Experienced leadership is always valuable and having a few crises under your belt never hurts.
Thatâs the message from Christine Day, CEO of fashion brand The House of LR&C, the apparel company she co-founded in late 2020 with singer Ciara and NFL quarterback Russell Wilson. Having run the Asia-Pacific Group for Starbucks and then as CEO of Lululemon, Day has navigated a few market downturns and believes sheâs got the right mix of strategies in place for a tough 2023.
âMaybe thatâs just my role in life is to launch things during turbulent times. That experience helped me figure out what are the right strategies. âWhere do I have to be careful?â, âHow do I risk assess for this?ââ she told PYMNTS in a recent interview.
On that score, she feels relatively calm about the uncertainties ahead in 2023 as Day said, âWeâve built a seasoned team, because if youâre going to build a sustainable fashion brand in todayâs environment in retail, you need to have experienced experts, particularly in fabric technology and supply chain.â
A critical lesson learned over her storied career is the importance of payments choice, having been instrumental in launching the Starbucks Card back in the day, among other innovations.
âIâve certainly seen in my career the value of letting the customers have choice about how they pay,â she said. âOne of the things we saw with gift cards was it built tremendous loyalty when people had money on the gift card and on their apps. They would choose you when they had a choice between two because youâre going to spend the money that youâve loaded.â
In 2023, she said, âAs weâve built The House of LR&C we already have and accept eight different payment types. Weâve implemented Klarna. Letting the customers buy now pay later, pay in small batches is an important part of the customer acquisition strategy is to give them that choice and remove the barriers to purchase.â
A Cost-Conscious Omnichannel Approach
Day is hyper-focused on high customer acquisition costs and ways to minimize that while attracting new fans to the young brand. From the start, The House of LR&C was direct to consumer (D2C) but also leveraged Dayâs experience at Lululemon, bringing omnichannel and wholesale into the mix.
âWholesale is actually a great customer acquisition strategy, itâs a way to convert your cash faster,â Day said. The brandâs pacts with Nordstrom, Revolve, Kohlâs, Amazon and Zappos are ways of expanding distribution to reach new customers who want different experiences.
âYou have to be everywhere the consumer is,â she said. âThe consumer leads a lot more in terms of what they want, whether itâs payment methods or how they enter a brand space or where they shop. We have to be a lot smarter about that omnichannel experience that the guest expects. And I donât think we can get locked into one channel.â
Thatâs led to four open pop–up retail locations and using digital technology to make discoverability easier. For example, The House of LR&C is using flow codes â a more programmable and customizable form of QR code â to bring shoppers directly to custom landing pages on the site, depending on which of its three lines they want to engage with.
She said, âItâs a way of interacting and sharing the story of The House of LR&C that includes the option to pay for or purchase a whole outfit. We also use that technology with our affiliate partners. We can create commission programs or extra compensation for our partners if they hit store targets, etc.â
Itâs working, expanding brand awareness while controlling customer acquisition costs, whether by leveraging the high customer loyalty at chains like Nordstromâs, fashion marketplaces like Revolve, or more affordable names like Kohlâs.
2023 Outlook and the âCautious Consumerâ
Connected commerce is key in The House of LR&Câs eCommerce strategy with a search slant that brings those interested in specific lines â from The Good Man Brand to Lita by Ciara and Human Nation â directly to landing pages for those brands and encourages cross-shopping.
âWe know 30% of our menâs purchases are done by the same womanâs profile for Lita,â Day said. âWe use our menâs shoes and bring them into that, then port them over, and what we see is cross-shopping. By acquiring the customer information, we can then target them without paying for the higher customer acquisition costs.â
Entering 2023 after a strong 2022 performance gives Day confidence that her team can overcome whatever this year throws at them.
While she anticipates a âcautious consumerâ in 2023 trading down, she added, âI think it will bifurcate. Youâre going to have the people who are more squeezed economically who will shop deals. Theyâre going to be looking for that high value.â For companies themselves, she said, âThereâs going to be a lot more focus on business model performance and demonstrating that youâre able to put a business model in the market that generates returns for shareholders.â
Here again, experience pays off. âWe had a great holiday season,â she said. âWeâre still a private company so we donât disclose big numbers, but, The Good Man Brand, which is our oldest brand, was up 200%. Weâre up 400%. Lita is just one year old. We drove about 10 points of growth in our DTC business [in 2022]. I would say itâs working pretty well.â
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