Retail Association Speech, Delivered on Zoom, December 2020

Our managing partner, Christine Merser, gave a speech at the end of 2020 to a private group of luxury retailers. We thought you might find it interesting.

Good morning C's. I was told you are all C’s here this morning. "You know, CEO’s, CMO’s, COOs." My company is small enough that I wear all three of those C hats, and I say we take them off right now and instead, think of ourselves for the next twenty minutes as consumers of luxury and interesting products. I was asked to give you my idea of a road map for retail marketing for the next few years. What is the future for higher end retail and what strategically can you do to make sure your fabulous bags, shoes and clothing have center stage? Great question ---- but alas, I do not have the answer. I go by what I now call Minute Marketing at Blue Shoe. COVID taught us that the best laid plans, well you know the rest of that sentence. Make a plan for the minute and hope it lasts an hour. And, while I am being somewhat ironical, I will tell you the best advice I can impart to you today is to not make a three-year strategic plan. Throw it out. You have to plan the manufacturing and design of the products months and years out, and I’m good with that, but how you get customers to want what you sell cannot be planned like your life insurance policy. It is changing with the rise and fall of the sun each and every day, and for the first time in history, is totally driven by the buyer, not you, the seller. Let's look back a bit. Who would have thought that a teenager from Sweden, Greta Thunberg, would shame an entire United Nations delegation with her How Dare You! and then add in as an afterthought that clothing manufacturing is contributing to global warming as part of her attack? And, what does that mean for your marketing message in 2021? Macy’s started something that didn't take off but might be because it was a few years ahead of its time, and worth noting. With the staggering environmental costs of producing fast fashion, Macy’s announced in August 2019 ThredUP – great name people. This meant, some name brands will have a section in Macy’s stores to sell used clothing. And, while I recognize that this initiative might be a mirror into luxury brand outlets, in my opinion, if you are smart, Bergdorf, who I know is here today, you too will consider this, like your vintage jewelry collection, which you have done on the top floor for years. And, then you might want to start posting images of some of the gently used clothing and remind shoppers that it changes daily, which is that call to action to come to the store that you have been missing. Data tells us that the biggest driver of action is fear of missing out. Take advantage of that. Put that in your three-year plan and smoke it. But don’t buy vaping products to smoke because while they were God’s answer to getting off cigarettes two years ago, now they are persona non grata at any party. Faster than the hula hoop they were gone. That three-year plan is out the window on Juul, that’s for sure. Minute Marketing. In the moment, or in the case of retail, in the season. Or in the near future. Whatever works for your product or service. So, what can I give you today to help you put together your roadway to market share of your products that you believe – or I hope you do – are the perfect thing for your demographic? I hope I can suggest an approach to marketing in these times that are a changing. And, how can you evaluate your results? And trends? What the hell can you do with trends that are in and out faster than the the burger out of Los Angeles? I start every strategy session reminding my clients that no one cares about them, they care about themselves, and your job is to make sure you give them what they care about, not what you want them to care about. Every marketing meeting should start with a discussion of what your demographic cares about. And, also, how are they living their lives? It’s a changing tide…so ask it often and by the way, don’t just ask yourselves, but ask them - publicly. Ask them in social media. Ask them in surveys. Ask them in the stores in which you’re selling. No behind the scenes kind of research anymore. Go public. See the discussion around the answers. It will help you come up with marketing ideas. DETERMINE HOW DO THEY LIVE THEIR LIVES AND FIT YOUR PRODUCT INTO THEIR LIVES. Remember those movies in the eighties that had mall scenes? Remember when shopping was what every teenage did on Saturdays? They went shopping and ran into each other and the boys they hoped would kiss them soon, and they told each other what to buy and that was the thing they did every weekend Saturday. Now they watch streaming videos marathons. They binge watch Netflix and Hulu and they hang while they are doing it connecting to those boys on their smart phones. And, with Netflix's recent docudrama around Halston, they are going to offer the fabulous clothing shown on the screen ... for sale! The thirty-something crowd have been on the move. Sports. Games (games have never been more popular). They hike. They will go to exercise classes again, (and spend the $40 to do Soul Cycle rather than buy another pair of flip flops). They get their nails done and they eat. Maybe they only eat a salad but they go to restaurants. Breakfast. Brunch. Lunch. Dinner. But they do not shop together. They shop alone or by following their posse online and sharing what they buy there. Or seeing someone in something and asking them in social media whose fabulous jeans those are. Or at least that is how they were doing it prior to COVID lockdown, and I anticipate life will return to shared experiences having a larger and larger roles in the lives we lead. Adjust your marketing to their life habit changes. If you haven’t placed your products in the path of every day life, do it now.

