Soft AF and The Goldilocks Principle
and how to make better hiring decisions
In my last newsletter, I promised you monthly posts and here I am down to the wire again. But I committed—and as long as it’s sent by 11:59p EST on the last day of March, it counts (or that’s what I’m telling myself). Let’s dive in.
This text message sums up nicely the recent discussions I’ve been having with my retail operator friends and brand clients.
It’s true. Retail traffic—in particular in fashion/apparel—is soft AF. What’s going on here? We went from “revenge spending” to an incredibly soft holiday quarter to a mere trickle of traffic. The anticipated rebound expected from a return to “normal” was squashed by high inflation and headlines about a recession. Before we all lose our heads, let’s look at a few important historical reference points.
First, might I remind you that the baseline for traffic was reset throughout the pandemic. Even though sales in some categories are beating 2019 numbers, traffic is holding steady at 15%-20% below 2019 levels. There are fewer shoppers, but those that are shopping are more likely to buy.
Second, historically the post-holiday quarter is a slow ramp-up for physical retail (unless you’re a gym or fitness center—new year’s resolutions are still a thing). January through March is the time to get your house in order: clean up broken processes, train teams on customer service, test and implement new programs, etc. The steep traffic drop-off is largely normal, but this year it feels especially painful after an abysmal holiday for most.
Right now, the “accessible luxury” category seems to be impacted the most. When you think about the customer base, the HENRYs, or even the more stable aspirational consumer, they don’t have so much wealth that they can absorb inflation. Even if they can absorb some, they are hedging in case things remain unchanged—or get worse. The natural thing to do is pull back on those $500 sweaters, $600 pumps, $300 trousers, etc.
Where consumers are continuing to spend is on personalization and self care. Wellness is generally performing well—from meditation classes to skincare. This is not entirely surprising given the time of year (see new year’s resolution comment above) but the focus on taking care of oneself seems more prevalent this year. Related is the interest in personalization. Consumers want something that no one else has—whether it’s their own scent or a custom shampoo.
I have no crystal ball, but I’m betting on these trends continuing through the better part of this year and possibly into the next. But to be clear to the accessible luxury brands, this does not mean it’s time to throw in the towel. Quite the opposite—now is the time to refine the customer experience, the product, and the processes. Consumer sentiment can turn on a dime and the brands that deliver a superior experience will continue to succeed.
ICYMI
For some reason this past month I spent a lot of time talking about sneakers and streetwear with Modern Retail 🤷♀️
Nike is opening stores for its owned brands
Sneaker reseller Impossible Kicks is betting on stores
Many brands are targeting Nike alums for exec hires
And: welcome to the world Olfactory Williamsburg! See a sneak peek here 👀
The [Hiring] Goldilocks Principle
Hiring the right leader, and ultimately the right team, can make or break the success of a store. Arguably, times of uncertainty amplify the impact of the frontline leader. But lately, I’ve been noticing an increased tension between hiring for experience versus hiring for aptitude. I recently spoke with Modern Retail about brands targeting Nike alums for their leadership hires. While this is a seemingly sound strategy, there’s more to consider than years of experience.
Ideally, a brand can get both—that goldilocks candidate who possesses the exact desired experience, and also has the aptitude to adapt and thrive in a new environment and culture. But, as we all know, humans gonna human—and there is no “perfect” fit. So which is more important? If one must be indexed higher than the other, which is the right choice? The answer—as usual—is: it depends.
Experience over aptitude
The only source of knowledge is experience
–Albert Einstein
Resumes are a thing for a reason. They tell a story—not only about where and how long someone has worked, but also a bit about the candidate’s drive, ability to adapt, and whether or not they can achieve the desired result. External experience is especially valuable when it fills a critical gap in the knowledge base of the internal team.
If a brand is entering physical retail for the first time, the experience of running the machine that is a retail store is incredibly important. In this situation, brands cannot afford to pay for someone who may be a “cultural fit” but is learning right alongside the rest of the team because the operational know-how simply isn’t there. At best, costly mistakes will be made and at worst, the new leader will be unsuccessful and will either need to be managed out or may self-select out on their own.
Aptitude over experience
Adventure is worthwhile
–Aesop
Despite its importance, experience doesn’t necessarily trump all—otherwise, why bother interviewing? All we’d need to do is simply tabulate the years on a candidate's resume and just make an offer the one with the highest number.
There are times when choosing aptitude over experience is the best path forward. When an organization is undergoing a time of transition or uncertainty, it requires a different sort of medicine. If not properly vetted, the experienced professional mentioned above may be disruptive—or threatening—to a fragile organization.
This is the time to pay attention to the leader’s ability to learn and adapt, more so than what they’ve accomplished according to their resume. If the existing team is experienced in their job roles and the need has more to do with motivation, buy-in, flexibility, and innovation, and less to do with knowing how to do a specific task—lean into aptitude. I’m not saying hire someone with zero experience to run a critical revenue-driving channel, but I am saying to look beyond the resume in these instances.
Introducing the Retail Readiness session
Entering and expanding physical retail is hard, not to mention expensive—unless you have a team of experts each with 20+ years of experience with you every step of the way. But if you’re at the beginning stages, it’s hard to know where to start.
That’s why we’ve created a 60-minute Retail Readiness session. Because we’d love for you to pick our brains—but our brain juices aren’t free!
In this Retail Readiness session, you will have both rekon partners available to you to tap into:
40+ years of combined retail experience
Field expertise around what’s happening right now in the retail landscape
Honest feedback and a sounding board for retail expansion plans, proformas, operations, tech stack, pitch decks, and anything having to do with physical stores
A deep dive into the topic/issue of your choice (concerning stores, of course)—we’ll roll up our sleeves and help you find a solution