Episode Summary:

In this episode of The Retail Pilot, Ken Pilot welcomes back Stephen Yalof, President and CEO of Tanger. With over 25 years of experience in the commercial real estate industry, Stephen shares insights into Tanger's growth strategies, the evolution of retail spaces, and how the company is adapting to changing consumer behaviors. From expanding into full-price lifestyle centers to enhancing customer experiences through digital innovation and loyalty programs, Stephen provides a comprehensive look at Tanger's journey and future direction.

Key Topics Discussed

1. Tanger’s Recent Successes

• Performance Highlights: Tanger achieved a 4.3% increase in net operating income (NOI) and a 97.4% occupancy rate. The company executed 543 leases covering 2.6 million square feet over the past year.
• Expansion Efforts: Recent acquisitions include The Promenade at Chenal in Little Rock, Arkansas, which features the only Apple Store in the state.

2. Growth Strategy

• Diversification: While maintaining its core outlet business, Tanger is expanding into full-price open-air lifestyle centers that include specialty stores, grocery anchors, and other amenities.
• Acquisition Focus: Stephen emphasized the importance of acquiring high-quality properties in strategic markets to leverage existing regional management teams.

3. Enhancing Customer Experience

• Tanger Club Loyalty Program: A tiered membership program offering discounts and perks for shoppers. Members can choose between free or paid memberships ($20 annually) for additional benefits.
• Digital Integration: Introduction of QR codes for real-time offers and digital savings passports, replacing outdated coupon books.
• Amenities and Entertainment: Investments in food offerings, gathering spaces, and entertainment options like pickleball courts to create a more engaging shopping experience.

4. Industry Trends

• Blending Physical and Digital Retail: Tanger is exploring e-commerce integration as part of its long-term strategy while using digital tools to enhance in-store experiences.
• Health & Beauty Brands: Increased presence of brands like Sephora and Ulta in outlet environments, offering regular-priced products alongside experiential services.

5. Leadership and Team Building

• Talent Development: Stephen emphasizes hiring complementary skill sets to address organizational blind spots and promoting from within to keep employees motivated.
• Communication Practices: Regular town halls, employee resource groups (ERGs), and an intranet ensure transparency and engagement across the organization.

6. Reflections on Leadership

• Lessons Learned: Stephen highlights the importance of "failing fast" to pivot quickly when strategies don’t work. He also stresses the value of building a strong team aligned with company goals.

Notable Quotes

• "Fail fast—if something doesn’t work, pivot quickly and move on." – Stephen Yalof
• "We’re lifestyle-izing our portfolio by adding food, beverage, amenities, and entertainment to enhance the customer experience." – Stephen Yalof
• "Our loyalty program is about understanding our customers better and providing them with personalized value." – Stephen Yalof

Connect with Us

• Stay updated on Tanger’s latest developments:Website: Tanger
• Follow The Retail Pilot for more insightful conversations with industry leaders!

In this episode of The Retail Pilot, host Ken Pilot sits down first in a Pre-Flight conversation with Simeon Siegel, Senior Retail Analyst for BMO Capital Markets, to discuss the state of the Retail market both post-election and leading into the holiday season.

For the main Flight, Ken speaks with Rachelle Hruska MacPherson, founder of the fashion brand Lingua Franca. Rachelle shares the unexpected journey that led her to create a company known for its hand-embroidered cashmere sweaters and socially conscious messaging.

Origins of Lingua Franca

• Rachelle started the company unexpectedly in 2016 while dealing with stress from her previous business
• The idea came from embroidering "booyah" on an old sweater as a therapeutic exercise
• Early success came from a viral "I Miss Barack" sweater after the 2016 election

Business Growth and Model

• Lingua Franca offers custom embroidery on cashmere and cotton items
• The company has expanded into ready-to-wear clothing and collaborations
• Current revenue is under $30 million, with 60-70% from direct-to-consumer sales

Product and Pricing

• Cashmere sweaters with embroidery retail for around $380
• Cotton items start at $150, opening up a new market segment
• Custom embroidery is available in stores and through an online customizer

