Introduction

On July 12–13, 2022, more than 1,700 people from the fashion, retail, retail tech and consumer innovation communities converged in New York for The Lead Innovation Summit to learn, connect and discuss what the retail world of tomorrow will look like. The Lead “bridges fashion and retail” through events and publications. The Innovation Summit featured more than 100 speakers across 40+ sessions. During the event, Coresight Research moderated a panel on livestreaming and interviewed beauty company Coty about its approach to e-commerce. We present our key insights from these sessions and more across the Innovation Summit.

The Lead Innovation Summit: Coresight Research Insights

Thinking Outside the DTC Box Marie Driscoll, Senior Analyst and Managing Director, Luxury and Retail, at Coresight Research, interviewed Christina Rapsomanikis, VP of E-Commerce and Digital, North America, at Coty, to discuss the beauty giant’s approach to e-commerce. Coty has a portfolio of 40 brands, including CoverGirl, Gucci Beauty, Lancaster and the recently launched SKKN BY KIM. Five of its brands currently have DTC (direct-to-consumer) e-commerce options on their websites. With its consumer-centric approach, Coty uses social media and its branded websites, such as CoverGirl.com, to engage with consumers and drive brand awareness and education, sending shoppers to retail partners’ websites for ordering. [caption id="attachment_151700" align="aligncenter" width="550"] Marie Driscoll from Coresight Research (left) interviewing Christina Rapsomanikis from Coty (right)
Source: Coty[/caption]   Rapsomanikis explained that one of Coty’s brand extensions, Burberry Her, saw market share gains following activation on short-video platform TikTok (see image below). She also discussed social commerce beauty app Flip, where users can purchase beauty products as well as post video reviews to earn money based on community engagement. Coty has partnered with the app via its brands CoverGirl, Sally Hansen and philosophy, exploring a new, customer-centric channel. [caption id="attachment_151702" align="aligncenter" width="700"] Slide from presentation explaining Burberry Her’s success on TikTok
Source: Coty[/caption]   As a house of beauty brands, Rapsomanikis said, “We are basically an advertising company. We know marketing and can provide content and execute in multiple channels. We are reducing channel friction with our retail partners by being selective about which of our brands have a brand.com e-commerce site—but the customer decides.” The Merits of DTC In a keynote panel, “The Direct 60: Incumbent Brands Building D2C Muscle,” Alex Baillargeoun, SVP of Digital at Authentic Brands Group, explained the metrics of building a DTC ecosystem: “DTC helped traditional wholesale brands from being commodity products and to build community by engaging with the consumer. DTC helps create loyalty and longevity.” Likewise, Justine Mohr, Chief Revenue Officer at 3.1 Philip Lim, explained that “DTC is a direct line to the customer, with direct feedback on the product and the needs of the modern luxury shopper, you don’t get that from the wholesale relationship.” Still, while DTC typically has higher merchandise margins, spending on digital marketing can destroy the DTC all-in margin. “DTC can’t win on Instagram or TikTok,” stated Heath Golden, Chief Commercial and Strategy Officer at Marquee Brands. How to Livestream Many brands looking for alternative digital customer acquisition strategies are considering livestream shopping, a blend of rapidly developing technology (streaming), live interactions, physical demonstrations and entertainment. Marie Driscoll of Coresight Research moderated a panel discussing the benefits of livestreaming, which Coresight Research views as one the fastest-growing retail channels. During the panel, Gabby Hirata, President at DVF; Andrea Moore, SVP of Digital, E-Commerce and Consumer Insights at Nest New York; and Jill Scalamandre, CEO of Beekman 1802, discussed their livestreaming strategies with Driscoll. Hirata urged retailers to make it profitable by starting small, using employees for engagement and focusing on returns. “Consistency is key, show up regularly and your audience will build” Hirata told Driscoll. She also added that DVF is lucky to have a dynamic founder, Diane Von Furstenberg, to inspire new channel exploration. While Nest New York uses special guests for product launches and online conversations, it uses its founder, Laura Slatkin, for onsite livestreaming events. According to Moore, this strategy is creating a community at Nest Fragrances that attracts new shoppers to the brand and drives engagement and return visits. Moore also explained that “at Nest we have special limited editions and gifts during the event that drive excitement and sales.” At Beekman 1802, a brand born on the Home Shopping Network (HSN), and when the pandemic occurred, the founders, Josh Kilmer-Purcell and Dr. Brent Ridge, were sent a “livestreaming playbook” so they could continue to sell from home. Livestreaming eventually became so essential that the brand added livestreaming capabilities to beekman1802.com. The company now also offers one-on-one streaming for shoppers who want skincare consultations. Scalamandre touched upon the work required to make livestreaming profitable, saying, “it takes the whole organization pulling together, many hours, emails to customers, social postings for the event.” However, Scalamandre told Driscoll that even having 80 people show up makes the work worth it, as the conversion rate is three to four times better than traditional e-commerce due to an increased halo effect and “valuable” word of mouth. Livestream shopping is quickly becoming an essential marketing tool that companies should use to directly engage with customers worldwide, in real time. Coresight Research estimates that the US livestreaming e-commerce sector will grow to $23 billion by the end of 2023. Following in the above companies’ footsteps, retailers and brands should learn to adopt livestreaming into their business model, whether it be on their own websites or via dedicated social media apps or dedicated livestreaming sites.

