The Lead Innovation Summit Returns To Bridge The Gap Between Retail And Silicon Valley
When Noah Gellman and Timo Weiland founded The Lead last year, they wanted to bridge the fashion and retail industry with Silicon Valley through a series of initiatives and an annual conference. It looks like they succeeded; The Lead’s 2019 Innovation Summit attracted three times the number of attendees as the first edition to the Brooklyn Expo Center in Greenpoint on July 9 and 10. There, executives from brands like Studio 189, Goop, Rebag, Away, Chloé, Eileen Fisher, and more discussed topics like sustainability, standing out in a crowded market, and secondary market ecommerce retail. I spoke to Weiland about The Lead’s Evolution, the highlights of the 2019 Innovation conference, and what’s next for The Lead.
Last year was the first year. What lessons did you take from it for the 2019 edition?
The Lead is about content and community. Hence the right people, the right conversations. From the start, Noah and I have set out to build the best community of minds, brands, and companies across the fashion and retail technology intersection. We learned throughout the first year with four events that maintaining a highly curated method of community building is crucial to our success. Bigger does not automatically mean better.
How has The Lead evolved since last year?
We officially launched The Lead with our inaugural Salon Breakfast on March 8th, 2018 with 90 attendees. From there, we had the inaugural Lead Assembly (220 people) and Lead Summit (550 people). The team at The Lead has grown and over the last seven months, all hands have been on deck to produce The Lead Innovation Summit 2019 which was nearly a three times the scale increase to 1,500 attendees. We are fortunate to have had excellent speakers and sponsors since the beginning. The July 9 to 10 event had not only the highest caliber of executives in the room but over 80 speakers and 50 sponsors all sharing content and the opportunity to connect and learn with other decision-makers in the industry.
How has the retail climate changed since 2018?
There are unique challenges and opportunities in the retail climate — now in 2019 more than ever before — with more brands and more product offerings coming to market. Retail is all about the customer’s needs and desires. The main drivers have become personalization, availability, and sustainability. Customer centricity and acquisition cost is only growing year over year. The emotional connection to the product is also important, but that is not new. Leading DTC brands are becoming far less of a novelty — they have ‘arrived’ and several are evolving into a second-generation version of themselves. The 2.0 versions of these DTCs include Harry’s transitioning into a VC, Hims incubating companies, and Casper evolving into a sleep brand instead of just a mattress company. Established, traditional brands & retailers are also more open to both partnering & buying digital native brands today. The role of retail as a service is expanding through personalization at scale with brands like Function of Beauty and Rockets of Awesome.
Who can benefit from attending?
Executives from every layer of the fashion-retail-commerce value chain can benefit from attending The Lead events because of who else is in the room — the high caliber of attendees they will be surrounded by. This factor allows for them to have the right conversations with the right people. As an organization, we keep our events curated, exclusive, and focused so that we can remain high touch with the matchmaking and meaningful business connections that can be made between attendees. Another key benefit of attending is the learnings from the content — all topics being derived from the research practice within The Lead.
How did you select the speakers for this year?
All of our insights for programming originate from the research that we do. The process of collecting this research gives us exposure to incredible people from across F1000 companies + high-value DNVB / DTC, as well as the best and brightest start-up CEOs and their investors. Our 2 annual research lists are the Foremost 50 and the Leading 100.
What were the main highlights of the summit?
Upon entering The Lead Innovation Summit, executives were mesmerized by the living wall, a sculptural installation by artist Kevin Reed —the visual & most ‘Instagrammable’ highlight of the event. Beyond that, key takeaways from the Agenda at the Innovation Summit were captured with the help of Deborah Patton of The Robin Report:
The next-gen demands transparency and accountability. Sustainability entered the conversation repeatedly on and off stage. The consensus is that we shouldn’t be having sustainability conversations; the principles and practices should be deeply embedded into every company as business as usual, as sustainability pioneer Eileen Fisher demonstrates. In the meantime, Allbirds has its new sugarcane-based sneaker foam; Li + Fung supports 3D to mitigate overabundance of samples and stock; Rothy shoes are manufactured in China from recycled plastic bottles; Bolt Threads use bioengineered natural materials (mycelium and proteins) to weave fabrics; and Walmart’s mission is to ensure that private products by 2025 are sourced from sustainable cotton and 50% recycled polyester, plus packaging that is recyclable, reusable or compostable. So many inventions are made possible by emerging technologies fused with an ethics-based motivation to save the planet. If manufacturers and retailers are not playing the sustainability card — and it has to be authentic – they are closed out of the conversation with young consumers who are anxious about and burdened with solving our massive environmental problems.
