Why Smart Merchandising Still Wins in an Uncertain World | Fashion Made S4E7

Here's the thing. I think at the end of the day, the brands that really make the most impact, they're in it for the long game. So it cannot be about what the transactions were last year or what is the 12-month plan today. It has to be about the seeds that you're sowing for 3 to 5 years in advance. And none of us have a crystal ball. So there's a lot of risk in this industry.

Welcome to Fashion Made. Kira Gannon, nice to meet you again. Um, welcome, welcome. Happy Friday.

Yes, happy Friday.

So Kira, you, you've, you're something of a, I would say, a bit of a planning czar, uh, in the fashion industry. Um, you're currently, uh, general manager and global, um, global GM for Ralph Lauren Sleepwear and Intimates and SVP. But you've, you've had a pretty star-studded career. So, um, Yeah, really delighted to have you. Thank you. Looking forward to meeting you in New York as well. You're going to be joining us at the merchandise planning event that we're running in May. So that's super exciting as well. But yeah, it'd be great just for our listeners for you to maybe introduce a little bit about who you are and what you do and maybe a little bit about where you've been as well. That'd be really great if you could do that.

Yeah. Yeah, well, thanks for having me. It's great to chat with you. And I am excited to see you in the greatest city in the world. So we'll see you soon. Sure. A little bit about my background. I've spent the last 25, 26 years leading sales and merchandising teams in an industry that I love with a passion for product and a curiosity about consumer and really trying to blend what I would call the combination of creative and commerce, you know, to really try to win the hearts of consumers around the world. And as you mentioned, currently I'm leading the Ralph Lauren sleepwear and intimates team, but I've had this really interesting opportunity to work with multiple categories, multiple business models for usually large global brands. And currently live in New York, as you mentioned, but have spent most of my career in and around the United States from the West Coast to the East Coast. So happy to be back. Back on the best coast, I would say.

Are we just— I mean, I, I don't know. I love New York, but I also, I do like to spend time in the sun as well. So I love New York in the summer. Let me say this. I love New York in the summer. By May, I think it should be quite nice weather now.

Yeah. I mean, the best, the best time, or at least the time where you have everybody out and about, which is obviously great for our industry, is spring and the fall on the East Coast. So. We're in that zone right now. We hit, you know, 60 degrees this week in New York. So there's been a lot of buzz and excited, excited for the tables to turn from snow and ice.

Yeah. And tell me a little bit about that for those who perhaps don't work in the planning world. They're not in the, I guess, the business. I mean, I would attribute your role, you know, you've got to manage the creative teams and you've got to somehow not stifle the creative teams. But you've also got to be like, you know, the dad with the pocket money and saying, listen guys, this is what needs to happen. So, tell me a little bit about how you found that kind of, that challenge or that balancing act at the brands you worked at, Levi's and Ralph Lauren.

I think, you know, much like in life, you really, you have to be able to find the superpowers of the people around you. And I think where, I don't see it working is when people are just in a silo and they're not really listening to the creative vision that is out there. We all are inspired by creatives, you know, throughout our lives and definitely throughout this industry. And what has been really interesting for me in my career is getting a chance to work with said creatives and really trying to listen to what they want to build. I, every day I'm dealing with designers who have these visions that are never going to make money. And so you try to find that cherry on top that satisfies their needs so that they can continue to create for you and try to build out really what is the commercial opportunity under the covers. When I think about the brand that I work with now at Ralph Lauren, what kept the lights on for so long was a short sleeve mesh polo shirt in men's. That's not super creative, but— No, everyone has merchandise. Everyone. Yeah, everybody, right?

Yeah.

But by figuring out the right formula, the right inventory formula and merchandise planning for that particular category, we were able to enjoy all of the creative visions of the design and merchandising teams to show us where we could push and to show the consumer where the lifestyle was leading them. While we kept the lights on, right?

And talking about that specific item, because, you know, I'm 43 this year, and as a young man, everyone was wearing those polo shirts, but there was Lacoste and there was YSL and there was Ralph Lauren. And tell me about, like, when you've got a competitive space of that nature with that binary of product, how do you find a competitive edge there? Like, that's an interesting— I've never really thought about that, but how do you?

Yeah, I think the most important thing is to be true, to be authentic to your brand and to what you've ever tried to build. So, that is a Ralph Lauren suggestion or item, right, in terms of the polo shirt. But I also think about my time at Levi's and the 501 as an example. And Nobody really needs another jean or another polo shirt or another belt or another bottle of perfume. I think what the amazing part about this industry and about the role of a merchant is to bring all of those experts together. So in this case, we're talking about marketing. How are you building that lifestyle to make that consumer feel like they want to be a part of your world? And ultimately, they're buying an item that maybe they can get somewhere else, but it's not attached to the same brand lifestyle. Same idea. So, there is a constant debate, right, of like, what is the most important? Is sales the most important? Is design and product the most important? Is marketing the most important? And it really just depends on the journey, you know, where that expertise is coming in, because they're all equally a part of the package. And if we didn't have great marketing and we didn't have a visionary, i.e., Ralph Lauren, or we didn't have the inventor of the blue jean, as an example, then, you know, none of it really matters because the consumer's not going to connect. So I think it really is a balance, but I think mostly it's about being authentic and telling your story. And, you know, like Crocs as a company, they shouldn't go out and start to build perfume tomorrow. They need to be authentic to what they've built. And I think the consumer way smarter than, and every year getting smarter and smarter, really appreciates that and lives into that lifestyle that you're building for them.

