How Gen Z Is Reinventing Retail

So our final speaker of the day is the global CMO and North America president for Coach, which is Tapestry's largest brand. He is known for his innovative storytelling, purpose-led branding, and customer centricity. Please welcome up to the stage, Sandeep Seth. Welcome, Sandeep. Thank you so much for joining us. Thanks a lot for inviting me. Of course. Sandeep, so you were at Procter and Gamble for more than 23 years and before becoming- It was the previous century. Last century and before becoming global CMO and North America President for Coach back in 2021. Can you just talk us through some of the lessons that you learned at P&G that have really helped you in your current role? Well, you're taking me really back. Yeah, I joined P&G straight out of my B-school and, you know, I came out of MBA and the first thing I realized was actually, I'm joining the biggest marketing university of the world. I mean, what you learn at P&G on marketing is way more than what Philip Kotler could teach you sometimes. And I think a couple of things that stand out for me, which has really defined how I think of brands and businesses. First is, in P&G, we always used to say that there's only one boss and the boss is consumer, and we literally meant it, right?The amount of time we would spend in the homes of the consumers, I've slept in consumers homes while doing research for Pampers. I've gone shopping with consumers from Shanghai to Seoul to Tokyo, like spend the whole week with them. But it really all starts and ends with consumers and walking in their shoes right on that. And I think the second thing that stands out is, thinking of brands not as just a force for growth, but a force for good. What can brands do from a culture point of view and how do you bring that to life and every day? So I would say those two things which are completely embedded in how I think of brands and businesses. And can you tell us a little bit about the evolution of Coach in some of its key milestones? Because not many people know that the brand was originally inspired by baseball. Yeah, I mean, I learned a lot about Coach as I went through this process of transitioning from P&G. I remember when I first got a call from a recruiter and he asked me this question, and this was during pandemic, right? I mean, I used to travel a lot and this is the time I'm home which is very unusual for me. I'm spending all the time doing Zoom calls. He said, "Oh, are you interested in Coach?" and my wife could hear that. She said that's the first bag I got her when we got engaged. Yeah, Coach has some amazing heritage, which many people don't know today. Starting with the dream of an immigrant in 1941 and it's actually inspired from baseball glove. What we talk about a lot is the glove and leather with which the bags are made. Through the I would say the 80 years it's been there, they mean so many different milestone moments for Coach to the 1960s with Bonnie Cashin being our first lead female designer to the year 2000 when kind of Coach defined accessible luxury the whole new way to look at luxury that's available to everyone. And where we are now with expensive luxury is the new way of looking at our Gen Z consumers. So picking up on those Gen Z consumers, what are you doing to really resonate with those younger consumers? Because we know that luxury shoppers are becoming wealthier and younger. So how are you tapping into them? Look, firstly, it's really going back to the fundamentals of understanding why these shoppers spend money on luxury and what luxury or a handbag or an accessory means to them. So we are first and foremost spending a lot of time, I heard about focus groups in the previous panel, and so we spend a lot of time in homes doing ethnographic one on one. You know, I personally do that. My whole team does that. We spend 6 hours with one person really trying to understand their life, trying to walk through their wardrobe, go out shopping with them, have drinks with them to really understand what this means. Why does someone buy a handbag? Like what's the emotional reason to spend? And it really all goes back to how Gen Zs are looking at brands as a way of self-expression and the way to have that confidence to express themselves right on that. So that is changing. I would say the paradigm from how luxury has been seen more for status and exclusivity to a lot more of self-expression and inclusivity. And that is the shift that brands need to start thinking about in their storytelling. But in that expression, whether it is a marketing campaign, whether it's a store, whether it's a pop up, or how we look at our products. Well, tapping into that self-expression, you recently launched the Courage To Be Real Campaign. We have a short video of the latest one to show you. Can we play that? Do you really think you can pull off a shine like that? So that's a form of storytelling that feels quite unexpected and different for Coach. So what was the thinking behind it and how is it performed? Yeah. Again, I'll go back to the core of the insight behind the story, and it really came out of our focus groups and in homes that we've been