-Culture is Key:
Bombas may be the startup poster child of where to work. In six years and with over 100 employees, only four have left voluntarily. With unlimited vacation and work-from-home time, the Bombas culture is built on trust and mutual respect. CEO David Heath says it’s critical to recognize that “employees are humans beings outside of the company world.” He has built a culture of gratitude, explaining, “I’m grateful that you show up and grateful to pay you to be part of our company. If you value the lives of your employees outside of the company, they’ll value their life inside the company.” Alexa Geovanos, president of the Americas for Chloé adds that the company operates under a European standard; by law, employees have to turn off their email after work and on the weekends. Heath’s goal is to be the best company to work for. He customizes compensation packages based on personal needs — to help pay down student loans, provide for a new baby, a new dog. Seriously! Millennial-focused businesses are not for the faint-hearted. Bombas has biannual company retreats modeled on summer camp, to foster relationships across departments and to form trusted bonds. He says to make this work, a CEO “has to be the first person in the pool. You have to lead by example.”
-Transforming Legacy Businesses:
The stalwart group of tech-savvy young executives at legacy brands has their hands full. Transforming a 160-year-old company like Macy’s into a nimble player in the digital marketplace is daunting. Parinda Muley, VP of innovation and business development at this venerable brand is the first to admit that this is hard. Compared to the sunny temperaments of digital natives, the change agents in the trenches have a challenge. She says her two-year-old innovation team must have the engagement (not just the sign-off) of top leadership. She also has to have the right team players. “We look for people who are very curious; no me-toos. We like to break things and reassemble them to create something new.” Their work has to be customer-focused and innovation has to be applied to white-space opportunities with products and services that they have the authority to play in. Success within a traditional business culture comes largely from transparent over-communication in securing engagement for what’s new and what’s next. Dan Cherian, VP of global innovation, performance and apparel & footwear at VF Corp says the challenge is to work with company leaders who are resistant to change as friends while trying to create change. His formula is “strategy, purpose, and innovation working together as one unit by bringing intellect, emotion and vision together.” His team rules: “No assholes; mashing up experience with naivety and following a studio model with no more than 18 to 20 team members on a project.” He adds the greatest asset to get people to change is fear.
-Artificial Intelligence is a Tool, Not a Panacea:
A key issue facing retail tech entrepreneurs is whether AI and singularity will be the cost of doing business. Is it a game-changer or a commodity? Most tech-savvy innovators leaned in toward the side of AI as a tool, not a solution. Matthew Mueller, founder and president of Knot Standard says that human curators and stylists are essential, as consumers don’t respond well to AI – they need human validation. Kris Zanuldin, head of connected commerce at Amazon says voice commerce is hard to scale, as machine learning still can’t master customer nuances and contextual requests. He says when asked to turn off the lights, Alexa is hard-pressed to know which lights and which room, whereas a human instinctively knows how to respond. Arti Zeighami, global head of advanced analytics and AI at H&M says we need to redefine AI as amplified intelligence. Ethics in AI is a clear and present danger, and he says companies need to guardrail algorithmic bias. Michael Reitblat, co-founder and CEO of Forter (an e-commerce fraud protection firm) says, ‘The challenge is how to deliver personalization and at the same time ensure personal identity safety.’ And finally, as the tech vocabulary evolves, the current view of software is that is has transitioned from task-based to goals-based.
-Social Justice As Table Stakes:
Rebecca Minkoff, co-founder and creative director of Rebecca Minkoff says her initiatives have always been disruptive to the status quo culture. ‘We live in a world that is falling apart. We need more female founders, more funding, more voices for minority women.’ Her Female Founder Collective advocates for female-founded businesses and changing the pay and equity of the 12 million women-owned businesses. She supports working hours of 10:00 AM to 4:00 PM so employees can take care of their families and kids. Her workforce is 50/50 male/female, inclusive and diverse. Sandra Campos, CEO of Diane Von Furstenberg, says her company’s mission from its inception is to empower women with a purpose-driven brand and business to help women take charge of their lives. Abrima Erwiah and Rosario Dawson co-founded Studio 189, a business based on social justice to bring economic development to Ghana in West Africa. Through microfinancing, artisan communities use traditional craftsmanship to produce sustainable products. If you were to ask the classic question: what business are you in? Rosario and Erwiah would respond: social impact investing (not retail) to create jobs supporting personal empowerment and provide skills training – this is the lifeblood of millennial values and brand affinity, and a bellwether for the next iteration of retailing.
