Adore Me's Game-Changer Strategy

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  Good morning, everybody. Thank you for joining today's, final RetailNext fireside chat with Adore Me. I'm very excited to have Marie-Prune de Batz, performance and merchandising director at Adore Me with me today. Little bit before we hand it off to Marie for introduction of herself.

  I'm Joe Shasteen, global manager of advanced analytics at RetailNext. RetailNext is the first retail vertical IoT platform to provide ecommerce style analytics for brick and mortar retailers. Our centralized SaaS platform automatically collects and analyzes the data to provide real time analytics to our retailers so they can make data driven business decisions in real time. We are the pulse of the store with over with trusted by more than four hundred and fifty retailers across ninety ninety countries globally.

  And with that, I'm very excited to have you here today. Would you mind just giving a little bit of background of yourself as well as, Adore Me and the history of kind of, physical stores within Adore Me? Yes. Absolutely.

  So I'm gonna start with Adore Me. So Adore Me is a lingerie company. It was funded by, our current CEO, Morgan Hammond Weich, in twenty eleven when he had trouble finding high quality but affordable lingerie. And so that's how he started.

  He's a graduate from Harvard Business School, so that's why he started in the US. And, well, he he started, our website in twenty twelve. And in the first year, we sold over, one hundred thousand garments, so that was really successful. And in twenty fourteen, we were, the second highest, lingerie growing brand according to, Inc.

  Five thousand. I sorry. I don't remember the name of the ranking, but, yeah, very huge accomplishments. And then we became profitable in twenty seventeen, and that's where we opened our, own Atomy services.

  And store became very quick after that because we often we open our first store in twenty eighteen. And then we started expanding in the eastern and southern part of the US. And I think the latest news, for Adore Me or Big Exchange, we got acquired by Victoria's Secret, two years ago, twenty twenty two. So that's really, like, the biggest accomplishment is was four hundred million dollars for the acquisition, which is, like, the biggest, b two c acquisition in a very, very long time.

  So, yeah, obviously, very successful. I'm very happy to be here. Great. And with that, you mentioned opening the stores in twenty eighteen.

  So what was some of the rationale of moving from kinda digital into the physical brick and mortar stores? So I think there was several element. It's something we always had in mind, like, you know, online and in store. It's something that are very complimentary.

  But there was many three things. The first thing is that at the time, we started to see limitation around our own acquisition, like CPA starting rising, like acquisition cost. And so we wanted to try this new business model. Second thing is that we really felt the need to meet our customer in person because there is so much that you can do with data.

  But at some point, you really need to hear customer feedback, like, really where they are. And the third thing is that we really wanted to try this business model, this new business model, but we also have, like, we wanted to challenge it, challenge all kind of retail way of doing thing. And so I think we were just coming with that mindset of test and learn and trying to find the right time to do it. And with the acquisition cost, like, surging, that's where we said, okay.

  It's the right timing. We should open the store. Yeah. That that makes a lot of sense.

  And I think we hear that from a lot of retailers as they go from digital only into the online space. That cost per acquiring those new customers is really starting to rise. And opening those stores is a new way to kinda make that a little bit more efficient. But along those lines, when you open those new stores, what was then the rationale for adding traffic sensors and getting data like that?

  So what was the initial kind of plan or strategy for traffic, and how was the what was the goal of that project at that time? Very good question. So I think it's because we're coming for like everyone at Autonomy is data driven. Like we're even almost more a tech company than a fashion company.

  Like I'm a data analyst myself and I'm the owner of like everything that's happening on the website. So opening stores and being blind around the data was just something we could not do. And at the time, we really looked for a solution to help us be like, okay. Online, you have this funnel, which is, like, traffic, conversion rate, AOV, and that's, like, your revenue equation, and that's where all the optimization that we're doing are coming from.

  How do we manage to replicate that, in store? Because, obviously, you get, like, your average order value. You get it from customer purchasing. But the two other steps, which are traffic and conversion, how do you get it?

  And that's where we decided to install, like, the traffic counters. And I think, like, for us, that was one hundred percent success because we really managed to, replicate this funnel. Obviously, with KPI slightly different in store, like, we have the capture rates and then the traffic in store and then the conversion rate in store. So that's the first thing that we really wanted to, but then I think there are two other elements that we didn't necessarily forecast at the time, but that were really, really useful.

  The first thing is kind of obvious, but coming from digital, it's not the first thing that come to mind. It's like labor planning. Obviously, when you're going into store, you need to plan accurately how your different sales associates are gonna, like, come, how much you need every day. And so that's something that we had to learn from scratch because, obviously, very different from digital.