doing. You know, we started our journey of bringing our brand purpose of Courage To Be Real about 12 months back, when we launched a partnership with Lil Nas X. We launched our first film at that time, followed by a tabby campaign the whole In My Tabby story back in March and this is the third chapter of that story that we have. As we've been engaging with Gen Z, talking to them, it's a very interesting thing that you hear is on one hand, they're extremely confident. The life is fully sorted out. I mean, some of them I've talked to, they know exactly what job they will do, where will they go, what's the next step? A lot of them have boards of their future partners and how they going to dress up their partners like everything is sorted out on one side, right? But on the other side, they start talking about that self doubt. Right? That moment when we go out in the world, what would be the acceptance? Can I express myself the way I want to? And so that theme comes out in every discussion you have. And one of the things you realize is while you know, we can talk about a lot of external factors, but mostly it's the voice inside that kind of stops you and says "Can I pull this off? Can I do that?" So this campaign is really based on that inner voice, the inner critic that stops you from expressing yourself because you think this will not be accepted. So we thought how do we bring that to life? And the role Coach needs to play is not about selling another handbag, but our role here is to give that confidence, to let people express the way they want to. And that's the big shift we are doing from really talking about products to talking about our purpose. Why do we exist? What's the reason for someone to buy another handbag? And in terms of connecting with younger audiences, I know that Coach took part in the Metaverse Fashion Week earlier this year and the tabby bag was the star. Again, tell us about that and what were some of the results you saw? Sure. You know, firstly, I have to give the disclaimer that I do not understand metaverse and Web3 and and NFTs but I do use those words a lot. Look, Metaverse Fashion Week was a great opportunity for us. The team came up and said we want to be out there. But to me it wasn't so much metaverse or not, it was another platform to express the brand and engage our consumers. We know consumers are in the metaverse, in gaming. I mean, a lot of young consumers are out there. The question for us was, can we leverage those platforms? Can we engage in a way that the brand can present itself disruptively on that? So we didn't start with let's do something in the metaverse. We were actually launching our In My Tabby campaign in March, and we saw an opportunity of featuring that campaign and the campaign message through a virtual world. And we said how do we bring it a whole different twist to the same insight, the same story? In My Tabby, similar to the Way You Shine, was really based on the whole insight that we carry, not just our valuables or our lipstick or our phone in our bag, we carry our emotions and stories with us. And I've heard this often from people whenever I say I work for Coach and I shared my personal story, but everyone talks to me about the first Coach bag, right? So there's an emotion you carry, there's a story you carry. And so what we decided to do was how to bring that story and that emotion that we carry? In a way, emotional baggage was what we were kind of playing on through a virtual world and how do we bring that to life? And you asked me about how did this campaign do or how the shine is doing? I think we've gotten amazing resonance from not just the younger consumers, but all audiences on that. We're seeing very high level of engagement and thankfully, the business is responding. So we've spoken there about the virtual world. But of course, bricks and mortar also play a powerful role. And in fact, I know that the co-CEO Todd Khan recently said that stores are the best expression of the entire brand. And so I'd love to know how you're doubling down on that in-store experience. Oh, look, I mean, there's always this discussion. Is it digital? Is it store? Is it digital first? Is it mobile first? I think consumers today are seamlessly going through them. They are not thinking of that as a virtual experience or a physical experience. And I'll share an anecdote later about, you know, I was doing a research in China. But before that, let me come to how we are looking at. Well, the store is part of the overall journey. So sometimes it could be the destination you shop, sometimes as a destination you browse and experience and go back online to do more research, you may come back physically into the store or you may just buy online. So the objective for us is how do we create that seamless experience for the consumer to be able to go wherever they want to engage with the brand. But keeping in mind, the Gen Z and the younger consumers and how they engage with brands, right? Their habits are very different in terms of them being digital natives. Like truly digital. I mean, we talk about millennials being digital natives, but millennials are more tech dependent than