100%. 100%. And it's a really interesting subject, like the loss of the consumer, the loss of that contact, and how obvious it is that it's wedded to the loss of identity. And there's a lot of stuff coming through around experience, right? About having a bit more of a visceral impression of what that brand is.

Yeah.

And I'm interested from your perspective, you've obviously made an incredible career within enterprise brands, but what do you think, um, enterprise brands specifically can do to attract, um, a demographic that is very, very different, you know, in terms of the young consumers that we have around the world? They're very different now and their motives and their Buying patterns are very different and their loyalty is very different. And I know that this is a boardroom discussion with a lot of our community. What are your thoughts on how enterprise brands can combat this?

Yeah, I mean, you have to— there has to be evolution. And what does get me worried sometimes is when these traditional or legacy brands don't evolve with those times. Everybody wants the newest, best consumer in the mix, right? Everybody's going after the youngest so that they can grow with them. But there are what I'll call legacy brands who refuse to do business with like a Zalando or an Amazon. There are brands who don't want to go into wholesale or who don't want to run their own stores. And I think that when you get to that place, space where you're refusing the evolution, the timer starts to tick because there's just no way for you to continue to engage those consumers. But here's the thing. I think at the end of the day, the brands that really make the most impact, they're in it for the long game. So it cannot be about what the transactions were last year or, you know, what is the 12-month plan today. It has to be about the seeds that you're sowing for 3 to 5 years in advance. And none of us have a crystal ball. So, there's a lot of risk in this industry. But what sometimes when I'm having these conversations within my own leadership teams, you know, we have to remind ourselves that we're the ones teaching them where to go. And so, consistency, I think, is really important. So, if you as an organization or as a sector determine the next greatest thing is apps, as an example, or TikTok shop or whatever the channel is that's like the moment, then you stick with it and you really have to put the investment and the dedication in that for the next, you know, 18, 36 months, whatever the timeline is, so that you can really start to like reap, you know, the benefits of that. And I think there's a lot of impatience, particularly in the United States and outside of the luxury space. There's a lot of impatience brands who are looking for today's, today's results versus like the long-term results of like the way Hermès looks at it.

Um, that sounds like, sounds like the crypto industry. If you talk to the crypto industry about marketing, they're like, where's my conversions? Why have I not got 100,000 people immediately buying this? So like, really? Okay.

So that's interesting.

So you're saying that one piece of advice would be choose your lane and stay the course and see things through and have some patience and realize that, yeah, yeah. Yeah.

And I mean, choose your lane, but be, you know, don't be risk adverse. I mean, I think one thing that I like to tell people is I love the organizations that really believe in failing fast and moving forward. So, if you're afraid to make a mistake or you're afraid to go into a channel of business or to evolve in a certain way to attack a particular new consumer, you're never going to get anywhere. So, we do have to try and we do have to have a level of risk. I think I can think of a lot of examples where that was a concern. I mean, even at Levi's, going after the female consumer in a bigger way because men's was sort of like the constant major focus of that type of brand. And men's denim was really like, you know, leading the charge. So how do we build an organization that is more focused on developing that female consumer? And it was a long game play. It was like learning and making mistakes and going back after it and really developing trust with her as a consumer and picking the right influencers and the right marketing plans and all of those pieces. So I think every brand, big or small, is challenged on how do I fail fast and move forward. And I think the big ones, the enterprise organizations, as you mentioned, the ones The ones that don't move like that are the ones that have the slowest growth. So.

Mm, mm. And you mentioned something there that I read an article about. I think it was a Boston Consulting report.

Yeah.

About demographics and about changing demographics in North America. And how much of your role is looking at what's coming in 10 years, 5 years? Is that, is that something that you have to oversee with your teams as well?

Yes, but you know, it's a, it's not a crystal ball, so, You know, it's almost like what you want it to be starts to be what you look at. But I think, I think there's truth in a combination of experts in the market, of analysts who, you know, you have to sort of read everything to be able to come up with what works for your company, what works for your brand. And it was funny, I was just talking with a friend the other day who was on a panel in DC, and they had all sorts of interesting people sitting on stage. And they were all analysts. They were all covering particular areas of this industry. And he said, at one point, I wanted to show all of the things that they had believed were going to happen, this group of 4 people, and how many times they were wrong. And he said, But I thought that might be a combative approach, you know, to the conversation. But it's, it's true. Nobody's really accurate. It's more of like, where's the, where's sort of like the direction you want to take the organization? What are the analysts telling you? What are consumer insights telling you? And finding the path that you almost build it so that they will come kind of thing. But I think we can all do a little bit more long-term planning. I think in North America in particular, it's it's pretty centered on the 3-year plan. And even some of them can't look that far out. You know, some of them are just focused on the next year, next 2 years, which I don't think is the right approach here.