In the Hamptons, Donna Karan’s daughter had a restaurant in Sag Harbor. I’m not sure it made it through last year's lockdown but ... You could eat at tables that seat your party size, or a huge banquet table where you might converse with some cool person you never met, or you can eat in living room seating sections. And, amidst the fabulous food, everything is for sale. The furniture. The racks of clothing that hang behind the table in the corner. The candles on the tables. Placing your products where people are - and are enjoying their lives - will give you the leg up you need to be first to market where your buyers are. In summary, people now care more about shared experiences than they do about buying things… but they will buy things in unexpected places while they are sharing their experiences. And, they are buying things that enhance their experience. For example, they are buying VERY expensive white sneakers in name brands and they are wearing them everywhere, including to black tie dinners and under their wedding dresses. It’s what I should have done today. Let nothing get in the way of their experience of the events they are spending their money on… GIVE THEM A MIRROR OF THEMSELVES AND A WINDOW INTO THAT WHICH THEY ASPIRE TO BE. People want to see a mirror of themselves and a window into that which they aspire to be.

In the early nineties, when I was a solid size 10, I was at Valentino’s New Year’s Eve party in Gstaad. I was a consumer of his clothes because I loved the way I looked and felt in them. They fit me well. I travelled in Europe a lot back then and bought both in Paris and New York City. We were sitting on the couch in a room that was designed to showcase those wearing his clothes for sure, and I asked him why his sizing only went up to size 12 in NYC but went to size 16 in Paris. “Oh you noticed,” he said. “American women care much more than European women about size. Women in America do not want to see large women in the same outfits they are wearing, so we only go up to size 12 in the United States.” I am sad to say I think it’s even truer today because we all live our lives publicly on social media. Consumers, especially women – and women still make up more than 70 percent of the buyers you are catering to, want to see a mirror of themselves and a window into that which they aspire to be. And, they want to see the products they invest in, on people who look like them and live the way they do, or the way they would if they had the money.

Give them both on your social media and you will solidify a loyalty that many of you are missing today. I think it’s because you only give them the inspirational… not enough mirrors. Do both. You have to adjust your expectations. Because 'that woman' is not shopping on that fabulous online store you set up for her, she will not be buying five things from your line but much more one thing she saw as part of the way someone is living their life. Stop trying to get her to do more than buy a one off that will look great with her black pants from Target. Let her buy it through her new department store - the influencer she follows numerous times a day. Is there anyone here who hasn’t seen When Harry Met Sally, the Carl Reiner film from the eighties where the film girl next door darling, falls in love with the angst ridden x, after they have been friends for years and years? Even if you haven’t seen the film, you have seen the scene where Meg Ryan fakes an orgasm in a deli to prove to Billy Crystal that he wouldn’t know if women were faking or not. In my mind every woman who saw the film had their first Me Too moment in their own heads as they watched that scene play out. Well, what if I told you that once they decided to have her do her fake love making during the scene, they had her change her clothes to a less sexy outfit, and judging from the other outfits she wore in the movie, that’s saying something. What she was wearing would affect the way we judged her orgasm performance. It had to be cute, not hot. A mirror ... a window into that which she aspires to be. So the mirror was the girl next door, and they knew intuitively that the girl next door had to be virginal when she was faking an orgasm at a deli in New York City. Makes perfect sense. So decide how and where your clothes should be worn, and then place them in that setting with models that mirror the women who will buy them. FIND THE RIGHT INFLUENCERS. AND YOUR BRAND HAS TO DO MORE THAN MAKE SOMETHING. Forget famous influencers. I would challenge Chanel’s use of people like Kirsten Stewart and Keira Knightly – as the Chanel spokespersons, or muses, as they called them in one press release not so long ago. In my humble opinion – it was a mistake. No woman wants to be a muse anymore. They want to be strong and fabulous and meaningful and feminine. Collaborate with your customers. Stylists matter more to your marketing than graphic designers. It’s not famous names, but rather those that live the life your customer wants to live, not starred in some film or other like Jennifer Lawrence. This is all part and parcel of your customer driving how your brand will be perceived. HOW you behave and showcasing your behavior will do more to sell your products than any amount of ad design. Give to the causes your clients care about. Be bold. Take the hit that no everyone will like you. Pick influencers who have followers that engage, not just because they have millions of followers. And, make sure they are living the lives you have now determined are the lives your customers are living and aspire to live. People follow influencers because they are the total package. An influencer is like a department store. They share with them what they eat, what they wear, where they go, how they live their lives and so I get one big bang for my buck. It's your whole life in one feed. Rather than seeing an ad for what ONE person wears only, I get to live their life with them on social media. They get it all … and in one place. And you putting your brand in the midst of that life is the best thing you can do. Look at Sophie Elgort for example. 34 years old. Her father is the famous fashion photographer from the nineties, Arthur Elgort, who many of you know personally. Her brother is film and music heartthrob Ansel Elgort, and Ms. Sophie is a fashion photographer who now has two children. She has a loyal following of 80,000 women and they buy what she loves. All of it. And, she lives her full, cool life the way they do. One of her hashtagsis #RealNewYorkersTakeTheSubway and she does and shows them she does on her way to this premiere or that museum opening. A mirror of themselves and a window into that which they aspire to be. When I worked with Anne Keating, head of PR at Bloomingdales, as they were launching the new store in Santa Monica, we had Sophie shoot it and she put it on her social media as well as for Bloomingdales, and that was one of the strongest drivers for the success of the opening. Sophie’s following shared and showed up to the store. Win win… PRINT IS NOT DEAD.

