Month: December 2020

Over the course of his two-decade plus career, he witnessed first hand the digital transformation build and then rapidly sweep through the publishing industry — taking legacy business, behaviors and colleagues unable or unwilling to adapt along with it.

He’s also witnessed the craft of sales turn from being relationship based — meeting and bonding with clients in person; high touch and exhilarating, with deals struck with a handshake, or a bourbon — to transactional, automated and void of creative human negotiation, too often conducted with marketing managers and media buyers more than half his age.

And the coronavirus has made selling even more difficult. Yes, there is less money in the market, but his outreach to clients via Zoom has been a hollow exercise and says he’s counting the days to have face-to-face meetings again, to travel again, to wear a suit again — to close really big deals again.

For this special Endgames edition of our Confessions series, in which we trade anonymity for candor, we spoke with a veteran ads sales executive on the transforming craft of sales and how to stay a step or two ahead of “the guy with the axe.”

This conversation has been edited and condensed for clarity.

During your career, what has been the most foundational change sales executives have had to deal with in order to stay competitive and relative?

If you’d asked me 10 years ago, I’d say that navigating the transition from print to digital would keep you in the game. That’s clearly not the case now.  To stay competitive and relevant, a media rep must master any number of skills from search to content marketing to event marketing to social to name just a few – all while understanding his customer’s business.  Additionally, if you’re going to stay one step ahead of the guy with the axe, you need to know where your company and the industry is headed and obtain the skills necessary to market yourself in a constantly changing environment.

How has the craft of selling changed? Is the salesperson still relevant?

If you’re planning a digital campaign for Tide, then perhaps not.  Then again, I’m not sure the media buyer is necessary either in that case.  There are any number of relatively intuitive DIY dashboards that can place that buy for you. B-to-B campaigns are a different story, and I believe that salespeople are highly relevant to that equation — provided they bring industry knowledge and creative solutions to the table.  Whenever editorial environment matters, and behavior targeting can’t get the job done, a good salesperson is a crucial part of the equation.

In this present environment, can sales execs be nimble, creative, entrepreneurial?

I would say that those qualities are crucial for any sales exec to possess even before the pandemic.  In a way, media sales execs were well prepared for the constant state of flux and uncertainty that Covid-19 has created, as that’s been the state of our industry for a decade or more.  Working at a “Newspaper of Record” in my early career, I found that creativity was unnecessary and “no” was a word I frequently said to my clients.  The dynamic has shifted and the buyers have had the leverage for quite some time now.  “No” is not an option. If a client wants a solution you don’t offer, you need to build it for them.

What do you miss most about pre-pandemic selling? 

Any salesperson will tell you that face-to-face meetings are what we miss most. They are when we are at our most effective. We get a better understanding of the client’s needs. We can effectively communicate our capabilities and appropriate solutions. We can build trust and relationships — and we get out of the office! Ironically even before the pandemic, getting an agency meeting was getting more and more difficult, while in the B2B space getting a client meeting was relatively easy.  I am concerned that the effectiveness of the Zoom call may make this a more permanent trend.

Allison Samek, Fred Segal’s president, said the company’s namesake founder had intended for the flagship L.A. store to be a “daytime nightclub” at the core of the business, so events like film festivals and Friday happy hours made sense.

But by March of 2020, as the spread of coronavirus ushered in a pandemic, the 59-year-old retailer began thinking more about convenience. Samek accelerated the company’s digital growth plans, resulting in a revamped website featuring hundreds of additional products and expedited shipping options, including through Postmates. It also launched curbside pickup and an online concierge service, as well as a weekly virtual shopping event called Fred Segal Live. As a result, its site e-commerce has seen 200% sales growth year-over-year.

“Pre-Covid, it was hard not to have a great time in our stores; our customers, employees and the environment simply ‘vibe,’” said Samek. “Covid changed much of what we can do.”