• For more on Coresight Research’s recommendation for brands and retailers looking to enter the livestreaming space, read our report, Playbook: Livestreaming E-Commerce.

Returning to Tried-and-True Strategies During the “New Luxury Consumer” panel, Robert Rizzolo, Chief Merchandising Officer at Marc Jacobs, stated, “There is a way to connect with the consumer that isn’t digital. We are going backwards to strategies we haven’t talked about in 10 years, neglected marketing strategies.” Specifically, he states that Gen Z love receiving catalogs in the mail. Likewise, during the panel “Need to Know Tech,” Frank Weil, Founder and CEO of Myntr, discussed using typical marketing strategies with NFTs. “NFTs don’t need to be complicated. The best marketing strategies are the simplest. Start with a good marketing strategy and engage consumers with the benefits of NFTs—prove ownership, can sell or transfer benefits of ownership and through smart contracts, NFTs are very specific with what the owner can and cannot do,” he explained. Continuing, Weil listed various ways NFTs can be used by brands, including product launches, testing products before real-world creation with digital twins and membership and loyalty rewards. “People want to feel special. If you make them feel special, they will take the actions you want them to take,” Weil advised. “[NFTs] have great instrumentality for members and loyalty rewards as you can track engagement with the NFT and provide continuous and escalating benefits by sending more digital assets to the wallet that the NFT resides in.” [caption id="attachment_151703" align="aligncenter" width="550"] Pavan Bahl and Frank Weil during the “Need to Know Tech” panel
Source: Coresight Research[/caption]   NFTs have become incredibly popular following the pandemic-fueled interest in the blockchain, metaverse and cryptocurrencies. As such, Coresight Research views them as a crucial technology for those wishing to enter the metaverse and build a presence there. Specifically, retailers with strong branding have an excellent opportunity to leverage NFTs, as they can connect NFTs to their brand story, while providing increased product interaction and customer engagement.

• For more information on the various approaches to capitalizing on the metaverse and metaverse-related technologies, including releasing products through NFTs, see Coresight Research’s report, Playbook: Strategies for Retailers To Monetize the Metaverse.

