A Business Idea With Legs

A Business Idea With Legs
LittleMissMatched’s stores and Web site cater to fashion-forward tweens. But as the company grows, it’s struggling to maintain its unique brand identity.

Courtesy LittleMissMatched
What’s In Store: Inside a LittleMissMatched retail shop
By Carlye Adler | Newsweek Web Exclusive
Dec 8, 2009 | Updated: 12:17 p.m. ET Dec 8, 2009

When Jonah Staw talks about his business, he uses words like “disruptive,” “innovative,” and “experiential.” Those are some hefty words for a man who makes kids’ socks. But his company, LittleMissMatched, aims to sell something bigger than socks—and not just because their “pairs” come in threes and are all mismatched. Staw, 34, founded the company in 2004 to inspire a “nothing matches, anything goes” attitude among his customers.
The idea has had, um, legs. In the past five years, the New York company has evolved into a lifestyle brand, with products including reversible shirts and skirts, inspirational books (The Artist in Me!, The Writer in Me!), and a bag of bedding that allows for 384 combinations. (”Reinvent your look every day of the year,” exclaims a delighted Staw.) There’s also a line of furniture made of dry-erase boards so that kids can conjure their inner Picasso on their nightstand or bed without parental repercussions.
The company, which pulled in $32 million in retail sales in 2008, does its biggest business in its own retail stores, such as ones on Manhattan’s Fifth Avenue or at Disneyland and Disney World, where colorfully clad tweens flock to take pictures and buy armfuls of mismatching merchandise. But as the brand grows, it’s increasingly venturing into boutiques and getting picked up by wholesale partners, including Macy’s, JCPenney, and FAO Schwarz. Now, Toys “R” Us is coming into the mix, with 347 stores now carrying the socks.
Staw asks NEWSWEEK’s Small Business panel : “The difference between strong growth and exponential growth rests on our figuring out how to translate our brand into another retailer’s four walls so that it inspires the same consumer reaction as our own stores do. How can we convert our four-wall experience to another venue? Our brand is about being unique and different, but what’s so unique or different in someone else’s stores? Do we adhere to the rules and expectations of our partner stores? Or do we adjust the assortment and what makes our product unique depending on the customer base? How much of our mixed-matched madness do we apply?”
Roxanne Quimby
Quimby is the cofounder of Burt’s Bees, one of the most successful natural skin-care lines. She sold 80 percent of the company to AEA Investors, a private equity firm, for an estimated $175 million in 2003. In 2007, Clorox Co. bought the company for nearly $1 billion. She is currently working on an organic children’s clothing line called Happy Green Bee.
LittleMissMatched will have a certain amount of square footage, and they can use their own fixtures and create their own environment and own little world in any of their partners’ stores. At Burt’s Bees, we had a very small amount of space in personal care. Our products could have easily become lost. We created shelving units that were always recyclable (first wood, then cardboard, and later metal) and we were able to turn our products, which are pretty small, into the hero of the display. You pay for the display, but I would charge $150 for it and give the stores free retail worth $150 as a way to offset the cost.
Don’t get trained sales people [to work in another company's department or toy store]! No way! What we did at Burt’s Bees was hire a great corporate trainer. She was on our staff and we would send her [to meet with our retail partners]. She had been an actress and a model, was really entertaining, really pretty, and well-dressed. She was inspirational, which was important, because people were looking at her skin and thinking, “Oh, my gosh. I could look like her!”
Over breakfast presentations, we’d introduce our products to a store’s buyers and at some point during her speech, our trainer ate a Burt’s Bees product. And she said, “This is so good!” That sent a great message that we used earthly pure stuff like you’d find in your kitchen, and we proved it when she ate a spoonful. That differentiated us. They truly didn’t forget it! They wanted to tell that story in their stores.
This works because all the people in the stores become ambassadors. They have a little ownership in the product. You’ve fed them, entertained them, given them a few samples—and you’ve trained them, giving them all the sales lines in bullet form. LittleMissMatched should hire a trainer, and make sure she’s adorable and a performer! They should do it around a meal, like dessert! And give a cool gift bag and fill it with propaganda and samples. Plan it around a trade show when a lot of people are in town.
The emotional attachment with customers is key; it needs to happen. LittleMissMatched should establish an emotional connection—a heart connection—with parents and grandparents since it is selling a product for children. They should do photo shoots. (Every parent totally believes their child is the next Audrey Hepburn or Brad Pitt.) Acknowledge the child is adorable. At Happy Green Bee, we had a photo shoot where parents brought their kids to the stores and wore the clothes. Store sales went up, not just for our stuff, but on everything in the store. One time a storeowner told us, “I sold a $900 stroller from the photo shoot.” It’s good for stores, good for moms, and good for brands. It’s very high-touch. It’s very emotive. After, put [the pictures] on your Web site so they can print it.
As far as adapting: No. Don’t compromise anything. They should stay true to who they are.
Jeffrey Hollender