  And so that's how we started, like, with the traffic data that kind of help us from the beginning planning very accurately, this, like, labor planning. But I think now that we have, like, more than four years of data, it's crazy how accurate actually the plannings are. Thanks to, like, just, you know, past data that's really helping us. And I think the third interesting thing that we have is around, like, demand forecasting and, inventory management.

  Because we have this tool that was developed internally by our data science team that's kind of, like, replenishing product as soon as they go as they're supposed to go out of stock, so they never go out of stock. And, actually, we've integrated the traffic data into that tool. So it's not only like you reach a certain threshold level and it's replenished. It's really like like anticipating the peak of traffic that we might get from seasonality or is there element to really get this one hundred percent accurate forecasting.

  No. That's great. I feel like you just hit on, like, all the main points that we usually try to explain to customers as to why they need this kind of data and how it can be useful, you know, especially when they're coming from the the online space, like you said, where you maybe weren't considering some of these options until you start to open up those stores and really see the different needs that you have in operating a physical store. But kind of along those lines too, do you find I guess, what do you find are the main drivers of traffic into your physical stores and potentially the differences that you might see, with driving traffic to physical store versus driving traffic to your online spaces?

  Yeah. So a lot of it is similar, but we do have some differences. So for instance, in the similarities, obviously, the high promotional period. So you have, like, usually December and June are usually, like, semi annual sales month, so very, very promotional.

  You have Black Friday. Everyone knows it's crazy, both in store and online. Then you have some seasonality that are, very specific to our business, like Landry, obviously, Valentine's Day. The current period is very high in traffic, both in store and online.

  But then we have some element that are more, specific to stores. The first one is, like, we create the specificities with our, CRM strategy that is dedicated to our, store customers so they would get a promotion that we only apply in stores. And so this is, like, to drive more traffic. Second thing, which is, like, online, if you have a deadline, like, for instance, Valentine's Day, Christmas, or any, like, birthday or anything, if you wait too long, then you cannot shop for it because you have kind of, like, the delivery time.

  So you have a sort of shipping cutoff. Whereas, in store, you can shop until the last minute. So for instance, around Valentine's Day, we see online ourselves decreasing around February seven. Whereas in store, we know until the fourteenth is gonna be a huge traffic for it.

  So that's really, like, seasonality driven, but also specificities of store. And I would say the last element is, like, we're organizing several types of events in store, like, to really drive traffic. And these are something we don't do at all online. So for instance, we're gonna have influencer events.

  We're gonna have events specific for top, store customers. We're gonna make some very specific event like bridal showers in our store that would drive a very niche type of customer, which is a bridal market. So, yeah, all these elements. No.

  I think those all are great, and I'll probably ask a few more questions about kind of driving the in store experience and making that unique compared to the online in a little bit. But just to understand a little bit more about the differences between your online shopper and your in store shopper, are there different metrics that you that you see between those, you know, different types of shoppers? Are there different, you know, acquisition strategies you're using to try to drive, you know, a shopper who's online into the store or potentially, you know, an in store shopper into online or, you know, different methodologies or strategies there as well? Yes.

  We definitely do see different metrics. The first one that's obvious, I think, for anyone that's seen both online and in store is the conversion rate. It's so much higher in store. Like, you know, they say online, you need to see your product seven times before just buying it.

  Whereas in store, obviously, the first time you come into store, your purchase in dent is much higher. And if the sales associates are doing a great job, chances are super high that you're gonna buy. So conversion is way higher. Then in terms of, like, average order value, I would say it's also different because online, we work on a subscription based model.

  So very often, the first, order value is way lower because customers are more in the, like, testing mindset. So they're gonna shop for, lower value item like pencils, for instance. Whereas in store, we really see this high, order value from the first order. And then starting the second orders, they're kind of more aligned.

  So we see that's our average, like, what customer will shop on Adore Me, but we really have these two difference. And finally, the third difference is that online, we sell in sets. So you need to buy your bra and your panty that are matching. Whereas in store, customer can basically buy what they want.

  So that's also giving us very strong, insight and feedbacks of, like, okay. In which cases is it really important for a customer to have the top and bottom matching? Whereas in which case, it does she just doesn't care and will just buy the bra, for instance. So that's, like, small difference.

  Yeah. And that's another interesting point too about that different experience in store versus online, a little bit more customizable potentially in store, giving customers a reason at that point to get in sort of maybe, you know, get the options that they're looking for instead of maybe being locked in a little bit more with what the online platform will provide. But kinda taking a little bit of a step back to think about your overall traffic trends in stores. You know, over the course of twenty twenty four, you know, RetailNexus performance post data showed that traffic was down about two and a half percent compared to twenty twenty three.

  The apparel industry, a little bit better than that, maybe about, you know, negative one point five percent. So pretty in line though overall. And then kind of post pandemic, though, we still are seeing that we're in kind of a new normal with traffic trends being about, you know, ten to fifteen percent lower than they were in twenty nineteen. So I'm just curious.

