It's a Matter Of... Customers
Retail Reinvention Through a Consumer’s EyesSeptember 28, 2020 BeautyMatter
September 28, 2020
Startup life is not for everyone but those who are bitten by the bug are often ready, willing and able to jump into exciting opportunities with both feet. Kelly talks with Katie Hunt, Co-Founder and Chief Revenue Officer at Showfields and a Co-Founder of the community-based VC called The Fund. Clearly an over-achiever, Katie has set out to reinvent retail, building the most interesting store in the world.
Katie Hunt [00:00:22]: Hi, I’m Katie Hunt, the co-founder and CRO of SHOWFIELDS, the most interesting store in the world, and to me, it’s a matter of customers.
Kelly Kovack [00:00:36]: Many people think entrepreneurs are born that way, that they have some innate entrepreneurial DNA. I’m Kelly Kovack, founder of Beauty Matter. Often, the start-up bug bites unexpectedly because you found yourself in the right place at the right time and were open to possibilities. Every founder has their own path and a story that’s unique to them; some start young, we’ve all heard the lemonade stand stories; others take the plunge after working for the man; and so others become entrepreneurs because of circumstance. Start-up life isn’t for everyone, but those who are bitten by the bug are often ready, willing, and able to jump into exciting opportunities with both feet. Katie Hunt is the co-founder and Chief Revenue Officer of SHOWFIELDS, and a co-founder of the community-based VC called The Fund. Clearly an overachiever, Katie has set out to reinvent retail, building the most interesting store in the world.
So, I am so excited to have our guest today, who is Katie Hunt, the co-founder and CRO of SHOWFIELDS, and a co-founder of The Fund. Katie, when I was sort of prepping for our conversation today, you know, we met just a few months ago, and I looked at my calendar, and it was on March 11th in the afternoon. It is sort of mind-boggling how much things have changed in those few months. When we met, it was as if we’d known each other forever, which is always great, so I was looking forward to this, but in sort of looking back, we were talking about all of the ways we could collaborate, and we haven’t been in touch since, because obviously, you know, all those plans that you had for your business, we had for our business, kind of got pulled out from under us, and you know, like everyone, we’ve been in a scramble to figure out what it is we’re going through. But, here we are.
Katie Hunt [00:02:45]: Here we are.
Kelly Kovack [00:02:48]: So, welcome. You know, I’d really love to start with your background, because you have a really interesting background, and I think this was sort of one of the ways we connected, because I sort of started my career in beauty having the good fortune of being one of the early executive teams of Bliss, and you were the third employee for Warby Parker, which is…those kinds of experiences are so special, and at least for me, really kind of defined my career. So, I would love to hear sort of your Warby Parker story, and how it sort of led to kind of what you’re doing now, because I’m sure it informed a lot.
Katie Hunt [00:03:30]: Yeah, Kelly, it’s first of all just so great to see you. I have to say that there is this other level of connection that has been happening via Zoom video during COVID and getting to have these really in-depth conversations with women that I admire, and it’s something that I really look forward to, so I’m really happy to be speaking with you today and having this moment in this crazy world to you know, get back in front of you and to get chatting again, so I’m really grateful for that today. But, I’m also very grateful for the experiences that I’ve had in my career. Warby Parker, I mean, it fundamentally changed my life, and I had no idea that that was going to happen. I was an actor in New York City, I was an extra on shows like Gossip Girl, Ugly Betty, and All My Children, and I applied for what I thought was going to be just a customer service job on the side while I was auditioning, and it turned out to be Warby Parker and it turned out to be my utter passion in life. Start-ups are incredibly creative, and I was just so lucky to work with the team that was there. They were people that really empowered the team around them. They never pretended to have all the answers, it was very much a collaborative effort to come up with strategy together and to work together and to try new things, and there was no wrong or right answers, and I think for me, it allowed me to learn so much in such a short period of time, and mind you, I was the low man on the totem pole for sure.
Kelly Kovack [00:05:13]: But, you were still number three.
Katie Hunt [00:05:16]: Yeah, but at least, you know, it was a small room. But, I think when you take those moments in life and you lean in as far as you can and you try and learn as much as you possibly can from the people around you, and you have that opportunity, those things can re-direct the entire course of the rest of your life, and for me, they did. I never looked back, I never acted again, I moved fully into start-ups, and that was ten-and-a-half years ago now, and many, many companies ago, but yeah, here I am now in a very different life.
Kelly Kovack [00:05:52]: Yeah. You know, I remember when Warby Parker opened sort of the show room that was sort of just a very tiny piece of the office, because of course, you know, I love retail, in my early career, I was in retail, and I was like, “What are they doing?” First of all, was it in the Puck Building?
Katie Hunt [00:06:18]: Oh yeah, we had an office in the Puck Building, it was great.
Kelly Kovack [00:06:20]: Yeah, it was in the Puck Building, so that’s always cool, right? And, it was just sort of like some shelves and an iPad and yet the experience was so cool, and it was so, you know, now we kind of take those things for granted, but it was so sort of thinking-out-of-the-box, like letting people into your office, and there was no wall, like you could see fully into the office.