2020 was a tough year for U.S.-based concept stores. In April, less than two years after opening, New York’s 10 Corso Como store closed its doors. In addition to a restaurant and cafe, it featured an art gallery and bookshop. Founder Carla Sozzani, whose original, Milan-based location has been open for nearly 30 years, described the store as a “bazaar.“

Three months later, Neiman Marcus announced plans to close its store in NYC’s Hudson Yards shopping center, which opened in March 2019. Touted by the company as “retail theater,” the store featured a beauty salon and spa, a pop-up florist, three restaurants, and a kitchen offering cooking demonstrations, tastings and mixology classes.

Also in July, Brooklyn-based Kinfolk announced in an Instagram post that it was permanently closing. The store-cafe-nightclub, which was in business for 12 years, was described by the New York Times in 2014 as a “cultural hub.”

It’s not hard to see why the spread of a not-yet-curable disease would make the store-as-cultural-hub less appealing. But with fashion shoppers looking to their phones for inspiration and discovery, stores are now upping their game in other ways, focusing instead on ways they can deepen the relationships they have with their customers.

“If you’re going to leave your house and you’re going to go to a store, it’s about your experience, the customer service and being treated like a queen,” said Stacy Igel, founder and creative director of contemporary streetwear brand Boy Meets Girl, agreed. Since 2001, she’s sold her brand in retailers from Colette to Macy’s.

Igel said the Colette model of offering constant newness is what shoppers want in a physical shopping experience, but moving forward, they’re going to get it from pop-ups rather than look for it in permanent stores.

Elyse Walker, who opened her first multi-brand store in L.A.’s Pacific Palisades neighborhood in 1999, has remained laser-focused on her fashion offering, including maintaining a distinct point of view in the assortment — sexy, edgy, confident — and providing hands-on styling services to customers. She considered making room for a cafe in the company’s Newport Beach store, but decided it wasn’t worth the investment.

“If the store model is confusing to the client, they’re not going to take to it,” she said.

As Walker sees it, the ultra-personal service her company offers is what keeps customers coming back to its stores — a third store will open in Calabasas, Calf. in spring 2021. She and her team communicate with customers via FaceTime “meet-greets” and text messages, and offer a range of styling services including setting up a rack of outfit options in clients’ homes. Currently, 50-70% of the company’s sales are driven through its styling programs.

“I still believe in spending time with one person — and selling one person 10 items, versus 10 people one item,” said Walker, noting that doing so positioned her well for 2020. “When you’re shopping at home and can’t touch and feel the product, you really need to trust the person on the other end of the line.”

Courtney Hawkins, head of retail at The RealReal, said the luxury resale company’s new focus is small-format “core” stores of 2,000-3,000 square feet that will cater to sellers. The first version opened in Palo Alto in December, and a total of 10 will open “in the coming quarters,” in communities with a high density of existing sellers. Each will be equipped with the equivalent staff and services of flagships, including valuation managers and gemologists.

From 2017-2020, the company opened five large flagships in large cities including NYC, L.A. and Chicago, the latter of which is 12,000 square feet. Each is equipped with a cafe, selling locally sourced, sustainable products to reflect the company’s values.

Overall, The RealReal is “pivoting” to offer more convenience, Hawkins said. She noted that it launched buy-online, pick-up in-store; curbside pickup and curbside drop off, for sellers, at its stores earlier this year.

“The more we’re looking at stores, the more we’re looking at how they help with the online business,” she said. “We want customers to know they can get in and out, if they don’t have time. But if they want to spend a lot of time, we want them to know that’s available, too.”

Pre-pandemic American life, especially for people in metropolitan cities, was often dictated by an always-on mentality. The average American commute to work was 27.1 minutes in 2018, and the average workweek was 44 hours. Add to that everyday household chores and child-rearing, as well as leisure activities such as working out, and there was a business opportunity for wipes. Wipes, including makeup wipes, deodorant wipes and body wipes, had become popular over the last five years as more sub-categories emerged. According to the brands behind them, they were perfect for tucking into a pocket or purse, and using for touchups at the gym or in-transit as someone ricocheted from one location to another.

