Most department stores use a matrix of good, better, and best for merchandising. For example in dinnerware they will have a low, middle, and high price point in several styles to choose from. In the 80's specialty stores came along like the Gap, Staples, etc. trying to dominate in one category.
The core of Urban Outfitters and Anthropologie stores is the idea of cutting across demographics. To do that successfully, they create an environment based on how their customers want to live. The difference between Urban Outfitters and Anthropologie is who the core customers are. Urban Outfitters is targeted to the college kid who wants to one stop shop and fill his dorm room with everything he or she might need for the school year. The Anthropologie demographic is older; 50% with kids, 50% married a different stage of life.
These as some of the thoughts Glen Senk, President of Anthropologie, shared with us a few years ago at their flagship store in Wayne, PA. In his words, the retailer thinks about three things:
- product -- making sure they hit the customer's sweet spots,
- presentation -- making it look better and incorporating it into our overall store design, and
- people -- customers and employees.
Store employees are important because they are the people customers come in contact with and since we always hate things sold to us, Anthropologie wants friendly sales people representing the store and the company. They hire smart, sensitive, passionate people who have integrity and are fun to talk with if you're a customer. "If their parents didn't do the proper training, we certainly can't," said Senk.
Diversity and Passion -- Autonomy and Creativity
An internal focus group conducted by Anthropologie revealed that diversity and passion are the two most important employee attributes towards their success. The company employs many women in senior leadership roles including people from all over the world working for Anthropologie.
The paper test is one of Senk simple measures for the business and company. How quickly does someone pick up the piece of paper they happen to come across lying on the floor? Another standard they use is how quickly does someone open the door to welcome a person into the building? And how is that person greeted? The company's employees take the responsibility for welcoming a guest to the business, whether it's the FedEx man or business visitor.
Senk holds the expectation that everyone must make a difference. A good example of how he wants Anthropologie to run is the idea behind bird migrations. The bird flying in front works the hardest and the birds in the back fly for free. The birds rotate over the course of the journey. If one bird in the formation becomes hurt, the entire group will stop until that bird is ready to resume the flight.
Merchants who do business with Anthropologie are expected to make mistakes. How else will they try new stuff? You promote creativity in your business by allowing your employee to be creative. "We can afford this by making sure strict financial controls are in place," states Senk. "The secret is creativity, there's a big difference in doing and talking about it."
A great example of creativity and financial control in the company's daily business life is business cards. They were costing around $50 per person per year (they look at every dollar every month). A graphic designer comes in and says they can save money by using a standard card for everyone and customizing with a stamp. That's the ingenuity they look for and require out of employees.
Another great example is the bird mobile displays you see in their stores. They look great and they were created out of magazine clippings, tape and string. Having met Senk and store employees over time, I can attest to the fact that being creative and autonomous doesn't mean being cheap on the service side.
The most difficult people to get into the organization are for senior roles. Senk looks for balance -- with both left and right sides of the brain working -- and typically for outside accomplishments as a good indication of performance potential.
The Report Card
"In the retail business, you get a report card every day." [Glen Senk]
Formally there are eight benchmarks -- sales and profits numbers for each of the four quarters to judge yourself on. "In business nothing screws you up more than loss of confidence," said Senk. "I'm always afraid people will decide not to like us, our ideas won't work." He never had a plan for self-promotion. Went into retail from business school, the only one from his class. He sensed in the retail business you could control all aspects of the business. And never worried about getting recognized, only worried about doing a good job.
How do They Do it?
Every store will recognize a good idea, document it, send it in and it's circulated through the entire company. The company has an annual contest where the winner goes on a buying trip to Europe. They track and share product stories, celebrity sightings, and anecdotal stories. They have fitting sessions where the customers come in and communicate directly to designers and marketers what they think about a product.
Anthropologie has been mentioned in well over 1,000 press articles. The ones I read were very positive, including a feature in Fast Company magazine. The article is by Polly LaBarre, one of my favorite writers. It's as fresh today as it was when she wrote it. And so are the company and its stores.