digital natives. But, you know, I have two kids, one, 18 and one, 13 year old. They were born with the iPhone in their hand, right? Literally. So the way they approach technology is so different. So we have to create a similar experience in our physical stores and we launched this new Coach Play concept last year with a store in Chicago where we also opened pop ups and stores in Singapore, in Tokyo, in Shanghai, where we are piloting this new concept which allows consumers to express themselves in the store, change the whole paradigm on how sometimes product is treated too preciously and people hesitate to pick it up and even touch the product to create an environment when they can play with the product, they can express themselves, create more engagement with the consumer and the product. The engagement also has to be different. A lot of the younger consumers do not want to talk to store associates. They want to be able to engage on their own. So how do we create that environment? And that's a whole new concept of Coach Play that we are piloting and bringing to life. And we need to find not just the physical vision, we need to find a digital version of the same. You've spoken a lot about purpose. Can you tell us about the launch of Coachtopia and which you set up as a separate sub-brand? So how does that work? What's its purpose? Well, look, I think first I have to start by saying being part of the fashion industry, I'm part of the problem that we've created in the world. Fashion industry is one of the most unsustainable industries in some way. We create so much material that that's always going back into waste and I think with that in mind and really taking the responsibility, we decided to create not just a small initiative to be eco friendly or sustainable, but something that can be fully 100% sustainable in its entirety. From the materials we use to the manufacturing to eventually creating multiple lives for the same product. And that was the whole thinking behind the Coahtopia initiative. We decided the best way to do that is create that as a sub-brand so it's operated more as a start up within Coach that operates independently, without needing to go through all the processes and approvals that a big brand would have to go to so that they can operate with agility and speed. But the intent is to take all the learnings back to the parent brand. So Coachtopia is like cutting edge and leading. Now if you look at Coach, Coach has in itself been doing a lot of initiatives on sustainability for a long period of time. But as the big brand, it's difficult sometimes to be that agile. So Coachtopia is that purposely kind of sub-brand for us and we've had phenomenal success in the six months it's been in market. First, starting with UK and US and now we've recently just launched in Tokyo last week. And what are some of the big learnings that you've taken from Coachtopia and are hopefully weaving into the parent brand? Look, it's both ways. I would say Coachtopia took a lot of learnings that Coach was already doing in terms of material, in terms of energy consumption, and it's gone there. Now Coachtopia has just gone into market very, very recently. So I would say it's early days to see big learnings going back. But one of the things that that is very interesting is how Coachtopia is using all the waste that is generated in our manufacturing process. And we're even asking the question, a lot of that can be used in Coach itself, right? And we've started kind of experimenting and piloting how can we design product for Coach differently with the same thing? So again, the whole intent is do fast speed learning on Coachtopia, continue to bring it back into our manufacturing process, our stores Coachtopia, if you go to our Soho store, even the fixtures that you used are all recycled material and we're saying, can we just use this for for the next Coach store in itself? And that's an easy reapplication. You've spoken before about how crucial it is to have the right mix of magic and logic. So I'd love to know how you make sure you have that mix on your team to really make customer centric decisions and drive loyalty? Look, I loved when I joined Coach or Tapestry and everyone was talking about magic and logic. And I'm sure every company has their own way. I mean, we used to say art and science in P&G and different companies talk it differently. But Coach and Tapestry has very clearly stated its customer centricity and data centricity at the core of all decision making. And there is lots and lots of data, sometimes too much of data, I would say. And that's why I was kind of listening to how the previous panel was talking about data and how you make informed decision. I think that's at the core of our entire business operations, right? I mean, so it is ceve, very data driven decision making. At the same time, what we do is extremely creative. I mean designing bags or or doing the storytelling that we are doing is an extremely creative piece of work on that. So you have to allow that magic to live along with the data. And now data can help make the magic even better. I mean, you've seen this film that we just played out here. We