Marketing and Collaborations

• Growth has been largely organic, with minimal traditional marketing
• Collaborations with celebrities, artists, and brands have been key to expansion
• Upcoming collaborations include Wicked and Gilmore Girls

Challenges and Future Plans

• Rachelle discusses the difficulties of scaling while maintaining brand authenticity
• She emphasizes the importance of product quality and customer service
• The company is exploring new marketing strategies, including digital advertising

Personal Insights

• Rachelle shares her favorite travel destinations and TV shows
• She discusses the importance of mentorship and community in the fashion industry

The episode provides an in-depth look at how Lingua Franca has grown from a personal project into a socially conscious fashion brand, navigating the challenges of scaling while maintaining its core values and unique positioning in the market.

In this episode of The Retail Pilot, host Ken Pilot welcomes Jan Rogers Kniffen, CEO of J Rogers Kniffen Worldwide and retail industry expert, to discuss the current state and future of retail. Key Topics Discussed: Post-Election Retail Bounce

• Jan predicts a post-election retail bounce, as seen in previous presidential election years
• Discretionary retail is currently running at zero inflation, making it attractive to consumers

Fourth Quarter Outlook

• Despite potential headwinds, Jan expects a strong fourth quarter
• Forecasts 3.5-4% sales growth, similar to last year
• Believes discretionary goods will perform well due to their perceived value compared to inflating services

Walmart vs. Target

• Walmart is outperforming Target significantly
• Walmart is attracting higher-income customers, traditionally Target's demographic
• Walmart's focus on in-store experience and competitive pricing is paying off

Off-Price Retail Sector

• TJ Maxx ranked as the fifth-best retailer in America by Jan
• Concerns about over-saturation in the off-price sector
• Potential challenges for off-price retailers as the market matures

Department Store Future

• Predicts most department stores will go private by the end of 2026
• Cites lower interest rates and increased real estate values as factors facilitating buyouts
• Mentions Nordstrom, Macy's, and Kohl's as potential candidates for privatization

Tariffs and Manufacturing

• Discussion on the impact of potential tariffs, especially on goods from China
• Many retailers have already reduced their exposure to Chinese manufacturing
• Predicts that moderate tariff increases might be absorbed by Chinese manufacturers rather than passed on to consumers

Notable Quotes:

"May the bounce be with you." - Jan Rogers Kniffen on the post-election retail bounce

"I think it's come down to who can do this stuff as opposed to where you happen to be." - Jan Rogers Kniffen on retail performance

Closing Thoughts:

Jan expresses optimism for the retail sector going into the fourth quarter and 2025, despite potential challenges. He emphasizes the importance of execution and adaptation in the evolving retail landscape.

On this episode of The Retail Pilot podcast, Ken speaks with Nick Green, Co-Founder & CEO of Thrive Market, a membership-based online platform that makes healthy and sustainable living easy and affordable to all. Nick launched Thrive 10 years ago shortly after graduating from Harvard.

The business has also been recognized as a leader in regenerative agriculture, carbon-neutral shipping, and Zero Waste operations, and in 2020 became the nation’s largest grocer to receive B Corp Certification.

Outside of Thrive Market, Nick lives in Venice, CA with his wife, Carolina, and their three children.

Key Points

About Thrive Market: An online retailer offering natural and organic products at affordable prices through a membership model1

Mission: Making healthy and sustainable living easy, affordable, and accessible to all1

Business Model: $60 annual membership fee

• Curated assortment of natural and organic products
• AI-powered personalization
• Zero-waste fulfillment and carbon-neutral shipping

Company Stats

• Founded: 10 years ago
• Members: 1.5 million
• Annual Sales: Over half a billion dollars
• Profitability: Now profitable and cash flow positive1

Nick Green's Background

• Grew up in Minneapolis with a health-conscious mother
• Previously founded and sold an education company
• Met co-founder Gunnar, who grew up on a hippie commune

Business Strategy

• Product Mix: 90% third-party brands
• 10% Thrive Market branded products (generating 25% of sales)
• Private Label Strategy: Focus on filling gaps in the catalog rather than copying existing products1
• Margin Profile: Strong margins on both private label and third-party products
• Sustainability: Zero-waste fulfillment centers, carbon-neutral shipping