Katie Hunt [00:06:44]: Oh yeah, we were working right in front of the showroom. I think my favorite was the first actual office we had was Neal’s apartment in Philadelphia, and he’s married, he had his wife there, and we were taking appointments in his living room, and then our second offices were on 16th Street in a slightly illegal apartment where we had like a rickety fold-out table where we had all of our glasses, and then the Puck Building. So, by the time we got to Puck…
Kelly Kovack [00:07:16]: You were living large!
Katie Hunt [00:07:18]: Yeah, we thought, “This is advanced!” But, you know, I look back on why that experience was so valuable and what it’s informed for me at SHOWFIELDS, and I think what it was was that all of us worked in the showroom, including Dave and Neal, our two co-CEOs, and the amount of data that you collect by interacting with a customer and being able to ask them questions and see what they like and have that moment with them, is unparalleled, and it’s why Dave and Neal still are in our stores, and why they still actually answer customer service calls from time-to-time. It’s the ability to really understand what your customer needs, and if I can think about anything that has been a lesson in every successful company I’ve worked in in the last ten and a half years, it’s the companies that are going to win are the customer-centered companies, are the companies that literally figure out how to change the conversation to be entirely around the consumer, and to make something fundamentally better for them, and if they can, the brand loyalty there is unparalleled.
Kelly Kovack [00:08:29]: Yeah, no, I agree. You know, you hear all of those founder stories where you know, they’re up all night answering, like they are – it’s like their personal cell phone is customer service, and I agree with you. One of the – I call it one of the only “real jobs” I’ve had, was the VP of Marketing at Dr. Dennis Gross, very, very early on, and anyone who started in the marketing department, the first thing they had to do was do a rotation at every counter we had, and some people were like, “I don’t want to do sales, I just want to do marketing,” and I’m like, “Well, you can’t create marketing materials if you don’t know what the customers want, and furthermore, you don’t know what sort of the beauty advisors want; you need to be in their shoes.” And, I used to love, love, love going to PAs, and Kansas City was my favorite place to go. Those consumers were amazing.
Katie Hunt [00:09:25]: What?! I love them!
Kelly Kovack [00:09:26]: Yeah, they’re so smart, but you know, this idea that marketing and sales are disconnected, it’s, you know, and focus groups are whatever, it’s like you need to have real conversations with real people, and you need to have them, like you said, one-on-one, not sort of through the lens of somebody else. I 100% agree with you.
Katie Hunt [00:09:50]: But, it was fun, right? I mean, there’s something also about early stage that is so gritty and so hands-on that makes it somehow seem approachable, like I always say to other founders that every company has been built out of being naïve, like even SHOWFIELDS.
Kelly Kovack [00:10:11]: Oh, 100%.
Katie Hunt [00:10:12]: Yeah, I’m like, oh yeah, we can – myself and my MVs and co-founders are going to reinvent retail. If I had any idea what retail was really like when I joined the SHOWFIELDS team, I think I would have been a lot more scared at the amount of stuff it actually takes to be successful at it.
Kelly Kovack [00:10:31]: Yeah, yeah. Can we back up just a little bit before we get to SHOWFIELDS, because there’s so much to talk about, SHOWFIELDS and the world of retail today. Before we get to that, you are also co-founder of The Fund, which is a VC fund, but it’s very different. So, can you sort of share a little bit about the mandate and why it’s different and what kind of businesses you guys look for?
Katie Hunt [00:10:58]: Sure. So, I guess it was about seven years into my career in New York and 32 companies later, because after Warby, I became a co-founder for hire/strategy consultant where I was working with up to four different start-ups at a time, and so over the course of those seven years, I saw so many different companies created and so many different companies succeed and so many different companies fail, and I think the thing that I started to realize was the competitive advantage that a company could have is not just access to capital, but access to information; having the right ability in terms of your community around you to be able to access people to ask questions so that you could move faster. An example of this for a start-up would be like, I want to implement a widget on my Shopify to do X, and before I spend money on that widget, wouldn’t it be great to be able to speak to someone who has used that widget and to hear what the outcome is for them and not get the sales pitch from whatever that company is? So, that had been my understanding of the ecosystem in New York, but in New York, we were very different from each other. We were all building our own companies, there wasn’t a lot of space to really have those honest conversations or to be able to ask technical questions, and so when my co-founders and I started to talk about what it would mean to create a new type of fund, there were a couple of things that were on the table. The first is, we want to make sure that pre-seed and seed are getting funds, because as funds get more successful, they raise bigger amounts of capital, and then they have to write bigger checks, and they actually price themselves out of being able to participate in pre-seed and seed funds, and when that happens over time in an ecosystem, that means that less and less companies can get money to get started, and that means over time, the ecosystem dries up and is not as active and actually impacts the entire ecosystem, because then when I have a successful start-up, there aren’t a lot of people that I can hire, there aren’t a lot of other companies around that I’m able to work with; it impacts everyone. And then, B, access to information. So, The Fund started just in New York, and you know, everybody says that we picked The Fund because there’s so many VCs that this was the last name left out there, but we are The Fund and we started in New York, and we raised a round of capital, but we raised it from all founders, so everybody from Neal from Casper, to Josh who founded Plated to Sound Cloud to One Medical, we put these 80 people that we respected so much, and we went to them and we were like, “Take a chance on this. Let’s all do this together.” They all wrote us checks, and then we wrote those checks into 50 start-ups that were all being built in New York. It turned out that we ended up being the most active pre-seed fund in the United States, so we then launched The Fund London and The Fund LA. We run all three funds in a Slack channel.