Emmett Shine, founder and CEO of early-stage investments, Gin Lane is the Zen Master of startups. What is so interesting about this next generation of business owners is their sense of purpose, integrity, and authenticity in being transparent and responsible. I do not say this cynically or lightly. Spending two days with The Lead makes one realize that we are dealing with a shifting worldview and desire to balance personal fulfillment with financial success. If these entrepreneurs pull this off, it will result in a remarkable new business world with a revised sense of values. Emmett guides the next generation of consumer-facing companies. Over the past decade, his firm has launched 50 startups, including Sweetgreen, creating nearly $10 billion in market value.
-The Bottom Line:
As energizing and exciting as it is to be immersed in a startup community, there comes the defining moment of what it takes to run a business that becomes public and scaled to a higher level. It is not trivial to consider the value of experience. Keeping an established retail brand thriving in a digital economy can be heart-stopping. Most of the traditional brands at the Summit agreed that shifting the infrastructure and culture of a legacy company requires partners and acquisitions, not internal builds.
In the end, what does it take to actually run a big retail business? Mike Gould, former CEO of Bloomingdale’s and Brendan Hoffman, CEO of Vince and former CEO of Lord & Taylor and Bon Ton had the final words. Admittedly the elders on the stage, their wisdom cut through the clutter of hope and possibility. It requires being smart, open-minded, immersed in all aspects of the business and creative to ensure that a legacy brand survives the digital revolution. Retail CEOs can dream big but in the end, it’s hard work and guiding all aspects of the business to evolve to stay relevant.
The jury’s out on the future of department stores and malls, but it’s going to take individuals like Hoffman who can artfully cross over from retail operators to suppliers to look at the business holistically and develop an evolved culture to bridge virtual with real and old with new. He has done this successfully. Having turned around a weakened Vince brand, he is leveraging its renewed energy by blending the new and old worlds together to create a platform that provides new consumer concepts and additional avenues of growth for the brand. Vince’s Unfold subscription business is one such initiative. Members pay a monthly fee, then receive weekly offers to rent the latest Vince styles and return them whenever they want. They are also partnering with Rent the Runway, reflecting the new collaborative business ethos, which enables customers to experience the Vince luxury brand affordably. The Vince platform essentially operates on different distribution models: buy, subscribe and rent.
True innovation for a legacy brand like Vince has a competitive advantage using its existing positive brand image and scale to achieve success more quickly. The startup world, as innovative as it is, will still need wisdom and experience to keep the business grounded. Fusing traditionals with revolutionaries may be the winning formula.
One of the themes was how to break through as a brand in a crowded space. What do you recommend?
Creative partnerships are key to breaking through the clutter. An example of this is the Zenni Optical collaboration with the NBA team the Chicago Bulls. Zenni has also diversified the way that the brand acquires a customer with offline advertising on public transit, billboards, and experiential at music festivals around the country. Goop talked about their high-end events (at over $1,000 ticket cost) for customers to bring their brand to life including wellness retreat weekends, summits, and classes. Similar to Goop, Need Supply Co. and Totokaelo act as more tastemaker curation sourcing must-have products from coveted brands, exclusives with limited quantity, and product drops with viral buzz surrounding their release.
What would you like to see for the next one?
The Lead Innovation 2020 will be closer to 2500 attendees in a festival format. The Innovation Village was an extremely well-received aspect of the 2019 event, therefore we will expand upon it as a commentary on transformation and bringing industry-wide innovation to life. There will be more digital native brand experiences woven in with the tech startups from each layer of the fashion-retail-commerce value chain showcasing their products. DNVBs Snowe, AYR, Hatch plus Foremost 50 List honorees Zenni Optical, UnTuckit, and GREATS shoes alongside additions from next year’s F50 list to be announced in the Fall.