Contrary to popular opinion about my take on Print and PR, I do believe there is a place for print, especially in luxury goods. As long as Vogue is putting out a September issue, I think you have to be in it. But the days of putting pretty pictures of your perfume or couture on a page are over.

I was speaking with an old friend about my talk today and he mentioned that fifty years later, Clinique is still the number one women’s skin care line … in the world. There is no face of Clinique, and the packaging with the exception of changing bottles to plastic - which you might want to rethink before Greta – savior of our climate-changing world comes knocking on your door, is the same all these years. Who here remembers Carol Phillips who founded Clinique for Estee Lauder? I love the picture of her in the first white lab coat that Clinique used as a visual to reinforce the fact that Clinique is based on credible data. 1967. Ahead of her time to be sure.

Women like women who were ahead of their time. Maybe that Clinique ad in Vogue should be an homage to Carol Phillips. The story that she came from Vogue with the idea after a Vogue article about skin creams? The history of Clinique is rich, as rich as the yellowish cream that I still put on my face every day after the soap in a plastic green case that I could throw into my suitcase and exfoliating liquid that made the one two three skin care like brushing my teeth in 1975. Take that first Clinique ad and share with me the STORY of the woman behind it. Then I’m yours. So, yes I believe in ads if they have content above and beyond the product you are selling. And, be sure and take that ad budget and use it sparingly in print. My goal would be no more than 15% of the total marketing spend, and yes that means that wonderful ad person who you have supported all these years might not like you. Where to move that money you are saving? Move it to Life Experiences. Make synergistic pacts with those that serve those you wish to sell. Remember Weight Watchers in the nineties? They made a deal with McDonalds to have their salad dressings in every drive thru. Now we all know that no one goes to McDonalds for a salad, but many Americans feed their families there and those women are also sometimes members of Weight Watchers. It might have been a miss-matched pairing, but as far as I'm concerned, it was made in heaven. So, Clinique, make a deal with Soul Cycle and have small tubes of something for my face when I’m going to sweat my pores clear while cycling and on the back of that tube, give me some real information, some content about what happens to my skin on my face when I sweat like that. And, if the answer is drink water before or after, tell me, even if it is not about your product.

Soul Cycle is a trend. They died during COVID while Peloton peaked. Yes, I bought the stock. People moved their experience to their homes. Will Soul Cycle come back? I would say no. That's what makes it a trend, rather than a firm life style choice. Take the trends and place your luxury goods inside the trend maker’s presentations and social media and piggy back off them until their shooting star status wanes and you move to the next trend. Remember Killing Eve – the amazing BBC series that was on the tips of all luxury-loving women has been watched an average of three times by women all over the world? Rich women. They watched it three times! Those women, who loved the clothes that the female assassin Villanelle- who just won the Emmy for her stellar performance – wore. Amazing clothes that the woman chasing her was obsessed with – and so were the viewers. There is a YouTube video showing the outfits and the brands. The first picture in it has the following brands represented. Top: Lanvin. Pants: Zimmerman. Boots: Balenciaga. Burberry’s trench coat shows up in a number of scenes. Cloe’s got a blouse I would kill to have. (get the pun?) Not one of these brands – and the tens of others shown - have used the connection. How about you sponsor a showing of the first episode for those entering a contest on your social media. Ride the coattails of this amazing fashion forward, empowered women tv show trend from across the pond. Take out an ad on the websites that are posting articles about the series. Pounce on the potential of what they give you by using your amazing designs? Sponsor things where your people are experiencing their lives. The Hampton Classic, the height of wealth and luxury in the Hamptons each summer, has 30,000 people attending, most of who have expendable income. My company does the social media and we love that Longines is there front and center. Range Rover sells numerous cars each year at the Hampton Classic. The buyers are there and they have the time and the means to shop in between classes, while they are seeing and being seen at the show.

I predict that sponsoring events – the right ones for your market – will be one of the biggest parts of your marketing budget in the coming years. Get there first. Demand exclusivity for your category. Lastly measure success. Do not be afraid, my friends, of measurements – they are your friends. And when you throw ten things at a wall, the new norm is that each one doesn’t need to be a winner. You just need to have big winners when you do win. Use a unique website page call-to-action on that ad and measure how many people responded to your message KNOWING each one will not be worth the spend, but knowing and learning what works will ensure the next spend is better than the first. Be bold and believe in your ideas and not fear results that might not be as strong as you’d hoped. They will make you better. And, now quid pro quo. My pet peeve. Allow me another moment of your time. I would like to address social media’s single biggest challenge over the coming year and how you can personally address what is happening to our media, our country, and our souls. Please remember that whatever you click on gives value to that content. Our brains are hardwired to click on that which reinforces our point of view already. And, we love that adrenaline rush around that which makes us angry. Don’t click on bad news, or memes that rip apart rather than elevate our discourse. If you stop clicking, they will start writing about what you replace that click with. Click on content and articles from news agencies that you respect. Click on articles filled with factual information that will better inform you. Leave the pictures that make your pulses race to others less evolved than you. I beg you. --Christine Merser, Managing Partner, Blue Shoe Strategy