Kurt Ivey, Head of Marketing at Macerich, a real estate investment trust, did some myth-busting in the “American Mall Reimagined” session, explaining that malls are alive and well. “Covid changed everything allowing the evolution of the mall to transpire in two years, not 10. Coming out of the pandemic leasing is its highest since 2015, leasing velocity is up 22% with 99 brand new retailers attracted to the properties.” Malls have added more restaurants, medical and entertainment, electric vehicles (EV) showrooms and new and digitally native retailers, reflecting what consumers want. Macerich is actively developing properties to meet the needs of the market, and it may not be retail. Ivey finished by saying, “We are willing to do just about anything!” Supply Chain Collaboration The supply chain needs new investment, emerging technology infusion, and new modes of operating. Meanwhile, no single player has the money or capability to create an end-to-end supply chain on its own. American Eagle Outfitters’ (AEO) Chief Supply Chain Officer, Shekar Natarajan, stated that the solution is “an open and shared, scalable and sustainable supply chain model that AEO is building and asking for collaboration. Retailers and brands can leverage the assets they built and contribute into the marketplace and users can leverage the assets at economical price while providing a superior customer experience and protect mother earth.” Natarajan pointed out that just as retailers share factories, common areas in malls and parking lots, they can also share hard assets such as distribution centers, ships and trucking fleets, as well as soft assets such as forecasts, fulfillment tech, inventory science and returns tech. He urged companies to break down the “vertical pipes” and move to a horizontal network. As a result, brands could save money and cut down on their carbon footprints. Given the multitude of supply chain disruptions since the start of the Covid-19 pandemic, companies are looking for ways to evolve every link in their supply chain, from sourcing to the last mile. In addition to collaboration, there are various ways retailers and brands can create more resilient, controlled and sustainable supply chains, including digitalizing, reshoring and increasing transparency. After calculating costs and speed to market for each part of the supply chain, companies should reassess and invest in the technologies and methods they deem most effective.

• Read more of Coresight Research’s coverage of the supply chain.

[caption id="attachment_151704" align="aligncenter" width="700"] Slide explaining the benefits of brands sharing a supply chain network
Source: AEO[/caption]   Adaptive Retail—An Underserved Market Adaptive apparel, clothing made for individuals with disabilities, is an underserved market of one billion people worldwide, creating an excellent opportunity for brands to connect with a large consumer base and growing community. Mindy Scheier founded Runway of Dreams, a foundation that helps people with disabilities access the apparel they need, in response to her son, Oliver, desiring to be like every other eight-year-old and wear jeans to school, even though he has multiple sclerosis. Now, Runway of Dreams has partnered with the likes of JCPenney, Kohl’s, Target, Tommy Hilfiger and more to develop, manufacture and support adaptive apparel initiatives, including creating jeans with Velcro closings. Scheier said, “it changed [her] life when Oliver could dress himself…clothing is incredibly powerful.” This September, Runway of Dreams will participate in New York Fashion Week. During the event, 70 models with various disabilities will model adaptive clothing that looks fashionable and is designed to be taken on and off easily. Scheier urged the audience to attend the fashion show and support the inclusive market, where there are still “powerful market dynamics and it is a game changer for the wearer.” Coresight Research sees adaptive products—and increased inclusivity overall—as much more than a trend; rather, it is the beginning of a long-term change within the retail world. Companies should leverage their strengths to expand their offerings to more consumers and, in turn, become more inclusive. There are many opportunities to do so across various categories, including adaptive retail.

• For more on how retailers and brands can become more inclusive, read Coresight Research’s inclusivity coverage.

Being Green and Delivering Good Andrea Weiss, Chairman of the Board at Delivering Good, a non-profit, has a solution for the 2.5 billion tons of clothing that end up in landfills: find community partners that need the clothing. Working with over 400 retailers and brands, including IKEA and Wacoal, Delivering Good can get what is necessary to those who need it, bypassing the landfill. “Conversations that were once with the CFO about asset write-offs have moved to talks with the CMO and CSO as this behavior is a social good and sustainable. For organizations that weren’t built with a purpose driven mission, partnering with Delivering Good is a sustainable solution with which your employees and customers align” Weiss explained.