But now the wipes category has been upended by stay-at-home lifestyles, gym closures, and easier access to sinks and showers. According to NPD Group, January-October saw a 38% year-over-year sales decline in makeup remover wipes, a 47% sales decline in facial cleansing wipes and a 12% sales decline in deodorant wipes. Even as the world emerges into a post-pandemic life (the CDC reports most Americans should be able to receive a vaccine by end of 2021), there are long-term consequences for wipe brands as at least 80% of people desire a hybrid telecommute workplace, according to a Gartner survey.

Goodwipes, which sells body wipes, flushable wipes and feminine hygiene wipes at Target and CVS, among other retailers, has seen a notable shift in its sales. Body wipe sales declined while flushable wipes increased, especially as people sought alternatives due to toilet paper shortages, said Charlie Siciak, Goodwipes co-founder. He said the brand’s body wipes were often sold through boutique fitness studios, though he declined to share the sales drop of body wipes. Goodwipes’s body wipes made up 20% of overall sales pre-coronavirus. Sales of flushable wipes, meanwhile, increased by at least 200% through retail partners; feminine wipes sales increased 25-50% across retailers.

To adapt to these consumer preference changes, Goodwipes switched up its marketing tactics. Body wipes were often featured at in-person events in partnership with fitness boutiques, and travel or hospitality events. Pre-coronavirus, 30% of the marketing budget was dedicated to wipes, but this has decreased to approximately 9%, Siciak said. In July, Goodwipes launched a subscription offering for flushable wipes, as a response to customer needs and to have more control over its inventory. The 7-year-old brand also shifted its tone during the pandemic to bring more sensitivity and empathy into its copy and imagery, but it maintained its humor and education around flushable wipes.

“We’re all sitting in the house and starving for community, so Goodwipes is trying to make little points of connection along the way, as well as [increase] education about the misconceptions around flushable wipes,” he said.

Goodwipes is not the only brand to see customer attention shift from body wipes to other wipe products. Jackie Stauffer, founder and CEO of wipe brand Recess, said body wipe sales have been flat, and sales of the brand’s After Sun Aloe Wipe and Charcoal Hair Blotter declined by 22% and 14%, respectively. Stauffer said part of the reason was a de-emphasis by the brand on pushing these products, especially as they were often distributed at in-person events. Recess is sold through independent boutiques and gyms, as well as at retailers like Free People and Violet Grey. A spokesperson for Violet Grey said sales for cleansing cloths for all brands have been relatively flat, and that the retailer has not seen a significant increase or decrease in overall wipe sales as a result of the pandemic.

Recess has focused on promoting its products among frontline workers and busy parents, instead, while also prioritizing its Amazon storefront. Recess’s Bacteria Fighting Face Wipes saw a year-over-year increase of 89%, while its deodorant wipes experienced a 52% sales increase and face cleansing wipes saw a 44% increase. The brand will debut hand-sanitizing wipes in January.

“People are weirdly just as busy, [but] the definition of busy is different. People aren’t going to the gym and then straight to work anymore, but we are hearing from a lot of busy parents,” said Stauffer. “Even though people aren’t on the go, the home used to be an oasis. Now, you’re doing all the activities and all the same things [in your life], but in a consolidated way.”

There is evidence to support Stauffer’s observations. The Wall Street Journal reported in October that even though U.S. telecommute workers no longer have a commute, they are working longer during the pandemic. Meanwhile, data from fitness platform ClassPass showed that 12 p.m. became the most popular time to work out during the week for the first time ever; lunchtime workouts have increased year-over-year by 67% increase.

“The way our day has have shifted is still not convenient,” said Stauffer. “It’s still a dynamic day with a lot of different needs, and in some cases, more challenging needs. It was not the strategy that we had originally set out for, but part of being a startup is adapting.”

As an essential store, Walmart became a lifeline for many Americans during the pandemic. And for young, up and coming brands looking for new customers, that created an unparalleled customer acquisition opportunity. 

While several DTC brands have tried out big box stores — such as Harry’s in Target — this year, big-box stores have become a key part of the DTC growth strategy. It’s a distinct shift in the digital commerce playbook. Instead of relying on online sales boosted by expensive digital customer acquisition channels, DTC brands realized they needed a behemoth partner — one that was able to quickly find new customers and efficiently deliver products during a pandemic. Walmart’s dominant fulfillment methods, large physical footprint and a global supply chain suddenly became a must-have during the pandemic.