Kelly Kovack [00:14:19]: Oh my god, that’s amazing.
Katie Hunt [00:14:21]: Yeah, with now hundreds of people. But, my favorite thing about it is that everybody who invests and everybody that we invest in are in the same community. They are in the same Slack channels. They have access to each other. So, somebody who has a question about that same widget on Shopify can put that up into the general chat and within ten minutes, some of the smartest minds in the world have answered that question from a place of experience, and to me, that’s life-changing.
Kelly Kovack [00:14:56]: Yeah. It is, you know, I was just on the website earlier, and it really does feel like a community, and you know, there’s…getting money is one thing, I think, but as a founder, you also need to make sure there’s alignment, you need to make sure that you know, it’s getting in bed with someone; it’s a big, big, big decision. I’ve witnessed what can happen, and there’s…when you’re dealing with someone who has gone through what you’ve gone through, it’s very different than someone who is writing checks and has lots of opinions about things.
Katie Hunt [00:15:34]: Yeah, I think there’s also sometimes a lack of empathy when someone is writing a check and their expectations of your performance on the other side of that check. I think that everybody in the fund has built a company before, and they know how near and possible it is to have a success, and so it’s not just a numbers game, it’s not just looking at the quarterly reports which are coming out of these companies, it’s looking at them and being like, “Oh, they didn’t hit that because of this, and maybe I can make an introduction to them for this, and maybe I can help here,” versus just like, “Their numbers are not where I want them to be,” and I think empathy is a big part of it. I mean, I’m very lucky that my co-founders in The Fund and now our co-founders who are – well, we don’t call them co-founders, our IC in LA and London, are all incredible people, and you know, really are approaching this in a holistic, community-based way. Jenny Fielding and Scott Hartley run the day-to-day of The Fund, and they are two of the most incredible, empathetic, and smart people I’ve ever met in my entire life.
Kelly Kovack [00:16:41]: And, you ended up at SHOWFIELDS because they were raising money, right?
Katie Hunt [00:16:46]: Yeah, I guess I’m not a great VC it turns out. I really like it, because it just means that I get to hear people tell me about their crazy ideas all day and I get to try to help them, and that part I love, but you know, SHOWFIELDS was the first company to pitch The Fund for funding.
Kelly Kovack [00:17:03]: Oh, that’s hysterical.
Katie Hunt [00:17:04]: After we had just raised The Fund, and I was like, “What a brilliant idea,” because my co-founders Tal and Amir are really two of the more brilliant people I’ve ever met in this world, and they had really identified this place in the market, and so when I heard them pitch, I called them and I said, “I’d really like to work on this with you,” and then I leaned in so hard I became their co-founder, and that was now almost three years ago, but you know, it’s definitely not what you’re supposed to do.
Kelly Kovack [00:17:36]: Well, you know, I remember when SHOWFIELDS opened, and listen, there’s been like, the death knell of brick-and-mortar retail has been ringing for years, but you know, people can say whatever they want to say, and I think you know, the pandemic aside, I don’t think brick-and-mortar retail is going to go anywhere. We’re social creatures, it’s how we’re built. I think everyone is kind of Zoomed out. I would do anything to get on a plane and go somewhere and talk to people, but you know, when SHOWFIELDS launched, it was, first of all, reinventing the department store, right, which was sort of a dying channel, and then your tagline is, “the most interesting store in the world.” Well, I mean, that in and of itself, like that’s a big promise.
Katie Hunt [00:18:36]: Oh, for sure. Yeah, no, I mean, go big or go home if you’re going to take on retail.
Kelly Kovack [00:18:41]: Exactly. Exactly. But, can you sort of share the early thinkings of SHOWFIELDS, and sort of, you know, how you approached kind of turning retail on its head?
