Big things are happening at Urban Outfitters, Inc., the company which heads brands like Anthropologie, Free People and of course the namesake Urban Outfitters. When I say ‘big’, I could be referencing a first quarter company profit increase of 72%, a one-year-old mobile commerce effort, or a brand with one of the highest per-square-foot revenue rates in retail. And there could be a multitude of reasons why URBN seems to be having a spectacular year, but the overarching theme of success at the company seems to be attributed to creativity first.
In light of the company’s success, we reached out to CEO Glen Senk for our next Talking With… profile. In the Q&A, Senk touches on how social media is changing word-of-mouth advertising, which retail brands he finds inspiring, and the key to staying profitable in a shaky economy.
Urban Outfitters, Inc. isn’t just one brand – it’s five brands that represent fashion, home goods and even garden under one large umbrella. What are the benefits and challenges of representing so many diverse brands?
The benefit is the diversity – I’m constantly inspired by the evolving and distinct voices in our company. Each brand is different, and compelling, and changing, and that keeps things very fresh and always interesting.
Of course, with diversity comes complexity, and it is a challenge to help each brand grow simultaneously in a way that’s specifically right for them and their customer. But that exact challenge is also what makes my job so fun.
During your keynote at Shop.org’s Annual Summit in September, you’ll talk about about how your company uses technologies to reach consumers in all channels. Can you offer one or two nuggets in advance that you’ll be discussing?
I’ll plan to talk about our evolution as a company – that is, how we started as a bricks and mortar operation and the process by which we entered new channels. I’ll also talk about why we value multichannel retailing, what it means to our customer, and I’ll dive into the operational philosophy that connects our stores, catalog, and web into one seamless user experience.
What are your opinions on social media and how – or if – it’s changing the game for retailers?
Social networking is word of mouth on steroids. Can you control word of mouth? It’s almost impossible. But we believe that if we do our job, if we’re constantly focused on wowing our customer, then we shouldn’t have to worry about controlling what he or she blogs or tweets or reviews or posts about us on Facebook.
Now, social media is a relatively new phenomenon and it does take some getting used to – for a long time, marketing was something that was thoughtfully crafted and carefully controlled. That approach still exists today, of course, but the web has created a degree of transparency that gives much more power to the consumer. As a company that loves its customer and values his and her opinion, we welcome that change enthusiastically.
A recent report by Forbes stated that revenue per square foot for Anthropologie stores has historically been one of the highest in the industry. What’s the secret to your success?
Although it’s a statistic I’m very proud of, we don’t go about it as a goal. Rather, we focus our energies on the customer experience: innovating, making beautiful products, really pushing the limits of our brand expression and constantly refining how we operate. Revenue per square foot is the result of that focus, rather than the starting point or motivation.
As a multichannel CEO, what’s your best piece of advice for managing the customer relationship at each touchpoint: in store, on the web and through communication channels?
The most important thing is to always put the customer first, regardless of the channel. As the CEO, it’s critical to communicate our values and our philosophy so that the information cascades to the individuals within each channel who actively engage in a dialog with the customer.
The recession has hit some retailers very hard, but in the first quarter of 2010, URBN posted a 72% profit increase. From a management perspective, what changes have you made throughout the past year that speak for the increase?
I think the key is that we hire people who embrace change. So when economic conditions necessitated fast, strategic maneuvering, everyone pulled together in remarkable fashion and exercised the financial discipline and creativity necessary to operate responsibly while continuing to amaze our customers.
We made changes to our inventory composition on a dime; we challenged our design, production, and buying teams to create styles our customer couldn’t help but fall in love with – we leveraged every facet of our business to streamline all of our processes, but also to let loose creatively. Everyone pitched in and, as a result, we more than weathered the storm, we flourished.
Which retail companies or other retail executives do you look to for inspiration?
I’ve read about a few recent design ventures that Urban Outfitters is undertaking including Space 15 Twenty, “a collaborative space where fashion, art and music collide.” You’ve also made changes to an Upper West Side store featuring the old school look of New York City retail. Talk about the concept behind these two ventures.
Part of the Urban Outfitters appeal, today and historically, is that no two stores are alike. We believe in change and we believe in honoring what’s special about a given geography or city. To a large extent, that’s precisely what those two store concepts are about: keeping things fresh, unique, unexpected, and right for where they are and what customers we hope will walk through the door.
What keeps you up at night?
I actually sleep pretty well, but this is a business in a constant state of change, and that kind of movement is, for me, a real source of excitement. So if I am awake at night, it’s likely because I’m excited about some new idea, or plan, or hire, rather than anxious.
What word do you hope comes to mind when customers think of the URBN customer experience?
Our customer base is so eclectic, as are our brands; it’s hard to pick a single word that I’d imagine every customer would associate with us. But I would hope that customers would describe us as genuine, engaged, smart, customer centric, personalized, and creative.
What’s the best piece of advice you can offer to someone beginning a career in retail?
Become indispensable, take risks, stay humble, and learn every aspect of the business.