From DTC mainstays like Quip and Lola to newcomers like Modern Fertility and mattress brand Big Fig, more brands are turning to Walmart — both its stores and growing e-commerce marketplace — as an important tool for growth.

Over the years, Walmart has courted major digitally-native brands such as Bonobos, Modcloth and Allswell. But many of those partnerships didn’t work out, resulting in a “mishmash” of assortment. Until now, the DTC playbook was predominately focused on growing direct digital sales and getting customers to buy from their own websites. Brands like Away and Allbirds, for example, have eschewed selling at big-box stores to maintain control over their branding and customer service. Large retail partnerships, the theory went, were good for distribution but meant less first-party data and fewer ways to control the customer experience.

That perception, however, has changed over the last year. As Walmart’s latest young brand partners can attest, being overly selective about retail channels is no longer an option. With every brand and retailer online, having a big-box giant partner is paying dividends.

“We know that the majority of people out there rely on big-box stores for their oral care needs,” Quip co-founder and CEO Simon Enever said recently. While big box partnerships were once deemed less-than-sexy among the DTC crowd, Enever explained that at the end of the day it’s where most Americans shop for necessities.

One of Walmart’s latest DTC additions is direct-to-consumer plus-size mattress brand Big Fig, which began selling on Walmart.com this fall. The company, which launched in 2017 and already sold on Wayfair and Amazon, took the partnership leap because Walmart’s shoppers overlap with Big Fig’s customer base’s need for convenience, said president Jeff Brown. As a niche brand in a category-within-a-category, Big Fig was already benefiting from the online shopping boom earlier in the year: It’s projected to more than double sales for the third year in a row, according to the company. However, the brand is taking advantage of Walmart.com’s robust e-commerce and SEO capabilities by being a merchant on Walmart.com; as a marketplace, Walmart’s website offers partner brands access to traffic data across a wider audience.

“It’s about a new audience’s ability to get access to our product,” Brown said. He also cited the straightforward onboarding to Walmart’s system as an appeal as a young brand. “It’s not a big revenue driver at this point in time, but we’re pleased with sales and happy with gaining a new customer base,” said Brown. 

Meanwhile, upstart sexual wellness and feminine brands have also been turning to Walmart as a new sales channel. Period product company Lola began selling its products at nearly 3,000 store locations and Walmart.com in March. While this partnership was planned prior to the coronavirus outbreak, co-founder Jordana Kier said the pandemic instantly proved out the expansion thesis. 

The company, which has sold 10 million period products to date, said the partnership is attracting new, younger, and more diverse feminine care shoppers who prefer to shop in store. It’s more difficult to convert a new customer for such an intimate product online; Lola has learned the value of being a physical package on a shelf. “We understand that everyone’s routine has been dramatically affected,” Kier said.

Another new element to the DTC-Walmart calculus is its fulfillment — which has become even more enticing as the retailer continues to build out its Amazon Prime competitor, Walmart+. With millions of customers in need of grocery and personal care items, Walmart is becoming a go-to amid the pandemic, even for niche wellness products. Afton Vechery, co-founder and CEO of health startup Modern Fertility — which began selling in Walmart in 2019 — recently said Walmart was an integral partnership because “often-time need these products immediately.” Which is to say: instead of doing the expensive expedited fulfillment on their own, more brands like Modern Fertility see the merits of partnering with a giant.

Put together, Walmart’s status as an essential retailer has invigorated its relationship with DTC brands. DTC brands grew because of cheap online customer acquisition. Now, with more brands online and competition increasing, companies are realizing the merits of big-box partnerships. While digital channels continue to fluctuate, companies are seeking out other ways to more sustainably find new customers.

Instead of thinking of mass distribution as something that made a brand less unique, big-box stores are now seen as one of the most important ways to meet customers where they are. That’s exactly what brands like Modern Fertility leaned into. For the reproductive health brand, the partnership is part of its overall mission to be more accessible. As Walmart continues to embrace digitally native startups, Afton concluded, consumers are able to walk into their local location and “see brands that resonate with them.”