Katie Hunt [00:18:55]: Sure, it’s a thesis that my co-founders and I talk about pretty much daily. Retail is not dead, it’s not dying, it’s not going anywhere, but like all things, it needs to evolve, and it was evolving very slowly; it was not keeping up with the current time, and it was not keeping up with the current customer. It was staying in bed with a business model and with an assortment that was no longer matching up with current trend. So, we believe that previously, everybody has thought that the world has two continents: traditional retail and direct-to-consumer, and that these two lands are so separate from each other, and they operate under different rules, and they don’t interact with each other. It’s not true. If you look at Warby Parker, if you look at Casper, if you look at any of the larger direct to consumer brands, they now can have over a hundred stores, so you have to give a new name to this new continent that has popped up, and this new continent is direct-to-consumer and traditional retail coming together and creating a new place, which we call C-commerce or consumer-commerce, and this is a continent that is completely run by consumers, it’s how they want to see things, where they want to see things, how they want to shop, and the content they want to see around it, and so there are very few models that work within this new consumer because it’s harder than ever to garner attention and to do it in a meaningful way, not in just an off-handed way, and so it’s almost in the same way that Warby Parker looked at the glasses industry and said, “How do I make this more convenient for the consumer? How do I make this easier for them? Let me look at every stage of the funnel through their eyes.” We took a step back and said, “Let’s look at retail and how we ended up here through the eyes of the consumer, and then reimagine every part of the funnel through their eyes.” So, it means that I want, as a consumer, to have a meaningful experience when I come to your store; my time is valuable. I want to see things that I’m not going to see anywhere else. I want to be empowered to take that story and to be part of that story in any way that’s meaningful for me. I want to see diverse brands. I want to see diverse founders. I want to see things that are better for me and better for the world. I do not want to be talked down to. I want an experience that is unlike anything I’ve ever seen before. And, that’s how we ended up with a four-story department store that’s 50% art and 50% retail. So, in the same way that we curate brands from all over the world and bring them into a space for people to meet and discover them, 50% of the store is actually emerging artists from all over the world that we actually pay to do these crazy, over-the-top installations that are all part of one store, so every six months, we have sort of one story that we’re telling throughout the entire building between the artists and the brands, we curate the entire store around that story, and then six months later, we close the entire store for four days and open as an entirely new store and story, because nativity is all I can say. We really went for it, and it’s exciting though. You come back because you want to see what’s new, you want to discover what’s new, and I think curation is just inherently broken right now. I mean, go to www.Amazon.com right now, and you are literally going to go knowing what you want and you’re going to buy that, and maybe you’ll search a little bit within that category of things, but you’re not going to meet that epic female founder who has created a completely sustainable beauty line that’s going to give back and help women around the world graduate from high school. That’s not what you’re finding there, and that has to exist somewhere, too.
Kelly Kovack [00:23:05]: Now, you know, what I’ve found sort of interesting in sort of what’s been happening with retail, is unfortunately, we’ve seen these iconic retailers that don’t exist anymore, Henri Bendel’s, Barney’s, Lord & Taylor, who knows what’s going to happen, but these businesses started a hundred years ago with sort of a similar premise that you’re talking about: it was curation, it was about the consumer, it was, you know…when I think of what Bendel’s was, it was a hundred years ago exactly what consumers want today, and it’s just such a shame that…you know, a lot of it has to do with private equity, we’re over-stored, whatever, but it is such a shame that those…that sort of old school idea of retail, like we’ve lost that history, one thing, which is always kind of sad, but I really do think, like you were saying that the way forward for retail, it is kind of some of that like old school, good customer service. Customer service, it can take you a long, long way to success.
Katie Hunt [00:24:31]: Yeah. I also think it’s devastating that we’re losing businesses. I don’t want any of the retail businesses that exist in this world to go away. I think that everything needs to change and evolve, and I think that these businesses are beautiful, and I will also make a very strong argument that nothing new is ever new; it is just a resurfaced idea that is brought back to the forefront. And so yes, if you look at SHOWFIELDS, yes, it was all about discovering new things from around the world and having an incredible customer experience. We’re not reinventing the wheel. I think what we did invent was the business model. So, instead of us holding inventory and then as a business, being responsible for the sell-through of that inventory, what we did, because we have a flexible system where we can put 40 different inputs into it, right, 40 different brands, is that at any given time, we can have 40 brands in the space that are all trying out retail, are all having exposure to a ton of customers, but maybe not going to be the most successful retail brand in the world, but because it’s a six-month commitment, they can come in and try something and do something flexible and have an incredible experience, and then six months later, we have an entirely new curation. We’re not holding inventory; we’re retail as a service. So, if you think about it, what would have been incredible for Warby Parker back in the day, before we opened our first retail location, would have been to be able to open a very small retail location in a place like SHOWFIELDS to try different designs, to try different merchandising techniques, and then make the big spend on the flagship store, instead of trying to go out of the door and say, “Okay, we’ve never run a store before, let’s put millions of dollars into a new location and cross our fingers and hope that it works.”
Kelly Kovack [00:26:29]: And, I would imagine that brands sort of use the SHOWFIELDS opportunity or structure in different ways. I know some people use it sort of as a launch platform, I think other people sort of use it as a six-month living focus group, which is very cool. I think you kind of have to go into it with your own strategy.
Katie Hunt [00:26:52]: When we meet with a brand for the first time to talk about them coming into the store, we set those KPIs with them, and for a lot of brands, it’s not about sales, even though I’m devastated if they’re not selling a ton of stuff, because then I didn’t do my job correctly, but for us, you know, it’s about listening to the brand, and hearing what their KPIs are for the upcoming quarter or year, and sometimes, it is just literally about we’re opening New York market, we are a very well-known international brand, and we just need a foothold here to get in front of your audience, or, we have a new product coming out, we don’t if the green label or the red label is going to do better; we would like to AV test that in a retail environment before we release it in our stores, and we can accommodate those things, which is really fun, because the entire store is created as a data collection space as well, and each of our brands has a backend that looks like Google Analytics, so they can understand absolutely everything that is happening in their space, which is not something that you get in traditional retail.
Kelly Kovack So, Katie, who is the SHOWFIELDS community?
