Steffen Liese is Head of Retail EU at Urban Outfitters. A conversation on what it takes to run a successful retail business in the 21st century
Ever since the opening of the first online shop around 1995, the death of brick and mortar stores was predicted. Curiously, more than 20 years later, people still go shopping. Of course, retail businesses face challenges and they have to adapt to an ever changing environment. But disappear forever? Doubtful.
A good and sellable product is obviously the fundament of a functioning business. However, talking to Steffen Liese, one thing becomes clear rather quickly: the key to successful retail is to put the people at the centre of your attention. Not only the customers, but all of them: the leaders, the teams and the ones who buy.
Liese started his career in 2002 – on the floor, as an apprentice at H&M. Since 2016, he is Head of Retail EU at Urban Outfitters. A conversation on regional differences, the role of technology and the importance of people.
What are the three pillars for a successful brick and mortar store?
A good product is fundamental, as well as a leader with a vision and who knows how to communicate and realise that vision. And, of course, there’s the team.
Let’s start with the product. What goes on the racks is not necessarily in your power but you depend on the buyers. What are your options of influence?
You’ve got to have the balls to give feedback – obviously in the appropriate tone. For me, the relation between quality and price has to be right. From what I see, this increasingly becomes important to the customer. They want to spend money but they want quality in return.
Are there regional market differences?
Yes, different merchandise is needed for the UK than for Scandinavia, for example. I give feedback to the buyers on trends, what product groups to focus on, which price points to communicate in which region. I also give feedback on cuts, fit or size curves.
For example, what are the differences between the UK and Germany?
In the UK, the focus is on London. Pretty much everything happens there and it informs the rest of the country. In Germany you do have Berlin and it becomes more and more important.
However, you still feel the federal structure with more than just one relevant region, each with their own identity. Munich is different to Berlin. Berlin and Hamburg are more similar, although both with their very own dynamics. And then there is Frankfurt, Stuttgart, Düsseldorf, Cologne. The specific requirements of each region need to be understood.
How are Hamburg and Munich different?
Hamburg is a bit cleaner when it comes to fashion, you can feel the vicinity to Scandinavia. Munich is already a bit “Bella Italia”. They like prints, it’s a bit more feminine, maybe even a bit more frivolous in comparison.
And it is your job to make sure that retailers from outside Germany understand the regional differences?
Yes, this is what I have done for All Saints and Maje and what I am now doing for Urban Outfitters – to understand those differences and yet keep a brand’s DNA in the specific markets.
I heard you speak of a “21st century retail culture” before. Please elaborate.
For me, it starts with leadership. Don’t just tell people what to do. Live it, be their role model. This is how you draw them in.
It also means to incorporate technology. To connect brick and mortar with online. To see the whole picture. Give your sales assistants iPads so they can check for the customer if what they are looking for is available in another store or online. Make it easy for your staff and the customers.
It’s also about experience. I know, it’s a buzzword, but it’s true. None of us is in need of a new piece of clothing. So we have to make the consumer want to buy. We no longer work with “turnover per squaremetre” but with “experience per squaremetre”. For that, you want staff that don’t only know how to sell, they need to be on Instagram, Youtube and all the other channels. They need to know what’s going on – without me telling them. They need to want to engage. And at the end of the day they also need to identify with the brand so they can embody what it stands for. So the experience does not only become important for the customer, but also for the team. If the experience isn’t right, I’ll neither get through to the customer nor to employees.
Around 1995 the first ever online shop opened, which means that your career is younger than that. You basically don’t know the retail business without the “online-threat”. Is it simply a given for you?
I think it’s simply another division of retail. Adjustment is necessary, yes. However, since ten years they are telling us that brick and mortar will be dead. We can clearly see that this has not happened. The customers want both. But you have to have that experience to give your customers a reason to come into the store. In Germany, not many are very good at this. We’re having difficulties with “this online thing”. We are very good when it comes to operations, how to optimise processes and make them more efficient. But we struggle with everything that requires creative thinking. We usually reproduce what happens in other countries, which means we are always behind. However, there is also potential in this.
Well, the integration of brick and mortar with online is easy for companies that are vertically integrated but how about smaller and medium sized companies that are not?
Focus. Specify your offering. My best friend opened a concept store for curvier women. It is called Les Soeurs. It does fantastically. Cover what the verticals cannot or don’t want to cover.
Let’s go back to the floor. What do you do when you realise a store isn’t performing as it should?
The first thing I do is, I go there myself. I’ll talk to the team leader and the team. They are the ones who are in touch with the customers and know what goes on. They have the important information. I like to check in on Saturdays. If the Saturdays don’t work, something is really wrong. I check what kind of customer comes into the store. What do the competitors do? Do we have the best team possible and the leader to manage? Do we have the right merchandise? Should we train staff better? Or, do we have to accept that the dynamics of a local market have changed and we need to consider a relocation or closing?
What options do you have to motivate your team and, as a result, get better numbers?
If you want quality, pay competitive salaries. Give your store manager some flexibility regarding the budget. You don’t have to give them more but let them spend it the way they want. We’re testing this at Urban Outfitters and it works well. That’s your fundament.
And then, of course, invest in your team through training. Weekly, in the stores. Use technology. Everybody gets a smart phone on which we offer PDFs and videos where we can send brand messages, where we explain certain trends. They can check it on their way to work on the train.
How has the conversation between sales assistants and the customer changed over the last 20 years?
Commonplaces like “Would you like a belt with your trousers?” don’t really work anymore. Today, you must be more clever than that. They need to build trust and have an engaging conversation in which they might make additional offerings. It helps when your staff identifies with the brand, but that identification has to be authentic. Again, this conversation is part of said experience.
What traits does a sales assistant need?
Most importantly, for me, charisma. I like people who have something to say. They don’t necessarily have to have the perfect knowledge about materials or the product. We can train them. However, they need a natural instinct for retail and a feeling for people. They need to know how to engage others in a conversation and how to work in a team.
How do you find that out?
By having a conversation with them rather than just interviewing them when I first meet them. What makes them tick? What are they interested in? I admire when somebody admits that they failed in something. And maybe grew from it. I also talk about myself. It’s about finding out whether they’re just repeating a formula, say what they think is expected in such a situation, or if they are being themselves.
But this all depends on a good leader. What does a good leader need?
A vision. You need to be able to come up with it and you have to be able to sell it. You need to have the overview, keep in mind the bigger picture, as you are the one who leads the way.
You are also the one who supports the team in becoming the best they can be – and then let them shine. You need to know when to step back and let the people who can do it better than you, do their jobs.
You need to be able to compose the team. Ideally, it is like the perfect girl group: with a Ginger and a Posh and a Sporty and in the best case you’ll get the Spice Girls.