  What have you seen, you know, being with Adore Me for for a few four or five years now at this point? How long have you know, what trends have you been seeing as well in store with your your physical stores? Yeah. So that's very interesting.

  Right after the pandemic like, obviously, during pandemic, well, was no traffic in store. And right after the pandemic, we really saw a surge of traffic, like, almost customer can back almost back to life. You know? They wanted to be in store.

  They wanted to speak to people. They wanted to have the sales associate explaining to them. Maybe they wanted to, you know, see other customer. And so we really hit our peak of traffic between twenty twenty one and twenty twenty two, early twenty twenty two.

  And after that, it's true that we've encountered difficulties, like, having traffic, well, first into the mall and then drive driven into our stores. So we've improved our capture rate of customers. So, technically, we decreased less than the, like, organic traffic that we're encountering to malls, but we've since since twenty two, like, I would say a double digit decrease since that time. And, yeah, that's really probably one of the biggest challenge that we're encountering in store because, well, obviously, we're kind of dependent on the mall traffic, and there is not much more we can do.

  Yeah. No. That makes sense. And then kind of, you know, talking you mentioned a little bit of this earlier, but how are you balancing your omnichannel strategy for that digital platform online sales versus the in store?

  You touched on a few of those points around the experiences there. But, yeah, what are you doing to try to drive that experience to make sure that customers are coming in store and it's still a unique experience that's gonna drive that repeat visit for customers? Yeah. I think the main difference between online and in store, at the for me, even on a personal level, is just the human experience that you get in store and you don't necessarily get online.

  And so that's really what we try to emphasize on our, in our stores. And I would go with having, like, sales associates, like, really being there to help you and, like, just finding the right size, being there to measure you. Like, do you know, like, eighty percent of women actually don't wear the right size, of bra? So that's, like, something you won't notice online, and you might think it's the right size for you.

  It's not really. So having yourself associate helping you choose and even choose the right shape, you know, like, intimate, like, it's some like, sorry. Lingerie is something that is very intimate for customer, and so having someone helping them might be very tricky. And even if you go further than that, just experiencing the product, being able to touch the fabric, see, like, if that's really something you wanna have so close to your body.

  And I would say also, like, helping into the whole gifting area. So either during, like, Chris like, holiday period or Valentine's Day, we have a lot of customer that come here for gifting. And if you're not, yourself a customer of lingerie, it might be very tricky to find the right gift for the person you're wanna offer something to. So I think having someone helping you is really, well, it's just why customer are coming.

  Yeah. Definitely. And I think we know from kind of surveys and the ex and, you know, other research out there that when customers are coming into stores, they're looking for more than just a place to transact. Right?

  They want that experience. They want the consultative services of, you know, making sure they're buying the right thing, right size like you mentioned. So I think that all makes perfect sense with, you know, how you're gonna drive those, individual customers in store and then repeat visits. And I'm kinda curious about, you know, how do you monitor repeat visits?

  Are some of these services, are they appointment based? Is it all kind of, you know, walk ins and then they're able to get the fitting? How how do you balance that? So we have several elements.

  We have some very, like, data driven points and some that are more, like, qualitative. So for instance, we have, the net promoter score, NPS, that we're measuring very accurately in all of our stores. And for us, it's, like, one of the main KPIs regarding customer satisfaction. We make sure that it's never going, like, below ninety, which is almost twice what we have online.

  Not that it's not important online, but it's just like we know that customer are coming in store for that experience and that's what it's measuring. So that's why it's so important for us. And then on the more qualitative side, we just make sure that our sales associate, they know their top customer. And so for instance, you were mentioning, like, customer that are coming back, like, a return rate.

  Well, they have the personal cell phone number of their top fifty customer, like, each of them. So for instance, where we have an event or something a bit, like, exclusive, they will be able to call them or text them to tell them, hey. You know, remember this new collection we're talking about? Yeah.

  It's in store. Do you wanna come and see it? You might get an exclusive discount because you're such a loyal customer and you've been here first. So that's really like, having this relationship built between customers and our sales associate is really something we're trying to enforce, to make sure customer wanna come back.

  So it really comes down to kind of making sure that experience is great for customers, and they're kind of connecting with the brand and associates in the store to, you know, drive that repeat visit. But along those same lines too, you know, within the in store experience, is there any sort of, you know, newer technology that you're implementing whether, you know, AI driven, you know, everybody's trying to drive AI tools at this point, but any sort of interactive experiences, app experiences, check ins like that. Anything else that you're adding to the in store experience as well? Yes.