Katie Hunt [00:31:04]: She is majority female, ages 24 to 36, and she is literally the person on the forefront of innovation, both in her career and in her social structure, she’s the one pushing the conversation forward around what’s better for us, what’s better for the world; she’s the one having sort of the conversations within her friend group that are pushing everybody to a new space and a new location in terms of their thinking and their purchasing decisions. So, it’s really interesting because I think she votes with her wallet, and I’ve watched her come into SHOWFIELDS, and she’s there because she knows each of the brands in SHOWFIELDS is mission-driven and that she’s supporting small businesses and that these are brands that she would put her money in her mouth and her reputation behind, but I really – I just enjoy her. I think that she is the customer that going forward is going to be the reason that the majority of beauty brands are going to be all natural, the reason that brands are going to be sustainable, and so it’s exciting to meet her where she is right now.
Kelly Kovack [00:32:14]: You know, let’s talk a little bit about what the last six months have looked like, right?
Katie Hunt [00:32:19]: Oh, gosh.
Kelly Kovack [00:32:20]: So, you know, we met on the 11th for the first time, March 11th, and you said you closed your doors on the 15th. So, what did all of that look like? And, I have to say sort of I have loved what you’re doing and the pivot you made, so take us through that path.
Katie Hunt [00:32:40]: Oh god. Okay, so, we closed our doors on March 15th. We made the decision to do it on March 12th, so the day after we met, and for us, it was about keeping our team safe, and figuring out how to do that, and we didn’t feel prepared to even keep our doors open at that point, in a way, right, we closed before New York had the mandate to close. Now, there was definitely a 24-hour period that involved eating a lot of cookies and lying in bed and being like, “Oh my god, what are we going to do?” but then, we go back to c-commerce, right, and this idea that everything in retail is being reimagined through the consumer, and we had this rallying, all-hands meeting, where we all came together, we were like, “We are c-commerce, it doesn’t matter if we have a store right now. How do we take the magical experience that we have in the store and bring it online?” And, I really, I’m very grateful to my co-founder in Tal in that moment, because he really just kept his head on straight and was able to lead that charge and to really push the team forward, and here’s the wonderful part about being in a start-up, everybody is all hands-in and wants to get their hands dirty and wants to innovate, and so within two weeks, we had launched live video shopping, which is insane, like I don’t even know – I look back now and I’m like, I know we didn’t sleep, but I also don’t know how we made it happen. So, what it means is that we now have five-to-seven live shows a week, and we have change-makers from all around the world, everyone from art curators to fitness professionals to people from their homes, and we go live, and it can be anything from a cocktail class to someone actually giving you a tour of their house, and they’re talking about the products that are meaningful to them, and you can shop those products directly from the screen, so thank you VC, but with people you actually care about hearing from.
Kelly Kovack [00:34:52]: It is – it’s very cool, even how you’ve served it up, because it’s not just sort of livestreaming, it’s so much more of an experience, and I also love that you feel like they’re real people, and not to disparage influencers, but they don’t feel like influencers in the traditional sense as we know influencers today.
Katie Hunt [00:35:17]: I don’t know about you, but the minute the pandemic hit, I stopped wanting to see shiny lives. I just didn’t want to see the perfect picture; I didn’t want to see someone without the cracks and the mistakes, I wanted to see something real, and I think there’s something pretty crazy about a live video from someone’s house, when you’re also feeling, you know, disconnected, to see that it’s not always perfect over there. They’re not in full hair and makeup and outfits, they’re walking you around their home, and sometimes it’s messy, and sometimes crazy stuff happens, and sometimes their friend will show up and they’ll be in the video. To me, that feels like someone is talking to you directly, and as a consumer, that’s what I want. So, if you think about the same thing of us reimagining what we wanted to see in a physical space, we reimagined what we wanted to see in a digital space, and to me, that’s all of the cracks and all of the human nature of things.
Kelly Kovack [00:36:20]: Yeah, you know, I’ve found – there’s so many interesting things that have sort of come out of this moment in time that listen, it will be generation-defining in so many ways, but you know, there is so much creativity going on, and there is almost this permission…there was this permission to rethink things, because whatever…however things were before, let’s call it March 15th, they’re never going to be that way again, and I’ve found that there were sort of three sorts of people: there were people that were just sitting on their hands waiting for things to go back to normal and the [unclear 00:37:05] to happen, and then there are people who were just, like, shell-shocked, like they literally were incapable of doing anything, and then there were people that were just like, “Alright, I don’t know what’s going on, but we’ve got to figure something out,” and leaned into it not being perfect, and leaned into it being it may not work. We came to my mom’s in Maryland, so she watches The View, and one of the funny things, there are just these View bloopers, because they are all doing the same things we are, right? The husband is doing the lighting; they all have roots. So, there was this moment where being real was like…it was okay, and people wanted to see that, because they wanted to know people were going through what they were going through, and I thought that was really interesting.
