Eight months ago, retailers were in survival mode. Given the shutdowns and consumer fears, they concentrated their efforts on e-commerce by enhancing their websites, engaging with customers via Instagram and honing their newly acquired Zoom skills. And in the process, they amassed a lot of information.
In October, the Fashion Group International (FGI) assembled a panel of industry experts to examine the benefits of gathering, leveraging and using data-driven information while minimizing risks to privacy and liability.
Tiffany Stevens, CEO and chief counsel of the Jewelers Vigilance Committee (JVC), served as moderator of the “D2C Edge! Holiday Preparation and Protection” session. On the panel were Greg Kwiat, CEO of Kwiat and Fred Leighton; Lele Sadoughi, founder and designer at Lele Sadoughi; and Jeremy D. Rine, vice president and associate general counsel of Signet Jewelers.
Stevens: How have you pivoted since the pandemic started?
Kwiat: We had already enhanced our website experience to work seamlessly with our in-store experience and to provide our customer base with the same high-quality service they get in the store. But we recognized that our online business was going to be crucial to making sure we were heading in the right direction. We immediately implemented some concepts to drive sales, including creating an online private sale for our clients in support of White Plains Hospital [in New York]. We reached out to clients with special pricing and told them we would make a significant donation to the hospital. People wanted to be supportive even when they were in a [lockdown] moment.
Sadoughi: I think of it more as changing course rather than pivoting. We expanded our assortment to include masks, which was great for our business and for customer acquisition. We even made headbands with buttons, making it easier for frontline workers to use them and maybe bringing a smile to their faces with something stylish.
Before the pandemic, we never did Zoom and Instagram Live. Social media let us deliver our messages: Who is this brand? What do they represent? We found out what was working. A high engagement rate is really rewarding to a small business owner.
Rine: The biggest challenge is that Covid-19 accelerated the use of new technology to interact with customers in a different way and leverage data differently. You had to quickly find creative solutions to be able to get in front of your customer when all your stores were closed.
Whether it’s a new technology or using data in a new way or providing analytics, someone else is doing that function. As a result, your private information — and that of your customers — could be stored in a third-party provider’s cloud network.
When working with third parties — vendors, technology providers, hosting services — you have to ask where the data is stored and how is it being used. The answer should always be that it is not used for any third-party purpose. You also need an exit plan for the return of data when that contract expires.
A privacy policy is essential. If you’re not following that policy, then you are creating risk. This also applies to brick and mortar.
Stevens: What do you do with customer data?
Kwiat: We don’t store highly sensitive data, including social security number or credit card information. There’s no reason for it.
It’s important to pick your vendors and partners wisely, including credit card processors, analytic providers and website developers, to ensure they share your approach to the care and safeguarding of your information. This is not a headline you want — that you are the cause of an information leak.
Sadoughi: What I did yesterday is not what I’m doing today. Data is helping us be more responsive. Our focus on targeted research helps to direct our ad spend. You can’t wait for someone to come in the door. We use the data to go after the people we believe are our customers, including doing niche marketing with our top customers.
Rine: Data and privacy laws are not getting laxer; it’s probably the opposite. The California Consumer Privacy Act (CCPA) is considered to be the leader. People doing business in the European Union must comply with the General Data Protection Regulation (GDPR). There’s another buzzword — privacy by design. Consider privacy in parallel with innovation. It’s a lot harder to unwind 10 steps down the road.
These issues will become more and more central to everyone’s business. The pandemic made it painfully obvious that even if the store is not open, how you reach the customer, and the broader relationships created, are going to grow in importance in coming years.
Stevens: What is the biggest challenge that is facing you heading into the holiday season?
Kwiat: Given that we sell at higher price points, fraud is an issue.
Sadoughi: Since we’re at a lower price point, it’s a volume game. [The higher shipping volume] increases the damage/loss/stolen ratio.
Rine: From a legal perspective, speed becomes an issue. What would have taken weeks [for example, when it comes to vetting a new technology provider] is now on a shortened timeline. If you’re looking to do something new and cool, get your legal team involved early in the process [so it can determine liability and any necessary data security protections]. It’s better to be part of the solution than the problem.
Stevens: Any predictions for the holiday?
Kwiat: The last two months have shown that there is real life in our market. People are still celebrating. After 9/11, the market was strong. People had a chance to pause and think, “If not now, when?” Things are crazy and unpredictable, but I’m looking at the bright side.
Sadoughi: I’m really optimistic. We had a record few months. If I were a shoe designer, I’d be hesitant about the season. But if you have a product or service that resonates with what people are feeling or doing today, there are amazing opportunities ahead.
Rine: While I’m not directly involved in sales, the holiday is going to be a time to see what is working in this new environment. There will still be a push to innovate. Some of these things are going to stick, whether [or not] we ever go back to normal.
jvclegal.org; fgi.orgArticle from the Rapaport Magazine - November 2020. To subscribe click here.