STORES Convention Daily - 2018 Big Show Day 2 - 4

2018 MONDAY

4

BARK and Boxed Extend Relationships Beyond Digital

G

rowing up in Denmark, Henrik
Werdelin often visited the toy store
around the corner run by two brothers. Sometimes he'd just "come out and
play with stuff," he said; the brothers built
a relationship with him that went beyond
buying and selling.
Today, Werdelin attempts to replicate
that sense of old-school connection in a
more modern way. As co-founder of BARK
- makers of the BarkBox toy and treat
monthly subscription service for dogs and
their people - his company seeks not only
to understand those who buy its products.
BARK also uses empathy to create a good
relationship with them.
That means, for example, identifying
with the fact that a growing number of
consumers think of their dogs like children.
"In many ways, we were lucky in that
we stumbled onto this changing behavior,"
he said. "If you look 50 years ago, dogs
were pets. They were probably living
outside, and definitely not somebody that
you would feed at the same time that you
were feeding your family. We did a survey
recently, and of the dog families in the
U.S. - there's 56 million households with
a dog and 70-odd million dogs - half of
the people who have a dog, they let the dog
sleep in their bed. A third of the dog owners,
they'll sleep in an uncomfortable position
to let the dog sleep in a more comfortable
position. That's something that has changed

Henrik Werdelin (left) and Sarah Halzack (right) talk about canines and changing
behaviors.

... and the industry wasn't catering to that
new relationship."
Werdelin spoke during "The Directto-Consumer Uprising," a Sunday morning session moderated by Sarah Halzack,
retail columnist for Bloomberg Gadfly.
Also on the ticket: Chieh Huang, CEO
and co-founder of Boxed Wholesale, an
ecommerce provider of bulk goods for
individuals and businesses. Both BARK
and Boxed are young companies; BARK
was founded in 2012 and Boxed in 2013,
and each already has surpassed $100 mil-

lion in annual revenue. In addition, both
are digital native brands that think first,
according to Halzack, about a customer
whose front door for shipping is digital and
their smartphone.
Werdelin credits the BARK customer
service team for making the connection
with consumers; known as the Happy
Team, it is the organization's largest team
as well as its "heart." In addition to dealing
with orders and issues, they start conversations and ask questions about, say, how a
customer's dog sleeps. "I really see them as

a relationship engine, as far as building that
relationship, but also for extracting more
information about the individual customer
and about what kind of products we should
make as a business."
Offering its own products has been key
to company growth; customers are increasingly good at sniffing out authenticity, he
said, and that's built from the inside out.
Employees test toys and treats on their own
dogs, for a start, and customers "understand
that they're talking to their peers."
Boxed, too, offers its own products,
discovering early on it would be essential
to the company's success. It first set out to
provide wholesale savings to those who
didn't have access to a physical warehouse
club; it didn't take long to learn that even
when people do have physical access, they
don't necessarily have the time or patience
to actually go.
"From there on out, we started with a
very simple premise: mobile-first, largeformat items only, limited SKU - about
1,600 items - and building and operating
our own fulfillment centers and writing the
whole technology stack ourselves," Huang
said. "It was not so much a luxury, a margin
builder, as it was a necessity."
The company, he said, had two challenges: "If you're a general retailer, you
usually cannot carry the large-format items.
See "Beyond Digital" on page 29

Rock Star Entrepreneurs

O

ne of the highlights of Sunday oriented seed and early-stage companies.
morning was a presentation called Dan Levitan traces the beginning of his
"Rock Star Entrepreneurs and the interest in entrepreneurial consumer comNext Generation of Retail." Moderated panies to a 1991 meeting with Howard
by Rachel Shechtman, founder and CEO Schultz, founder and now chairman of
of STORY, the panel included beauty and Starbucks, who, he said, "changed the psyfootwear entrepreneur Marcia Kilgore, chological contract between a company
most recently the creator of Beauty Pie and its employees." Inspired by Schultz's
passion and focus
and Soaper Duper;
- and, not coinMichael Lastoria,
cidentally, his succo-founder, CEO
"The idea matters.
cess - Levitan coand creative direcThe execution
founded Maveron
tor of &pizza; Dan
matters more. The
in 1998.
Levitan, co-founder
At the stage
and general partner
team matters most."
w
h
e
n Maveron
of Maveron; and
-Dan Levitan,
gets involved, it's
Manish Vora, coMaveron
much too early to
founder of Museum
know - or even
of Ice Cream.
have a solid guess
Shechtman began by giving the audience a quick over- - as to whether a company will go on
view of STORY, a 2,000-square-foot store to become a success. In determining who
in New York that has the point of view of gets funding, Levitan and his colleagues
a magazine, changes content like a gallery look most closely not at pro formas but at
and sells things like a store. It actually is the entrepreneurs themselves. "The idea
a store, but one whose entire inventory matters," Levitan said. "The execution
is centered around a certain theme and matters more. The team matters most."
changes as the theme (or, as Shecht- Successful entrepreneurs, he said, tend to
man puts it, the story) changes. Stories share key traits. One is speed: They work,
at STORY have included Home for the as he put it, ridiculously fast. They recruit
Holidays, Love, Well Being, His, Making strong people.
They are obsessed with product
Things and numerous others.
Maveron is a venture capital company quality. (He told the story of a founder
that focuses exclusively on consumer- whose company got one bad review out

Michael Lastoria of &pizza is one in Sunday's series of "rock star entrepreneurs."

of hundreds of good ones. The bad review
was the subject of a series of painful meetings, not just with senior staff but with the
board: How can we change to make this
better?) and they manage to have a balance
between obsession and analytics, or, as
Levitan put it, head and heart. "The ones
who are all heart," he said, "never manage
to scale. The ones who are all head never
manage to become an important part of
their customers' lives."
Museum of Ice Cream is the brainchild of co-founders Manish Vora, who
previously worked at a Manhattan equity
research firm, and Maryellis Bunn who,

while a student at Parsons School of Design, found museums and other cultural
institutions unable to engage and capture
her generation, the Millennials. Museum
of Ice Cream, an interactive art exhibition
with ice cream- and candy-themed exhibits,
was launched to remedy the lack of such
engagement. The first exhibition appeared
in New York in 2016; 30,000 tickets, priced
at $12 to $18, sold out in a week.
A Museum of Ice Cream opened in
Los Angeles last summer, and has been
visited - and documented and praised
See "Rock Star" on page 29



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