Katie Hunt [00:37:59]: And, in that vein, like I always think that people, when they reflect, everything is always so perfect when they’ve landed on a good solution. I will tell you that we struggled, and I think there are times in this entire process that I’ve felt shell-shocked, and I’ve felt like I want to sit back and wait for everything to be normal, and it has taken a village to get to the solution and to get it up and running. I think we all want to tell these beautiful, tight stories of, “We faced adversity and we figured out a solution on the other side.” We opened again a month ago at 11 Bond Street in New York, and while I feel like we did it in the right way and I feel everybody’s safe, and I feel very in control of the situation, there’s so many things that we’re learning every day, and I think we have to be in that moment and okay with the fact that you know, traffic is not what it was before COVID, and we have to be okay with not knowing what’s going to happen next in New York, and needing to sit back and listen to the experts, and I don’t think there’s any clear path for anyone right now. I’m incredibly proud of the things we’ve released, and I know we wouldn’t have done it if it wasn’t for COVID, and that includes the technology in the store. I mean, we have everything from a magic wand app that lets you come through 11 Bond Street, interact and ask questions, shop, and not actually ever come in contact with another person, because it turns out that’s my level of comfort during COVID, and I wanted something like that for our customers; I wanted them to feel like they could come and have a little joy and see the art and shop and feel protected in that, but at the same time, like that also was not an easy process, and I would be boldfaced lying if I was sitting here being like, “Oh yes, and then we just developed this crazy app and this live video shopping and it was so easy!” Like, no. Nothing worth having is easy.
Kelly Kovack [00:40:16]: And do you think that all of this technology has you know, has informed kind of how you’ll grow the business moving forward? Because you were going to open a second location in Miami, right?
Katie Hunt [00:40:30]: Yeah, we’re still opening the Miami location, we’re waiting on, you know, announcing a launch date there until things are a little bit more certain, but hopefully by early next year at the latest. I think we became a technology and platform company overnight, which has opened up this whole idea of what SHOWFIELDS is, and I think for us, it’s become we’re not just e-commerce for physical retail, we’re really a discovery platform, so we’re connecting these incredible brands and young founders and amazing ideas in the world with the consumer who should have access to these crazy, over-the-top, amazing new ideas, and wants that access, and it doesn’t matter if we’re doing that in a physical store or through our e-commerce, or through whatever we come up with next, it just matters that we’re doing it in a way that feels close to us and our mission.
Kelly Kovack [00:41:38]: And what has the response been from your community?
Katie Hunt [00:41:44]: Supportive. They show up for everything, and I think that’s the difference when you put the time and effort in in the beginning, in the middle, and always with your consumer. They want to show up, and it’s also with our brands. We just signed a deal with American Express and Coco & Breezy to curate ten black-owned businesses in the store and if you come through right now, you can shop them. But like, for American Express and Coco & Breezy to really step up right now during this time and be like, “This is meaningful enough that it’s worth our time during a time that’s very crazy for everyone,” that’s so meaningful to us, and it means that over these three years that we’ve been working, we have been a good partner, too, and if the customer keeps showing up and the brands keep showing up, the team – the amazing team – that I get the privilege of working with every day must be doing something pretty incredible.
Kelly Kovack [00:42:48]: Yeah, no, what you’ve created is really, really special. I mean, when I was in the store last, you tried to make me go down a slide, which was not happening.
Katie Hunt [00:43:03]: I think you would have loved it, I’m just saying.
Kelly Kovack [00:43:06]: My fear was getting stuck halfway down. But, for anyone who hasn’t been to SHOWFIELDS, it really is kind of this retail play land. Every time I’m in the neighborhood, I pop in to sort of see what’s going on, because it is, you never know what you’re going to discover, and there aren’t really many places like that. Even the people who kind of created the first concept shops, like [unclear 00:43:40] is gone, you know, and I think the retail industry needs more SHOWFIELDS, needs more places that are approachable for brands, because department stores, the current department store model is broken, the financial model isn’t one that supports small brands, it’s financially just not feasible. So, you know, as a small brand, where do you go, right? And, I also think the physical…the in-person relationship is so important, even though I think there have been these amazing technologies that have taken essentially old school clientelling and brought them online, which, you know, again, but it’s all about that relationship.
Katie Hunt [00:44:35]: I think now more than ever, it’s really easy to see the difference between in-person and virtual, right? There are beautiful Zooms that are happening where people are connecting and it’s meaningful, but I’m pretty sure all of us are going to shed a few tears when we finally get to hug somebody whom we love who we’ve been separated from.
Kelly Kovack [00:44:59]: Yeah. No, you know, I think the novelty of all of this has worn off.
Katie Hunt [00:45:04]: Oh yeah, it has for me for sure.
Kelly Kovack [00:45:09]: You know, at first, it was like…the uncertainty of it was unsettling, and obviously, you know, the loss of life, I mean, it was very scary, but if you – I don’t even know that you can put it aside, but if you do and just think of how we’re conducting business, I think it’s fundamentally changed how we’re going to do business. I was – we were talking earlier with Charles Denton, the CEO of Erno Laszlo, and he’s not bringing his people back until next June; the office will be closed. It’s really interesting how some people…how we’ve been able to work remotely, and a lot of people, like I’m at my mom’s, we’ve had this amazing opportunity to spend time with family because we can work remotely, but I think everyone has gotten to the point where it’s like, it would be great to be able to have a business meeting in person or to grab drinks or get on a plane.
Katie Hunt [00:46:12]: Oh my gosh. I mean, I think we’ve all hit the wall. I think there has been phases of this, and what I’m seeing around us right now because there isn’t a plan in place of what it’s going to look like for us to get out of this and the timeline around it, sometimes not knowing is the scariest part. I just think everybody just kind of hit a wall of, “Okay, I’ve done this for five months.”
Kelly Kovack [00:46:41]: Aren’t we done yet?