Hollender, the cofounder and “chief inspired protagonist” of Seventh Generation, led the company to its current position as the leading and fastest-growing brand of natural home products. After years of being sold exclusively in health-food and specialty stores, Seventh Generation’s paper towels, diapers, and cleaners can now be found in chains such as Kroger and Target. Last week Hollender with Kaplan EduNeering launched The Sustainability Institute, an educational initiative that helps businesses adopt a sustainable agenda. His newest book, The Responsibility Revolution, will be out early next year.
There is a robust opportunity outside of the retail experience. One of the best places LittleMissMatched has to tell its story is online, not only on its own site, but selling through a third party, like Amazon.com. Amazon just bought the largest [online] shoe seller, [Zappos.com]. They’ll need a lot of socks to go with those shoes. Space is not at the same premium online, which allows you to tell a story that is difficult to do in someone else’s retail environment.
They also have to work on their own Web site as they expand into a retail environment that they don’t control. An e-newsletter is a great starting point. Our primary Seventh Generation Nation is much more than a newsletter; it’s an online community that is a source for everything: product ideas, feedback, and we have an area called Ask Science Man where customers can specifically ask technical questions. We offer coupons and do the traditional things, but it’s also a way of engaging people. It’s growing at 10,000 to 20,000 people a month.
The LittleMissMatched Web site is very product driven; its focus is “join my e-mail list” and special offers and new releases. That’s what everyone is doing. That isn’t deep enough or comprehensive enough to build a relationship. To become more resilient to competition and to build the business to the next level, the site needs to become more mission driven.
Their unique, disruptive behavior is what has caused them to be a success. That’s what customers like. They have to be very, very careful about letting a retailer insert their own needs in between themselves and their consumers. Before I made any changes to my product line to accommodate my retailers, I asked my customers. The answers lie with the consumers. The dedicated consumers will tell them what they don’t like.
Jeff Swartz, Timberland
Swartz is CEO and president of Timberland, which was founded by his grandfather. The company, which gets socks (its own SmartWool), sells its products through about 215 company-owned stores as well as ddepartment and athletic shops across the world.
The hardest thing to do is to present emotions in a derivative context. There are examples of brands that are brilliant at wholesale and re-tail, like Coach and Armani, but they are more exceptions to the rule. Ralph Lauren is great at the wholesale shop within a shop. He sells paint in DIY shops. It’s that powerful a brand. Toys “R” Us and socks? It’s harder, but not impossible.
You can’t change the rules of the game at [a big retailer]. It’s their store. You don’t get to do it your way unless you’re as powerful as Ralph Lauren. Let’s go with a different objective: let it be acceptable to us as a brand—acceptable, but not optimal.
LittleMissMatched should get the best presentation it can, but understand that it won’t be good enough. Staw shouldn’t lose sleep over that! Distribution is just where you sell. LittleMissMatched should put its energy before and after distribution. Spend money to drive kids to the coolest, most interactive, most powerful Web site that you can build. Change it to become more customer-owned: have pen pals, pictures, music, give them a chance to make contribution to the world. What’s at Toys “R” Us then becomes less important
At Timberland, we are respectful of Macy’s, but we don’t succeed even if customers buy our products there. There’s a whole private-label industry. Macy’s wants to sell Macy’s products. (Toys “R” Us wants to sell its own brand, so Staw is right to worry.) Retailers do not have our interests in mind. No matter how good the store, customers are still not going to get my passion. Instead of falling on your sword—Can I transform distribution?—accept distribution and find a way to have a conversation after. Use the Web site to control the customer experience; I can’t think of a better technology to do that.
Sheila Johnson
Sheila Johnson is the cofounder of Black Entertainment Television (BET) and the first female African-American billionaire. She is the CEO of Salamander Hospitality, a portfolio of luxury properties and a partner in ProJet Aviation. She is the only Afircan-American woman to have ownership in three professional sports teams, the WNBA’s Washington Mystics, the NBA’s Washington Wizards and the NHL’s Washington Capitals.
Staw has a right to be scared. This is where companies start to lose control. And stores don’t just cut out a space for you. You have to pay rental costs for space. A certain amount has to be sold to pay for the cost, and if you don’t sell, you have to leave the store and maybe pay an exit fee.
I’d like to suggest another alternative: LittleMissMatched should look at sports arenas. There are so many kids and families there. They come early, they eat, and parents are looking for something to buy. They can have kiosks in these arenas. I know I’d love to see them during WNBA Season. There can be a LittleMissMatched day for families. Why not? We have days for dads and daughters and for breast-cancer awareness. The cost is not at all high.
Tweens are the hardest to buy for and LittleMissMatched has something really exciting. Parents are looking for this. They have to get people to understand it, and there are so many ways to do this [beyond in retail space]. Get on the Today show!
The cool thing about this is whether people have a little or a lot, we are all programmed that we have to look together. Staw tells us it’s OK that things don’t match. It’s time to come up with a whole marketing campaign about how it’s cool for everyone to be mismatched. Talk to Tim Gunn at Liz Claiborne. He has the cleverest one-liners. Tell him Sheila Johnson sent you!
© 2009