Marketing Strategy

• Referrals: 25% of new members come from existing member referrals
• Influencer Marketing: Unique approach to partnerships
• Digital Marketing: Leveraging technology for personalized experiences

Future Outlook

• Focus on expanding online presence rather than immediate brick-and-mortar plans
• Potential for future physical stores, but not a current priority
• Continued investment in AI and personalization technologies

Competitive Advantage

• Purpose-built for healthy living
• Membership model driving profitability and customer behavior
• Technology-first approach to e-commerce
• Strong focus on sustainability and ethical supply chains

Ken Pilot interviews Oliver Chen for this flight of The Retail Pilot podcast.

Oliver Chen is a Managing Director and senior equity research analyst covering retail and luxury goods at TD Cowen.  His deep understanding of the consumer and his ability to forecast the latest trends and technological changes that will impact the retail space have set him apart from peers.

Prior to joining TD Cowen in 2014, he spent seven years at Citigroup, worked in the investment research division at UBS, in the global mergers and acquisitions/strategic planning group at PepsiCo International, and in JPMorgan’s consumer products/retail mergers and acquisitions group.

Oliver holds a bachelor of science degree from Georgetown University, an MBA from the Wharton School at the University of Pennsylvania, and is a CFA charterholder.

His passion for the sector began at the age of 12 when he began working with his parents at their retail business in Natchitoches, Louisiana.

Summary:

In this conversation, Oliver Chen discusses the current state of luxury retail and the beauty sector, highlighting the challenges and opportunities faced by brands. He emphasizes the importance of pricing strategies, the impact of digital transformation, and the need for brands to connect with younger consumers. The discussion also covers emerging trends in fragrance, the potential of the men's beauty market, and the role of AI in enhancing the retail experience.

Key Takeaways:

• Luxury retail is facing an inflection point with declining sales.
• China's economic factors are influencing luxury spending.
• LVMH's strong brand portfolio positions it well in the market.
• Hermes thrives due to its timeless luxury appeal.
• Luxury brands are increasingly focusing on direct-to-consumer sales.
• Ralph Lauren's success is attributed to its cultural relevance and value perception.
• Fragrance is a growing category with opportunities for premiumization.
• The men's beauty market is still developing but shows potential.
• TikTok is becoming a significant platform for beauty brands.
• AI is set to transform the retail experience through personalized search.

Ken Pilot interviews Shai Eisenman, CEO and Founder of Bubble, on this episode of The Retail Pilot Podcast. Bubble Skincare is the first modern, affordable, science-backed skincare line formulated to clean, balance and hydrate young skin all for under $20. Today, the Bubble line consists of 20+ products that work together to create a complete routine from face cleansers to face masks. Bubble products are available on hellobubble.com, in over 16,000 retail locations across the US, Austrailia and the UK including Boots, Beauty Bay, CVS Walmart and Ulta stores.

Prior to starting Bubble in 2018, Eisenman started her B.A. at 15, and began her career in business at 16 years old. She lives in New York with her partner and two children. 

Key Points:

• Shai started Bubble after an early start in academics and entrepreneurship
• Bubble focuses on affordable, high-quality skincare products for younger consumers
• The company built a community of 4,600 Gen Z advisors before launching
• Bubble now has over 50,000 brand ambassadors who provide input on all decisions
• Products are priced affordably (around $15) but with prestige-level quality
• Initially launched D2C but quickly pivoted to retail partnerships
• Now available in 13,000 U.S. stores including Walmart, Ulta, CVS, and Amazon
• Recently expanded to the UK (Boots) and Australia (Priceline)

Business Strategy:

• Focused on margin dollars rather than margin percentage
• Found retail partnerships more profitable than D2C for their price point
• Invests in physical experiences and grassroots marketing over traditional advertising
• Collaborates with brands like Disney to reach new audiences
• Raised capital primarily from individuals and early-stage funds
• Aims to be profitable and not reliant on external funding

Community Engagement:

• Uses multiple platforms to communicate with brand ambassadors
• Offers gift cards and commissions to ambassadors
• Runs college campus programs with exclusive merchandise
• Involves community in product development, naming, and marketing decisions