Katie Hunt [00:46:44]: I’m in New York City, clearly, and you know, some of the restaurants have reopened and you can sit outside and have these incredible meals again, and there are these crazy dance parties that are happening in the street where everybody is socially distanced and there’s a live band, and I think when I hit the wall, those are the things that bring me a lot of hope, because I think people will always find a way. They will always find a way to feel connection and to create community, and we are incredibly inventive as a species. So, I’m sure we’ll think of some cool things, but I think the Zoom days are over. If I go to one more Zoom cocktail party, I think I’m going to scream.
Kelly Kovack [00:47:35]: It’s really…it’s exhausting, and I always have to…I’ve got to look on my calendar, and I’m like, “Is this a Zoom meeting or not? Do I need to pull it together, or not? Who is it with?” There’s a lot of stress around that. In sort of looking at the future of retail, where do you see the pockets of opportunity? What do you think the future of retail is? I mean, we had a financial panel, and we had Richard Kestenbaum on, who knows all things retail, and his response is, “We’re going through a retail bloodbath,” and I was like, “Okay…I’m not sure I can argue with it, but I’m a little more optimistic.” But, there is, you know, I mean, with all things, kind of COVID was this accelerant; in one weekend we kind of fast-forwarded trends a decade, and you know, retail was broken, and you mentioned it before, no one was really acknowledging it. There was a bit of like, you know, an ostrich with their head in the sand, and they would make these small changes and COVID kind of came along and said, “Yep, no, retail is done, you’re going to need to reinvent yourself now.”
Katie Hunt [00:48:55]: Yeah, yeah, and no, I think that’s the right word, accelerant, and it was an accelerant in the e-comm front, and it was an accelerant in the physical front for sure. More people than ever are now comfortable buying things online and understand the convenience of that as well, so even if we were to reopen all of the doors tomorrow, the consumer that maybe wasn’t a traditional e-commerce consumer, was a bit older, is also now hooked on this convenience and this different way of doing things, so nothing should stay the same. If the consumer has changed entirely, we are not having the right thoughts if we are thinking as soon as this is over, we’re going to go back to business as usual. Take a look at yourself; you know how much you’ve changed during this time period, that means everyone else around you has. So, even if tomorrow we could open up the traditional retail store, it’s not what a customer wants right now, and it’s not going to be what a customer wants going forward. So, the accelerant happened, I think; what would have happened in ten years happened in six months, and it’s devastating, it’s devastating to jobs and to humans and to real estate and all of these other pieces of the world. What I think the opportunity is is for bigger brands going smaller and more curated. You have Nike opening 200 neighborhood stores and really curating around the neighborhood and around a specific store and around the needs of that neighborhood, and I think that’s really interesting. I have yet to see what’s going to happen with the mall of the future, and that’s where I am most fascinated, because the mall was always a space for entertainment and for shopping, and it’s a huge piece of real estate, and I just think inherently the anchors are now going out of business, the move theater is the anchor, to some extent, as well. It doesn’t work anymore. So, I think the future of retail is really going to center around curated, small, amazing moments that are really, really structured around the consumer and then something else that’s yet to be determined in terms of the larger spaces, and I want to be part of that conversation so badly, and I can’t wait to see what the outcome is going to be.
Kelly Kovack [00:51:23]: Yeah, I actually think that there’s…you know, there’s kind of, I don’t know, this cleansing moment, and so many brands are…well, not so many, a lot of brands are having kind of these clean sheet strategy sessions because it’s really given brands who want to look at their business and kind of reinvent themselves, or you know, a lot of heritage brands that kind of get stuck, or legacy brands that get stuck in, “Well, this is how we’ve always done it,” well, not anymore.
Katie Hunt [00:51:59]: Yeah, for sure.
Kelly Kovack [00:52:01]: So, there are a lot of these really amazing, amazing leaders that are pushing their teams to kind of rethink how they did things. But, retail, to me, I’m so excited to sort of see where it’s going to go, but I agree with you.
Katie Hunt [00:52:17]: I’m excited for the democratization of it, to be very honest.
Kelly Kovack [00:52:21]: No, I agree, and you know, I think another thing that’s happened is at least in the beauty industry, we went through this period of – and you know, I think we talked about this when we met where there was kind of this myth going on that it’s never been easier to launch a beauty brand, and I sat back and I was just like, “I’ve been doing this for 20 years, and it has never been harder. Sure, you can put some stuff in a jar and you can launch a website, maybe you could do all of that for $10,000, but I don’t know,” and I think this is also a little bit of a reckoning of the businesses that are going to come out of the other side, there are plenty of businesses that are exceeding their plans, but the interesting thing is they are not necessarily those high-flying, venture-backed unicorns; they are 20-year old businesses that weren’t the sexiest ones, no one was looking at them, they were profitable, they knew who their consumers were, they are really nice businesses, and you know, there’s this moment where it’s a little bit of a reality check, you need to have a solid business to kind of get through these times.
Katie Hunt [00:53:38]: Oh yeah. On the VC side, the conversation after we worked at Casper changed from hockey stick growth at all costs and acquisition to how do you grow a profitable business? And there was almost like a 101 class that kind of happened among the founders being like, for so long, people just wanted to see that at whatever cost, we were acquiring the most amount of consumers, now like we have to step over stuff, show profitability, and everything that’s going out is driving in that is greater than the output, and so now it’s just a very different conversation, it’s fascinating.