  That's an interesting question because especially for Adore Me being, like, tech and data driven, we're like, okay. We're gonna revolutionize everything and put, like, tech everywhere. And let's just say we came a little bit back on that. So we implemented some elements that are, like, extremely well working.

  Like, for instance, we have the smart mirrors that enable you when you're in the fitting room to just, automatically get a garment either in a different size or different color without having, you know, to get dressed again, get out coming back, etcetera. So this is working extremely well. We have also, like, the what we call the flying cashier. So it's like you're able to check out any points in the store where there is a line at the cashier or just, like, go to any sales associate and just check out.

  So that's great. But then we try to, you know, spice it up a little bit and we're like, okay, sizes, like, finding the right size for you is so tricky in the lingerie business. So we use this tool that at the beginning is a fitness, tool that kind of scan your body and give you a three d rendering of your body. And this tool is supposed to give you the exact right size for you.

  And this was working, like, perfectly. Like, the size were extremely accurate. But the issue is, like, customer actually didn't really wanna see their body in a three d scanning because, well, no matter how confident you are in your body, maybe you don't wanna see that. Maybe I don't know.

  Plus, if you're getting measured or you're looking for your size, maybe something happened in your life that makes you wanna, like, you know, maybe I don't know. You had a baby and your body changed and so you don't wanna see this three d body scan right away. And so having a sales associate that's extremely nice and that's gonna walk you through the experience and explain to you what she's doing. And then, like, you know, just this human touch is actually much better for a customer, and that's something they value way more.

  So, well, like, data is great. Technology is great. The customer that wanna try this three d body scan are more than welcome to do it, and it's fun and different. But on the other hand, we found that it was not something we wanted to scale too much because customer rather have human, actually.

  No. That yeah. That really makes perfect sense. I'm fascinated by the the smart mirrors and being able to really kind of make it more efficient for customers to get what they're looking for, try on sizes.

  Right? Like you said, not have to spend that time to put back on all their clothes, go back out and find, you know, the different size. That's really a great tool to make the experience more efficient and a better try to really drive that more repeat customer. Kind of also along the lines, I know sustainability is very important for Adore Me.

  Could you maybe talk through some of your strategies for that and maybe how that's also helping to drive more in store traffic? Yes. Absolutely. So, Adoremi is the first, I think, intimate b corp company in the US.

  That's something we're very proud of, and it's indeed, like, put everywhere in our windows in store. But I would be honest there and I would say customer don't come into our store to shop for sustainable product. They come to shop for lingerie and cute outfits and outfit that are, like, fitting and make them powerful and confident. And the fact that on top of that, we're sustainable.

  It's something that, yes, probably it helps some of the customer to convert in the end, but that's not our main driver of approach. But it's still definitely something we insist on, especially with the sales associate. They all get a training around sustainability. They can explain to you, like, how, like, all the garments are made, why sustainability is important for a dormie.

  On top of that, on each garment, you get, like, a tag that you can scan and will give you, like, all the explanation around, why the product is sustainable and maybe even why it's not perfect yet and, like, why it's part of Adore Me's strategy to really make sure all the product that we're doing are more and more sustainable every year. Then on more, like like, driving traffic, we have, this initiative where you can, return a bra that is used. And then we'll work in partnership with an association, and we'll give back all the used bra, and they will give it to person in need. And so that's kind of it's something exclusive for stores and, that's helping driving traffic back in the into stores.

  And it's kind of like this virtual circle of just, like, used garments that are, given back. No. For sure. That seems like a great way to kinda give back, but also then still get the benefit of more people coming in the store potentially browsing and, you know, maybe making another purchase to replace what they're donating back.

  And kind of just a final question just asking, you know, what are you most excited about? What are you looking forward to in twenty twenty five? What do what do you think is gonna be happening kind of in the store in twenty twenty five? But, yeah, just kind of open to your thoughts on the future and, beyond twenty twenty five even as well.

  Well, I hope twenty twenty five is gonna be really exciting. I think we're seeing, recently, like, kind of changes in malls. Like, as you were saying, like, customer since the pandemic, they've kind of get more accustomed to shopping online. And that's where we're seeing, like, in general, malls are transforming and they're turning more and more shopping into an experience, like, giving this, hybrid elements.

  Like, you you would get a store, but it's also a cafe, and it's also maybe at night a digi set. And maybe next right next week, there is, like, a paddle thing where you can also get your smoothie and, like, it's almost a gym. And so I'm thinking that malls are becoming more and more like this, place or you don't have each store next to each other, but concept are really mixed. And that's what we're trying also to do at Tadrami is, like, bringing you, like, more an experience, and something you will remember than just, you know, a basic shop.

  Great. Great. Well, thank you so much for joining me today. I really appreciate your time.

  Thank you all for attending, and yeah. Thank you.