think of it as the new focus group for today's CEO," Berardelli said. Similarly, Instagram "is Tory's lens," offering photos of family and friends, Berardelli said.
In contrast, Facebook "is the voice of the brand" and the team behind it. Still, that doesn't mean its communications are stiff.
"The way we think of these platforms is different than how we think of our core marketing material," Berardelli said. "We share our favorite ice cream flavors; our customer is cheering us on and telling us what her favorite ice cream flavor is, too."
Plus, Tory Burch has an exclusive Facebook shop that puts exclusive, fan-only products up for sale.
"Our Facebook follower has an expectation that she will receive something of value for following us," Berardelli said. And it helps that the average Tory Burch Facebook fan is younger than the brand's average customer. "We see Facebook and our Facebook shop as an important customer acquisition vehicle," she said.
As for the social network Pinterest—a favorite among apparel companies, for obvious reasons—the Tory Burch approach is to constantly feed it with pieces of content so that a customer "is taking images of site and brand and spreading them around."
That brand-building mentality carries over to Weibo, the Chinese microblogging service that's much like Twitter. Because Tory Burch has four stores in Hong Hong, the company's efforts are "primarily about brand-building and supporting store openings," since a native online store doesn't yet exist for the company in that country, but four Hong Kong brick-and-mortar stores do.
"China is a very important part of our strategy," Berardelli said.
For all of these social channels, "it's a never-ending process of watching what's happening in the landscape and figuring out what's [right] for your brand and evolving," Berardelli said. "We treat every platform differently and we create unique content for each platform. It's a lot more work, but it's a lot more fun, and we believe it's a lot more effective."
But what about return on investment? That's always the question when it comes to social media outreach efforts. Berardelli said it goes back to the goals for the brand as a whole.
"We do have a mindset that there are things we do from a marketing and social media perspective that are just the right things to do for our brand," she said. "The biggest aspect is just the people, the staffing around it. We're very focused on building a community that's truly engaged. We don't want followers for followers' sake."
The effect of digital on brick and mortar
One of the more interesting efforts Tory Burch is undertaking is an attempt to allow data-driven personalization technology bleed into its brick-and-mortar stores.
With a tool it calls "Clientbook"—accessible through a tablet computer—the company's store associates are able to pull or augment insights from the company's customer relations management, or CRM, database in an attempt to better hone in on which products would be most appropriate for a customer. It's a similar approach to the one that luxury retailer Burberry demonstrated at SAP's Sapphire Now conference in 2012.
"It was built with the customer and employee in mind as the end user," Marcotte said. "There's nothing worse than tricky technology, because no one uses it, because no one's thought about how someone uses it."
The idea is to "enable a human connection," much in the way that Facebook prompts people to say "Happy birthday" to their friends. Even though everyone knows that Facebook's birthday reminder module "is part of a program," it still results in a human connection that people value, Marcotte said.
For Clientbook, that means that a sales associate is prompted to send a customer a birthday card days in advance, so it can arrive on time via the post.
"It helps us to build our business in a transformational way," he said.
Berardelli offered another example. She said, paraphrased:
In one case, a married man came into one of our stores, asking for assistance from a store associate. He wanted to purchase a gift for his wife. He explained that he didn't know where to turn, but saw the company's logo on his wife's shoes and assumed that she shopped at the store, so he came. The associate looked up his wife's name in Clientbook; turns out she's shopped at Tory Burch both in person and online. Anything she bought in the last two years showed up, with photographs. So the associate made suggestions and he goes off happy. The wife comes in the next day and asks to see sales associate. That's never good—usually it means that something's gone wrong. The woman says, "I don't know what you did, but it's the first time in 20 years he's ever gotten in right." So the associate shows her Clientbook. No return necessary; the husband is a rock star. She leaves. Three hours later, her friend comes in. Turns out the wife was talking about Clientbook at lunch and she just had to know what it was all about.
"Everyone's happy," Marcotte said. "This is the kind of technology that we want to enable an authentic relationship between our customer and our brand."
What goes around, comes around
The big question, of course, is simple: is all this customer stuff working?
The retailer can certainly look at its sales as a very rough (albeit critical) barometer, but it has better proven its dividends with a lofty Net Promoter Score, a metric that measures customer brand loyalty. Because the rating system measures how well a customer recommends a given brand to friends, family and coworkers, it's key for a lifestyle company that needs to be as much a friend as a fashion source.
"The days of satisfaction are really kind of gone," Marcotte said, explaining that 80 percent of people who are "satisfied" defect to other brands anyway. "Satisfaction isn't enough. Being OK with an experience is not enough. We want people to be passionate."
So the company has turned to NPS for detailed data it can place in a feedback loop for its employees.
"It's the voice of the customer," Marcotte said. "We get to hear every single day, in every single store, how we're doing from people who have shopped with us. And it goes right to the store manager," who has 24 hours to make an issue right again. "We want to bring them back to a place where they are comfortable with Tory Burch again," he said.
And because the score is balanced, the brand receives positive feedback, too. That helps boost employee morale, ensuring they're on the same page with customers.
"It gives us that macro feedback to make sure that the customer is still sitting at the center of the table," a sort-of gut check to make sure its actions still align with the goals for the brand, Marcotte said.
Which feeds into employee training, business processes, sales and ultimately, a business that's sustainable and healthy over the long term.
"If we listen to our customer," Berardelli said, "she will actually help us be a better brand and make a difference in the world."