“Transformation” may be an oft if not overused word in retail today, but that doesn’t make it any less relevant. In The Lead Summit panel “Strategies for Transforming Legacy Brands for a New Generation of Consumer,” executives from The Children’s Place and the MoMA Design Store — two legacy retailers with substantially different brand DNA — took the stage to discuss how they are adapting their respective businesses to stay relevant with today’s changing consumer.
“The word transformation is definitely overused, because what we’re really doing is adapting,” Kiera Gannan, SVP, head of merchandising, The Children’s Place, told moderator Richard Kestenbaum, a partner at Triangle Capital. “We transform every day, but there is an intentional approach that can happen cross-functionally through leadership when you’re really trying to focus on something new. Whether that’s becoming more omnichannel, divesting distribution or finding new consumers.”
For the 57-year-old legacy retailer The Children’s Place that’s “gone through a lot of hills and valleys in terms of what we want to be when we grow up,” transformation means “focusing on the journey,” said Gannan, referencing both the child who is growing from newborn through size 16, and for today’s mom who has evolved to be more focused on values and transparency. “Today, it’s less about just shopping where it is convenient,” she said. Brand and store messaging must be constant—and consistent—across all channels.
While an omnichannel retailer, The Children’s Place had deprioritized its store fleet, pursuing a “shrink to grow” strategy in physical retail over the past several years. But as consumer behavior has shifted toward more in-store shopping, the company is now “re-emphasizing physical stores” and reinvesting in its existing footprint. “We’ve been laser focused on investing in e-commerce and our pure-play partners, and now we recognize the need to complete that 360-degree loop for our customer, so when she’s shopping, she has all of the opportunities,” Gannan said.
The 37-year-old, art- and design-inspired MoMA Design Store is also emphasizing its physical stores. But while the uptown Manhattan location is across the street from the MoMA Museum, and product is approved by MoMA’s curatorial department, the retailer is emphatically “not a gift shop.” The fact that it has an online business, plus a downtown SoHo location and stores in Korea and Japan—all far from the museum itself—underscores how the legacy brand stands on its own.
“‘Exit through the gift shop’ is not a growth strategy,” emphasized Jesse Goldstine, chief retail officer, MoMA Design Store. “In any given year, we may bring 2.7 to 3 million visitors to the museum, but that leaves billions of people that are not able to connect with MoMA on 53rd Street.”
Success is also about preserving the DNA of the brand across channels, and The MoMA Design Store has taken that mission to heart. The SoHo store is miles away from the museum, but it resides in a foundationally artsy neighborhood. So the store began working with artists on in-store murals, turning the store into a “museum destination” in its own right. Rotating the artists and the murals keeps shoppers coming back to enjoy a fresh art/shopping experience.
Licensing has been another way for the MoMA Design Store to bring its brand beyond the store’s four walls and website. And while museums might count attendance as a metric of success, the MoMA Design Store focuses on transactions.
“Licensing is great—leveraging partnerships with other global brands. So of course as a retailer we think about revenue, but transactions and royalty reports from our licenses are a really big deal for us,” said Goldstine. As an art-based concept store, the MoMA Design Store is also laser-focused on exclusives that can’t be found elsewhere, giving it it a unique edge in retail world often mired in sameness.
Don’t Make Assumptions
Brands and retailers undergoing transformation also need to check their assumptions at the door, as they are often proven incorrect. For example, the assumption that consumers in their 20s only want to shop online drives a lot of corporate focus and decisions, but it’s not necessarily true. In fact, panelists agreed, shopping physical stores has proven nostalgic for a younger generation born into a digital world.
When asked about what legacy brands aren’t doing that they ought to do more of, Gannan said it’s all about listening to the consumer.
“We all get really caught up in what we’re trying to do within our own organization, within our own brand, but the answers are all not there,” she said. “It’s how you use the data that every one of us has access to that’s sometimes really hard to mine. But if we listened better to our consumers, I think everyone would be more successful.”
Goldstine said success can be found by not jumping on bandwagons. “Brands can go off the rails when they’re chasing the latest shiny object, which can be the latest technology,” he said, adding he’s glad that MoMA didn’t go head first into the Metaverse. “We have a pretty rigorous framework that drives how we think about new spaces. We’re still a small retailer. We’re not Amazon. We can’t do 10,000 tests a year. We make one or two bets a year.”
