Millennials have been accused of killing everything from marriage to doorbells, napkins, breakfast cereal, and–gasp!—American cheese. Some brands are starting to fight back, though. They have realized that business as usual won’t fly anymore, and are shaking up their business models to compete in this brave new world—and a few are really, really good at it.
“Experience today is a younger generation’s currency”
Russell Wallach, president of Live Nation media and sponsorship, and Daniella Vitale, the CEO of Barneys New York, sat down at the Fast Company Innovation Festival this week to talk about their success in wooing young customers. Vitale reports that Barneys had a little soul searching to do in their pursuit of younger customers. They ended up ending their long-running Artisan Day program, and with a nod to the “drop” release method of streetwear brands that has hype beasts lining up in front of Supreme stores, they launched “The Drop.” It’s an experiential program and party where brands are launched, designers like Off-White’s Virgil Abloh and Fear of God’s Jerry Lorenzo mingled with fans, tattoos and piercings were on offer, and there were parties and panel discussions. It was very Instagram-friendly, which is just what they wanted. “Who better to tell your story than your fans or customers?” noted Vitale.
It was a bold move for the company, but they knew they needed to do something different to appeal to younger shoppers. “We wanted to experiment,” said Vitale. “We were willing to forfeit profitability and sales for an incredible experience. Experience today is a younger generation’s currency.” The risk paid off. Vitale said that they have seen a huge return on their investment, not only in retaining customers, but converting visitors to The Drop to valuable repeat customers, too.
While the retail-pocalypse continues, according to Vitale, Barneys is adamantly in the brick-and-mortar business, which was cemented by the success of The Drop. “You cannot do The Drop online. There are certain things you can’t do online that you can at the physical store,” she said. The Drop was so successful that Barneys took the concept to their Los Angeles outpost, too. “It shows that Barneys is not just a store, but a venue for creativity, for live music, for a discussion like this,” said Vitale. “People really want to experience something authentic.”
“Our fans are the biggest marketers of our products”
Live Nation is, of course, in the experience business. Their live shows, festivals, and music-based experiences are designed to appeal to fans willing to pony up for experiences, and for the chance to share those experiences with their friends and on social media. “Music fans are micro-influencers,” noted Wallach. “Our fans are the biggest marketers of our products.”
Wallach also noted that concerts and festivals are evolving “beyond just the music to include food and fashion podcasts” and are “one of the best places for brands to play, because it’s a captive audience.” They are working with companies to “weave brands into those experiences in an authentic way,” creating memorable immersive experiences that will appeal to customers. One notable example was setting up an LG laundry station at Bonnaroo where “you can have a cocktail while your laundry is being done for you.” “People walked away loving it,” said Wallach, and of course they were snapping photos of people in their robes at a music festival, sharing it on social media, and helping to build the brand. It was a wacky idea that paid off, which is exactly what was intended. “Brands need to invest in new ideas and brands need to invest in culture,” said Wallach. “It’s a long-term investment.”
Both brands are already looking ahead to the next generation of consumers, too. “Music transcends age,” said Wallach, urging the audience to “take your kids to concerts, please!” to ensure that music fandom starts young and never ends. As for Barneys, they learned their lessons. “Retail suffered for a number of years because we did not think about the younger audience fast enough. We focused on customers that were a little older, and we got in trouble for not recognizing that audience quickly enough,” said Vitale. “Now, we’ll be ready for what’s next.”