It’s likely most of you know the founding story of Lilly Pulitzer.
How Lilly, married to Peter Pulitzer (the grandson of Joseph Pulitzer), started a juice stand in 1959 in Palm Beach, which was visited by society’s upper crust — ladies including Jackie Kennedy (with whom Lilly went to boarding school) and CZ Guest. How she was constantly spilling juice on her clothes, and asked her dressmaker to sew something to disguise the stains. How her dressmaker whipped up a brightly colored and comely shift, full of fine details. How her elite customers liked her juice, but loved her dress, and wanted their own. How Lilly started selling dresses at her juice stand, how Jackie Kennedy wore them to the Palm Beach Yacht Club, how the dresses were increasingly popular and Lilly ditched her juice stand for the dress business.
The rest, as they say, is history. Lilly dressed the best: the Kennedys, the Vanderbilts, the Pultizers, the Posts and so on. Her brightly colored patterns became the iconic symbol of resort high society that endures to this day.
But what you may not know is that in 1984, after 25 years, Lilly closed the business, and it lay dormant for 10 years before the rights to the trade name were purchased in 1993 by Scott Beaumont, co-CEO of Lilly Pulitzer, and his partner, co-CEO James Bradbeer Jr. The two industry veterans were “ready to take it on for the next generation,” said Beaumont, in a keynote presentation at Apparel’s Executive Forum, held recently in New Orleans. (Lilly Pulitzer is now owned by Oxford Industries, which purchased the company in 2010 for $60 million.)
Keeping the brand relevant has required staying modern on multiple fronts — the brand, the consumer, product, distribution and omnichannel, communications, and technology — all of which, said Beaumont, demand this: “Your company’s internal rate of change needs to exceed its external rate of change.”
Today’s external pace of change is swift, with “more changes in the past five years than the prior 30. … Consumers have much more power than they’ve ever had. … Changes in social media, the way information travels, e-commerce, digital — they really matter,” says Beaumont. The competitive environment is changing quickly and if your company’s internal rate of change is not faster, it will not succeed. Consider the failures of Kodak, he noted, which was a leader in photography, but didn’t keep up with the changes in digital, or Blackberry, which underestimated the impact of touchscreen.
“If your org chart looks the same as it did five years ago, if you’ve got the same people sitting at the same desks doing the same jobs, if your reporting systems look the same … for example, if your line items in advertising look the same as they did five years ago, if you don’t have line items for email marketing, SEO, social media, display advertising — your internal rate of change is not keeping up with the external rate of change, you’re losing ground, you’re falling behind.”
Make your brand position no. 1
Standing out in a competitive marketplace requires clear brand positioning that sets you apart from everyone else.
“Your brand positioning is why you exist. It’s what you do better than anybody else. It is your point of differentiation,” said Beaumont, pointing out that when Circuit City went out of business, it didn’t really matter, because you could get everything it offered at Best Buy.
While many apparel brands worry about losing market share and “dooming themselves” by not offering enough assortments in enough categories in enough seasons in enough markets, Lilly takes a position that might be described as ‘you can’t please everybody,’ and that’s crucial to building a successful brand.
“We have focus. We can be best in the world at Lilly’s resort chic. You have to be comfortable enough and courageous enough to have clear positioning that is focused and differentiated,” says Beaumont. Why? “Because consumers buy their No. 1 first favorite choice. They don’t by their fourth favorite. So when you’re structuring a business and positioning, you need to be the first choice to some rather than the fourth choice to many. … If you’re the best at something, the market is bigger than you think. That’s one of the things we learned.”
Beaumont likens this reasoning to competing in the Olympics: “You wouldn’t enter in all events. Nobody has won track and field and swimming.”
Modern consumers have access to so much information instantaneously, and they have the power, browsing on their phones, to select the best-in-class and “pull the trigger” on those transactions. “How do you get conversion rates up? You do that by being the best at something. This is really important. It takes a lot of guts. You have to define what you’re not going to do.”
Consider Perrier, which entered the U.S. bottled beverage market when it was an approximately $40 million business. In brand building, the company focused on very specific “one-in-a-hundred” events such as graduation ceremonies and weddings as the venues for its top-shelf product. “It’s okay to think that way,” said Beaumont. “Today it’s a $4 billion business.”
Grandma, mom, daughter: Am I seeing triple?
In a famous vintage photo by Slim Aarons, a group bedecked in Lilly poses casually in a semi-circle on a lush green lawn surrounded by palm trees. Those pictured span three generations, from kids to moms to grandmothers. “Lilly designed for multiple generations, and this really has become an important part of our ability to stay modern,” says Beaumont. “She gave us that gift.”