went through three rounds of quantitative testing before we decided what the final film is, right? While the insight is coming from the consumer, the creative idea is coming from the creative team. But once you make the film, you go tested quantitatively. You try and understand how consumers are engaging with it, where the engagement drops and you go back and re-edit. So we've done three rounds of edit before it goes out. So again, this is where data can really inform creativity versus kind of constrained creativity on how we can do things. Sandeep, I'd love to play a quick fly around with you before we finish. So can you give me your one sentence opinion on the following? So first, your most powerful piece of advice for other brand leaders. It was something that I was inspired by someone else was this quote from Satya Nadella, the CEO of Microsoft. He often talks about "You need to go away from I-know-it-all to I-will-learn-it-all mindset". And I think for marketers or for anyone in business today, that is very important. Now, specifically in marketing, how that translates from me is we should stop trying to be experts, we should lean in and try things out because there's no time to be an expert of anything today. Platforms evolved so fast and even if the platform stays, the rules of the game change so fast. So how do we go away from I want to be an expert of something to I'm open to trying everything? So having that curiosity to keep learning. Your view AI. I have recently been watching the entire Terminator series. I think they're going to take it over with my daughter. She's 13. No, I think AI is fantastic. I would say there's just so much possibilities on what can be done. I know there's always the other side of it, like what is AI going to do, what we are doing? I think it's going to really enhance everything we do. I think I see so many applications all the way from the process side to measurement side to creative development where AI can really enhance. And again, it goes back to magic and logic coming together, like how do we bring it? So I'm super excited with AI and we're trying to dabble with it at this point with a few pilots. The brands you most admire outside of your industry and why? Yeah, this is easy, Apple. I buy into the philosophy of Apple more than the product, right? I really see that come to life. I know there's always a debate when the new iPhone comes. It's no different from the previous one, but I will, like many others, queue up to buy it. But I think it really is such intuitive consumer design, right? And it's really focused on making life simple. So it lives to its purpose with every product it brings out, right?. And sometimes it's not the new technology we're looking for, it's the simplicity of how you use. So again, for some it matters, for some it won't. But the purpose is very clear and it is reflected in everything they do. The Tapestry Capri Megadeal. I think it's time to have American power fashion company. I'm excited. Looking forward to that. And finally, the future of retail. Future of retail is exciting. I think there's just so much. People are there to engage with brands and I think retail truly brings that expression to life in all its aspects on that. So I see an amazing future of it. Any questions from the audience? So I have a question about the positioning and the connection between marketing and product development and does one come before the other systematically? I mean, different companies, different brands operate differently. My view on that is marketing and product needs to go hand-in-hand. At the end, you can't start with one before the other. It's really about understanding the consumer, understanding the narrative that you are building, and then the four Ps come after that, which is the product, price, place, and promotion. So marketing and product design needs to work hand-in-hand from the beginning before you even write the brief of what the design needs to look like. Any other questions? I do have another question. So speaking of Coachtopia and what do you think the right balance is between luxury and affordability? Being a brand that wants to go against fast fashion and their low price point? How do you think one should think this? It's a really tough question, and I doubt I have a specific answer. Look, it really depends on the brand and and what positioning and what consumer you're going for, right? I mean you are going to charge for what the brand is, right, and where you want to position on that. If you look at Coach, Coach has always kind of stood for we want more and more people to experience luxury, right? And that's why we try to bring in the highest quality at a price that is affordable to many. Having said that, Coach is still expensive. $150 sometimes for a bag is not an easy thing to shell out, right? So I think it really goes back to the brand, where you want to position what your ambition is as a brand. I mean, there's luxury at $50,000 and there's luxury at $150, and it all plays a different role. Wonderful. Sandeep, thank you so much for your time today. It's been such a pleasure chatting to you. Big round of applause for Sandeep.