In the highly competitive retail space, digitization is about optimizing all channels in order to be accessible to customers, as well as having first-party data accessible internally in order to offer a personalized experience for each shopper. Ultimately, those brands that aren’t updating their web presence or their data management are leaving money on the table. There are perhaps some luxury labels so well recognized and coveted by consumers that they can consider themselves immune for the time being. But how many are there, and how much more would their customers be willing to spend if they received the right precisely-timed personalized message from their favorite shop?
At Lion Capital, a London and Los Angeles-based private equity firm, SVP digital Jeremy Muras searches for promising designers and ways to move them forward in digitization. He draws on experience in digital and retail, including eight years at Burberry. Lion Capital is one of the first niche PE firms focusing on consumer goods in fashion, as well as food and beverages, with early investments in Jimmy Choo and Kettle Foods (ie, Kettle Chips).
“What we typically look for are brands whose digital presence is something that can be leveraged to support the brand and drive the consumer component of the brand,” Muras told me. He added that regardless of whether a designer is primarily a wholesaler, or has a substantial in-store presence, the key is to centralize the data and use it to develop a balanced approach.
“Fundamentally, we believe brands have to have balance,” Muras said. “More importantly, it’s about owning the consumer data. Platform experience is increasingly built around personalization, and, also, off-platform, driving consumers through customer-centric messaging, using customer data, CDPs (customer data platforms), leveraging those tools.”
He added, “It’s very common to see brands with a reasonable amount of data, but they don’t have it in a centralized place. It’s either in their eCommerce platform, at point-of-sale, but they certainly don’t have it in the right sort of shape to drive valuable decision making. At the organizational level, there’s silos.”
To help digitize two recent investments, Paige Denim and All Saints, Lion Capital called on customer experience specialist Bloomreach, which recently announced Bloomreach Experience (brX), an experience solution for retailers, brands, distributors and manufacturers.
According to Muras, Paige Denim has a loyal following and a passionate founder, Paige Adams-Geller. Its revenue is also over 90 percent wholesale, which translates into a big opportunity to develop the customer experience. Known for the attractive look and comfort of its apparel, but primarily among women, Paige Denim also looks to gain more awareness of its men’s offerings.
“If you look at it, there are a number of denim lifestyle brands that are predominantly wholesale,” Muras explained. “And if you want to build out the DTC business, because all these brands are trying to do that, how do you differentiate, besides with the product, which hopefully speaks for itself?”
“With Paige Denim, the differentiator is its designer, Paige herself, who is very authentic and one of the central figures for the last number of years,” Muras said. “Paige is famous for its fit and the technological nature of its products and comfort. But it’s a hard story to tell online, so we’re working to build out experiences using Bloomreach to create these digital environments.”
Bloomreach began 10 years ago with a team of people from Google. CEO and founder Raj De Datta told me that in the economics of digital business, “experience is the way forward.”
He explained, “What’s interesting is that the worlds of digital and offline are merging. Digital marketing isn’t just responsible for eCommerce but a (real-world or in-store) kiosk is powered by digital, too. These are all digital touchpoints. The store of the future is as much a place to market products as to sell products. To allow customers to see something in-store and then to buy it online is the goal of a multi-channel business. You see this even with online pure-play businesses opening stores.”
For Bloomreach, De Datta sees commerce as distinct from retail. Commerce includes manufacturers and distributors on the B2B side, who also have a role to play in experience. “We’re seeing just an explosion, all of these players who are reinventing digital experience in the process.”
Lion Capital is just beginning to lay out the next stages for Paige Denim. Algorithms are starting to understand how consumers are engaging with the brand’s platform, allowing a very lean team to focus on certain customer experience issues, while “machines do the heavy lifting,” Muras said. By automating these functions and creating content that fits the brand’s message, a brand like Paige Denim can follow a general template that can continue to scale in the same way as previous Lion Capital investments.
“Our brands typically have been reasonably good at representing themselves to their customers, and continue to provide services and loyalty,” Muras stated.