While most teenagers wouldn’t be caught dead wearing the same outfit that their moms wear, Lilly has somehow avoided this rebelliousness. Resort wear seems to have “multigenerational characteristics,” says Beaumont, with generations gathering together at the beach house, grandmothers buying it for their granddaughters, or moms shopping for Lilly with their teens. “Lilly is one of the few brands where multiple generations can wear it simultaneously and they all still think it’s cool.”
Lilly has embraced this multigenerational appeal, and it’s lucky to have it. Many apparel brands must target much more narrow consumer segments, say, a 35-year-old mom with a car seat. When you’re thinking about brand positioning, says Beaumont, one of your key decision points revolves around the question: do we stay with our existing customers as they age, or do we decide on the age group we want to serve and watch as customers enter and exit the brand? The former is a good strategy, he says, except it has an end point in about 20 years.
“Oldsmobile probably had that strategy. Talbots had parts of that strategy,” he noted. The latter can work well too, but you have to be good at attracting new customers. “They have different end games.”
Nothing beats excellent product
What is the most important component of the marketing mix? You guessed it. Product. And the philosophy that underpins your product development process is crucial because, says Beaumont, “it has a lot to do with how you end up.”
At Lilly, the philosophy is to be design-led. While the company stays well informed about merchandising, consumers, the competitive environment and activity in its distribution channels, “we don’t have the sales force design the line, and we don’t just look at what competitors are doing and knock it off. We are design-led. That’s one thing that helps to keep us modern and relevant.”
For example, the brand develops custom prints that it does not repeat. It focuses on newness, inspiration, vision and innovation.
Lilly also has found success by tightening assortments, which flies in the face of today’s common wisdom that you need to keep piling on the SKUs. “Actually not,” says Beaumont. “You need more excellence, not more assortment. You [only] need more assortment if it’s going to be excellent. It is easier to have an excellent product and get new customers for it than to sell B-minus product to your existing customers.”
When it comes to design, technology plays an important role. Lilly has adopted new processes, such as digital printing; it also follows strict alignment to product development calendar deadlines. “One of the keys to the business is the ability to manage multiple seasons simultaneously at different stages of development. We’ve always got four seasons going on. If you’re always focused on the one that’s selling, and you’re not doing your development work on the next one coming down the pipeline, you hit a dead end,” says Beaumont.
In fact, he’s convinced that the industry’s flash-in-the-pan apparel companies are not so much victims of the whims of fashion as victims of their inability to manage multiple seasons simultaneously under different stages of development. “Those product development calendar skills and disciplines are important. They help creative people. Structure can help creativity.”
Consumers don’t know the word “omnichannel,” they simply want to buy your brand where it’s convenient for them, and they want you to figure out all the channel stuff, says Beaumont.
One of the company’s biggest tech investments has been in its powerful back-end order management suite from Manhattan Associates, which allows the company to have a single pool of inventory. “People talk about that. It’s actually really hard. It gives us true omnichannel,” says Beaumont. “If somebody gets a gift certificate at the store and they want to apply on an e-comm purchase, those things are actually reasonably difficult if you have all separate systems.”
Next year the company will implement mobile point of sale. “We are going to be one of the first retailers that will have all direct-to-consumer orders, whether it’s mobile, e-comm, in-store or call center — as well as inventory — managed by one single order management system,” says Keary McNew, vice president, chief information and logistics officer. The system provides a 360-degree look at the consumer.
Lilly also has recently implemented a “very robust” cloud-based CRM platform with AgilOne, which provides consumer segmentation tools that can be used for direct mail and e-mail marketing campaign management, modern consumer reporting and analysis tools as well predictive analytics, such as propensity and behavioral modeling. “These enhanced capabilities have dramatically improved our company’s ability to communicate with our consumers in a very personalized manner,” says McNew.
Lilly — which started as a wholesaler — continues to wholesale to large department stores, smaller boutiques and about 100 independent Signature stores, while it also sells via its own direct retail stores and its web site, placing an emphasis on mobile, which in the past year grew to represent more than half of the traffic to e-comm. “It used to be you’d design for desktop and then translate down to mobile. Now it’s the other way,” says Beaumont. The company’s iOS mobile app, built with Prolific, allows Lilly’s “top customers to engage with the brand more easily.”
Lilly is also a master of social media — it got an early start from Lilly herself, with people hanging out at the juice stand gossiping. Today, it’s how everyone communicates, says Beaumont, especially Millennials, and Lilly plays on sites including Twitter, Instagram, Pinterest, Facebook and Snapchat.
“You need to keep up and keep going, and be both integrated and flexible,” says Beaumont. “There is no room for complacency. If you’re coasting, you’re going downhill. It’s an industry that moves fast. You’ve got to move with it,” he concludes.
Jordan K. Speer is editor in chief of Apparel. She can be reached at email@example.com.