Challenges and Growth:

• Adapting leadership style and operations as the company scales
• Expanding internationally while remaining an independent brand
• Balancing control over brand experience with benefits of retail partnerships

Leadership Insights:

• Values building a strong team and fostering community
• Relies on experienced advisors for guidance in different growth stages
• Emphasizes the importance of adapting to different business stages

In this episode of the Retail Pilot Podcast, Ken Pilot engages with retail legend Mickey Drexler, discussing the current state of retail, pricing trends, and the importance of customer experience. Drexler shares insights from his journey at Alex Mill, emphasizing the significance of quality, team dynamics, and the evolving landscape of retail. The conversation also features Ali Dillon, the President of Alex Mill, Alex Drexler, Founder, and Creative Director, Somsack Sikhounmuong, who discuss their roles and the brand's vision, highlighting the importance of community and innovative marketing strategies.

Key Takeaways Include:

Recent Success: Alex Mill has experienced strong sales performance attributed to changes in merchandising and management.

Product Focus: Sweaters and denim are particularly successful categories for Alex Mill, with emphasis on fit and quality.

Retail Strategy: Alex Mill follows a "less is more" approach, focusing on smaller store sizes and selective expansion.

Marketing Channels: Instagram is a primary driver of brand awareness, with the company also exploring TikTok marketing.

Expansion Plans: Alex Mill is planning to open a new store in Rockefeller Center, aiming for an early November launch.

Customer Acquisition: Word-of-mouth marketing plays a crucial role in the brand's growth and recognition.

Product Diversity: Mickey emphasizes the importance of offering multiple color options for key items to create visual impact and customer appeal. Sustainability and reworking products can also create new opportunities.

Team Dynamics: A strong, diverse team is critical for successful product execution and business operations.

Ken Pilot interviews Simeon Siegel, MD and Senior Analyst, Retail & eCommerce for BMO Capital Markets, for this Flight of The Retail Pilot Podcast

Overview: In this episode, leading retail analyst Simeon Siegel returns to discuss the current state of the retail sector, emphasizing the importance of execution in a challenging economic environment.

• Key Topics: Simeon's Role: Simeon explains his work as a retail analyst, helping investors understand which companies are performing well and which are struggling. He covers 20-30 companies and provides ratings such as outperform, underperform, and market perform.
• Current Retail Climate: The year has been progressively challenging for retail, with lingering effects from the pandemic. While some sectors are struggling, others are thriving, highlighting a divergence between winners and losers in the market.
• Luxury Market Trends: The luxury sector is experiencing pressure for the first time in years, with growth slowing from 8% to 4%. Despite this, some brands like Prada and Hermes continue to perform well.
• Execution Matters: The conversation emphasizes that execution is key in today's market. Companies that adapt and perform well are gaining market share, while larger, established brands face challenges.
• Consumer Health: Despite concerns about credit card debt and inflation, the U.S. consumer remains resilient. Retailers need to balance promotions and marketing to maintain brand value while driving sales.
• Technology Investments: As retailers navigate challenges, there is a focus on investing in technology that enhances both online and in-store experiences. The importance of inventory management and customer engagement is highlighted.
• Winners in Retail: Companies like TJX are noted for their strong performance due to their unique value propositions for both consumers and vendors. Other brands showing potential include Nike, despite recent struggles.

Conclusion: The episode wraps up with reflections on the evolving retail landscape, emphasizing the need for brands to adapt strategically to maintain relevance and profitability amidst changing consumer behaviors and economic conditions.

Listen for More: Tune in for deeper insights into retail trends and expert analysis from Simeon Siegel!

In this episode of The Retail Pilot - Tech Talk, Ken Pilot speaks with Vic Drabicky and Josh Krepon about performance marketing in the Retail/Fashion Industry.

Summary

In this conversation, Vic Drabicky, CEO and founder of January Digital, and Josh Krepon, President of US D2C and Global Digital at Steve Madden, discuss the current state of performance marketing and the importance of balancing algorithmic marketing with inspirational and influential marketing. They also touch on the challenges of creating and managing content, the role of video in marketing, and the rise of TikTok shops. The conversation covers various topics related to retail and marketing, including the impact of consumer behavior shifts, the role of video commerce, the importance of collaborations and influencers, the use of MarTech in loyalty and data management, and the potential impact of the election on the retail environment.

