This interview is part of BoF’s State of Fashion 2018 report, published in partnership with McKinsey & Company. For more insights into the challenges and opportunities that lie ahead for the global fashion industry, download the report here.
NEW YORK, United States — Since launching her self titled label in 2004, Tory Burch has built a billion-dollar business from what began as a modest accessible luxury clothing and accessories line. With social responsibility and innovation at the core of company's beliefs, Burch now has more than 3000 stockists and 150 boutiques worldwide.
BoF: It seems everything is changing in the fashion industry — especially the consumer.
Tory Burch: Yes, over the years the customer has changed. Before, it used to be the department stores who were in charge; now the customer is charge because technology has really given the customer access to so much information. They're really determining what is relevant. They have high expectations with customer service. They have high expectations with product. They have high expectations with cost and they can go on an app and compare pricing, globally, instantaneously. She has more knowledge and is more savvy than she has ever been.
BoF: What are the most noticeable elements of change in your own customers and the way they interact with the brand, the way they engage with your product?
TB: Today they're coming in and they know what they want. If they're coming into the store, they're coming in with an editorial or with an idea of what they want. They're definitely shopping online. I launched e-commerce 13 years ago; now it's 22 percent of our business. They're shopping online, at all hours of the day, but they are more purposeful in their shopping. What's interesting is getting a customer into the store and showing them things that they weren't necessarily coming in to buy. I think that's really about some of the interesting clienteling we're doing.
I started the company to start a foundation. Thirteen years ago people told me never to say the two in the same sentence. Customers today want businesses with purpose – this is a huge shift and something that obviously I'm very happy about because I've been talking about it since I started the company. Really our foundation attracts people who want to work [with us]. It's great for our employees, it's great for the customer and so it's good for the [bottom line]. That's a big change and certainly, from a Millennial standpoint, that's what they care about. But it's also trickling up as well. There's so much chaos in the world, people want to believe they're buying something that actually has some sort of end result of doing something for other people.
BoF: How has it changed the way you work now, in terms of the way you work with your teams or the way you think about developing product?
TB: It has to have integrity. If my name is on it, we have to protect the logo, the customer experience. So everything that we're designing and putting out in the market, we want to be proud of. That's always been the case, but even more so now because less product is going in the market. We've edited lines pretty dramatically and it's much more focused. I think customers like that focus. All the promotions and the outlets — that’s not something that I'm interested in. We’re very long term in the way we look at our business.
BoF: The off-price sector is actually one of the areas of the industry that's continuing to grow, but, as you say, it can have negative long-term implications.
TB: Our biggest focus right now is full-price selling. That’s something a lot of brands are not focusing on. We’ve actually pulled back on the business over the last three years, overturned every rock and invested in the business to actually have growth — but the right long-term, healthy growth. We’ve always been careful, but it gets away with you at times.
BoF: So if you're not opening tonnes of stores, you're scaling back product and you're being really cautious about the off-price channel, where are the growth opportunities as you look ahead to 2018?
TB: There's plenty of room for growth within e-commerce and new customer acquisition. Most of our e-commerce business is in the US, so when you think of China, it’s a massive market for us. We haven’t had to close any stores because we've been really careful about our distribution; we are really set up for tremendous growth there. We also have enormous potential in Europe.
We pulled back ready-to-wear because I wasn't excited about the way it was looking in some of our wholesale partners or just in general. I wanted it to be much more focused. Now our ready-to-wear is on fire; it's super exciting.
BoF: Speaking of wholesale, what’s your view of the department store channel?
TB: I get very passionate about the work we've done over the last three years. But being a company in between contemporary and designer, no one from a wholesale channel knew where to put us. Wholesale is now looking for innovation, they need it, right? How do we control the way we look? How do we help build their business? In a way, if I were to make a recommendation to wholesalers, they should become real estate agents and allow the brands to take over, do the concept, “shop in shops,” and then create areas for entertainment in their stores.
They need to radically change or it's over for them. They should understand that brands know their brands better than anyone. So when you have a young team of buyers cherry-picking a line and putting it together, it's not inspiring and it's not inspiring for the customer either. We know what sells the best, so we're really taking ownership in wholesale now, too, and partnering with them in a very different kind of way.
BoF: The last topic that I wanted to explore further with you was around innovation. How are you thinking about that?
TB: Innovation is everything. We've always been interested in innovation, so now it's like: how do we continue the innovation, but in a more fast-paced way. We launched with a retail concept, which was unheard of. We launched with e-commerce, which was unheard of. We started the first concept of an online magazine 10 years ago, which became the idea of a blog. We adapted every kind of social media and PR to help build the brand without advertising. So, how do we continue to innovate but in a way that's addressing what's happening in the macro-world now? A lot of people have old mindsets and that just doesn't work here. If people want to [stick with] the classic way of thinking about retail or the classic way of thinking about wholesale, it's just not going to work in this company.
In our company, less is more. Less product with more integrity. We took footwear in-house, so we're in full control of that. How do we expand our reach to the Chinese customer, whether it's through WeChat or bringing Tory Daily in China? That's something we're doing. How do we engage with local people more in each of the places [where] we are? We're very proud to be an American brand but I think we're a bit atypical for an American brand because we have a much more global outlook.
How do we stand for something in messaging, without it becoming political (because that's just a no-win)? We want to have substance — for issues I care about. I can't help myself and that will never change. I think people like that authenticity about me. We are trying to look at the world as a smaller place because it is. How do we synergise the idea of our e-commerce with our stores and with our customer more, in a global way?
This interview has been edited and condensed.