Kelly Kovack [00:54:18]: It is fascinating, because during that whole time, I was literally like sitting there scratching my head, because I’m like, “Okay, I know I don’t have an MBA. Maybe there’s something I’m missing here, and maybe it’s just like Kelly’s simple math, but if you’re not profitable, I get that you’re a billion-dollar business, but if you think of the size of some of the leaders…” the math just never made…I’m not, “It’s not a tech start-up.”
Katie Hunt [00:54:47]: No, if you have to spend $100 to get someone to spend $25, that’s never going to work. It’s just a bad machine.
Kelly Kovack [00:54:57]: Yeah. So, you know, I do think that it is a time for I think absolutely creativity and thinking out-of-the-box, and I think a lot of people are struggling, a lot of entrepreneurs are struggling, and not everyone is going to make it out the other side, but you know, I think that’s also part of entrepreneurship. I think we also lived through this period where everyone thought they’d launch a beauty brand and Estee Lauder would come knocking with a billion dollar check, and you know, part of being an entrepreneur is failure, and failure comes in many different forms, and so I think that it’s unfortunate that businesses won’t make it out the other side, but there’s going to be lots of opportunity created in the process.
Katie Hunt [00:55:43]: I’ve failed for sure.
Kelly Kovack [00:55:46]: Me too, me too.
Katie Hunt [00:55:49]: There are companies I would mention being a part of that you have never heard of.
Kelly Kovack [00:55:54]: Me too.
Katie Hunt [00:55:55]: That’s like…I mean, it’s like anything. You have to try, and if it was easy, there would be too many companies. There wouldn’t be enough for anybody to have a success. But, I mean, I’m hoping for a thriving economy on the other side of this where there are more companies than ever that are in the market, that are meaningful, that are doing meaningful things. If you look at 2008 on the other side of it, there were a lot of incredible companies built, and I do think that in times of hardship, sometimes some of the most amazing things are created. I mean, I look at my team and what they were able to do during a time period where resources were limited for us, we needed to close the doors, our revenue was cut off, and we were paying rent, and sometimes creation within rules and a very closed system can be really, really beautiful.
Kelly Kovack [00:57:02]: Yeah, no, I agree. You know, I’ve loved our conversation. I have one last question, and this is really…you know, you work with founders, you’ve been a founder, kind of is there…if you had to give someone one piece of advice to kind of help them through kind of this moment as a founder, what would it be?
Katie Hunt [00:57:27]: You are not the customer; the customer comes first. There’s so much to be learned from the people that you’re building for, and I think a lot of founders lose themselves in this idea that they’re the consumer as well, and as soon as you can create that separation and really talk to your customer and understand what they really want and really need, a lot of the fluff gets cut out of it, so I think it’s about always putting the customer first, and remembering even in your darkest moments that that does not mean putting your views first.
Kelly Kovack [00:58:05]: And if you ask, your customers will always tell you.
Katie Hunt [00:58:08]: Oh yeah, more than willing, and they’re brilliant. I mean, they know exactly what they want.
Kelly Kovack [00:58:13]: Yeah. Well, Katie, thank you so much for taking the time. It’s always…I know we’ve only spoken twice, but I feel like I’ve known you forever.
Katie Hunt [00:58:24]: I do too. I’m so excited, this was so nice.
Kelly Kovack [00:58:29]: It was, and I really – I look forward to being able to see each other face-to-face, and yeah, but thank you for your time and your insight, and your honesty. I think sharing your experience is always so helpful to other people to know that it’s not always perfect, it’s not always pretty, but in the end, it is knowing the consumer, it is.
Katie Hunt [00:58:58]: Kelly, always a pleasure. I think you know your consumer so well, and it’s one of the reasons I love reading everything that you do. So, it’s such a pleasure to join today.
Kelly Kovack [00:59:14]: For Katie, it’s a matter of customers. As many retailers with traditional formats slow to evolve and struggling as a result feed the retail apocalypse story line, SHOWFIELDS set out to create the most interesting store in the world. That was a big promise to deliver on, but one that it was well on its way to living up to. And then, there was the COVID shutdown. In true start-up fashion, the SHOWFIELDS team didn’t miss a beat, immediately setting out to reinvent its analogue concept that lies somewhere between art museum, immersive theater, and product showcase to the digital realm, in a new normal of contactless retail. It’s the focus of always reinventing through the eyes of a consumer that created a foundation of a creative and curious community of early adopters with an unquenchable desire for new brands, products, and experiences that happily followed SHOWFIELDS digital lead. The premise of the concept may be perpetual reinvention, but one thing is constant, and that is the laser-focus of putting the consumer first. So, in the end, it’s a matter of customers. I’m Kelly Kovack, see you next time.
Katie Hunt [01:00:32]: Hi, I’m Katie Hunt, and what matters to me is customers, and what I mean by that is always reinventing through the eyes of the customer, every experience that you build.
Kelly Kovack [01:00:45]: It’s A Matter Of is a production of Beauty Matter LLC, copyright 2020. You can find more content and insights on www.BeautyMatter.com, and follow us on social media @BeautyMatterOfficial.
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