Key Takeaways

• Performance marketing has dominated the marketing landscape in the past decade, but brands now need to find a balance between algorithmic marketing and inspirational/influential marketing.
• Creating and managing content can be challenging, and brands need to strike a balance between volume and quality.
• Video marketing is becoming increasingly important, and brands need to adapt to the changing landscape of platforms like TikTok.
• The rise of TikTok shops and partnerships with platforms like Amazon indicate that video commerce is on the horizon. Consumer behavior takes time to shift, and it may not always align with predictions or trends.
• Video commerce is a growing trend, but it may take a long time for people to change their behaviors and adopt it on a large scale.
• Collaborations and partnerships with influencers or other brands can be successful if they are authentic, aligned with the brand's values, and provide value to the customers.
• MarTech tools can be used for retention and loyalty programs, as well as data management and analysis.
• The outcome of the election can impact the retail environment, with consistency and confidence being important factors for stability and growth.

Ken Pilot interviews Mike Natenshon, Founder of Marine Layer, for this episode of The Retail Pilot Podcast.

Mike Natenshon started Marine Layer the day after his girlfriend threw away his favorite shirt. In the ensuing 10 years, Marine Layer has grown into a complete California-inspired lifestyle brand delivering new favorite shirts to wherever their customers are. Although considered 'digital first' Marine Layer operates 50 stores and two 1969 VW buses nationwide.

Summary

MarineLayer is a retail brand that started as an online t-shirt company and later expanded to brick-and-mortar stores. The company focuses on creating high-quality, comfortable clothing for men and women. They have a balanced distribution model, with 60% of sales coming from retail stores, 40% from direct-to-consumer online sales, and a small percentage from wholesale.

MarineLayer has been able to maintain profitability and grow steadily by taking a measured approach to expansion and focusing on building a strong brand. They have plans to continue growing all three distribution channels and are considering international expansion in the future.

Marine Layer is a brand that focuses on creating comfortable and casual clothing for both men and women. The stores are designed to feel like a room in your home, with a familiar and intimate atmosphere.

The company has a program called Respun, which is an upcycling initiative that collects old t-shirts and finds new uses for them. They offer customers a recycling bag and a credit towards future purchases.

In terms of marketing, Marine Layer uses paid social media advertising on platforms like Instagram and TikTok, as well as catalogs. They have also explored connected TV advertising but found it to be expensive and not as targeted as other channels.

In terms of technology, Marine Layer has invested in Endless Isle, which allows them to share inventory across channels and provide a seamless customer experience. They are also exploring the use of AI for customer analytics and predictive product merchandising.

As a leader, Mike is focused on protecting the company's culture and maintaining a fun and collaborative work environment. Marine Layer operates on a hybrid work model, with employees working three days in the office and two days remotely. Mike's favorite Marine Layer item is a t-shirt that he has worn for the births of both of his daughters.

Takeaways

• MarineLayer started as an online t-shirt company and later expanded to brick-and-mortar stores.
• They have a balanced distribution model, with 60% of sales from retail stores, 40% from online sales, and a small percentage from wholesale.
• The company focuses on creating high-quality, comfortable clothing for men and women.
• MarineLayer has been able to maintain profitability and grow steadily by taking a measured approach to expansion and focusing on building a strong brand.
• They have plans to continue growing all three distribution channels and are considering international expansion in the future. Marine Layer focuses on creating comfortable and casual clothing for both men and women.
• The stores are designed to feel like a room in your home, with a familiar and intimate atmosphere.
• Respun is Marine Layer's upcycling program that collects old t-shirts and finds new uses for them.
• Marine Layer uses paid social media advertising and catalogs for marketing.
• They have invested in technology like Endless Isle for seamless inventory management and are exploring the use of AI for customer analytics.
• Mike is focused on protecting the company's culture and maintaining a fun and collaborative work environment.
• Marine Layer operates on a hybrid work model, with employees working three days in the office and two days remotely.