And it's interesting you mentioned geography there. So do you think that doesn't happen in Europe and Asia to the same degree?

Well, I'm thinking when I say that, I'm thinking more on the designer space and in the luxury world, which is more centered in Europe than it is in North America. And it's a different take. But you're right, it's probably more of this space, if you will, this sort of contemporary and accessible space where a lot of that effort is happening that's more about the near future than the long-term future.

And if you think that the merchandise planning role is kind of like the aorta of the fashion business, right? And it's feeding all of these different divisions and having to keep everyone happy and keep everyone motivated and all the body parts moving. Now, if we look at, if I look at what's happening in the service industry, in events and digital, where there is a huge migration towards task-based AI agents doing different things.

Yeah.

Now, within a fashion business the size of, of yours, like, how much have you already started to implement for task-based AI? How, you know, have you got rid of all of your staff and is it all now computers? Or, you know, How important is that AI strategy? And does that also sit on your desk as well? Is that another issue for you to deal with?

No, you know, no, it's not something I think about on a daily basis. I'm sure that there are brands out there and companies in the market that are way more focused on this than the ones that I have worked with. But my, there's elements of it, and I think that that's, kind of like crypto, right? Like, there are elements of it that are really interesting that you need to somehow move into your life. But to go all AI, I think, is a ridiculous sentiment. I mean, it— it's— there's, there's too much emotion in this business, first of all. Um, and I think some of that emotion results in great success, so we don't want to lose that. Um, the algorithm is not always completely accurate, but there are elements of it that are really helpful as it relates to you know, a digital approach to product. There's, there's a different way to be presenting product to the consumer, to the customers. There's a different way to design. There's a different way to capture data so that you can make decisions that are not AI-generated. But, you know, the data points that you're getting are more tweaked, I'll say, by AI and the approach there. So, I work closely with an IT group who provides me with, you know, different ways of leveraging that type of information and the way that we're using it. But I don't think that our industry is, and I'm sure that this is a good debate actually with a group of people, but I don't think that our industry is laser-focused on how to leverage AI in the best ways. We probably could use more of it on the insights piece. So, as consumers provide feedback, it's not always— the algorithm for that is not always so great. And it's not being distilled in a way that's actionable. And that's an AI opportunity. So, I've seen some of that come through. But we— this business, I think, is way more traditional than other businesses are. I was working with a company that was incredible. They figured out a way to make alternative leathers. And my role in this organization was to build a commercial platform and run a P&L for a B2B business. And learning so much more about how to bring alternative leather to the mix, I started looking at categories like automotive and home furnishings and the way that they were using AI to determine the next best thing was way different than how an accessories company was determined. So, I think that every industry is a little bit different, how they go after and use AI. And I think that's the beauty of it, is that it should be different everywhere.

Absolutely. And I think, again, I'm keeping up to speed on tech news, and I read an article about AI to AI agents. And the comment— So, actually, I think on the e-com side, or the AI-com side that is to come, I think is almost more important because there is a world where you or I, Kira needs to order a table and she needs the instructions in Japanese and she needs it sent to this address and it's agent commerce. And I think that's an area, and you're right, fashion, you know, for the most part, you've got some billion-dollar brands that still have manufacturing processes that are 200 years old, right? You know, it's, you know, so it is, it's an art, it's an art industry.

Isn't it? You know, and so you do need the science in there to, to maximize. So I just think it's how— and most of the big companies too, they have their own AI group. So the agents, I think it's just a, it's just a different approach. The agents are, you know, flying into those sort of startups who are trying to figure out Amazon. And I think that that's really important too, but In my experience, it's been dripped to me in different ways internally versus leveraging the outside world, which is probably way faster and has way more interesting insights to share and ways of working than probably the internal teams do because of all the tradition that you just mentioned and how we go after building product and getting it in front of consumers.

Hmm. And let me ask you a question because Again, I think that this is affecting a lot of sectors, but I'm not clear on how it's affecting fashion yet. Maybe nobody is. But Mr. Trump being president in the United States and the kind of nationalism that's spreading, not just in America, but all over the world and the tariffs and the discussions around—

What tariffs? What are you talking about? So, it's the topic of the day, isn't it?

Yeah, it is. I mean, it'd be remiss for me not to ask, but I'm genuinely interested into how, from a strategic, from a board-level perspective, how you guys then look at that and how you plan for that. Is that something that keeps you up at night? Is that an important element at the moment that you have to kind of tackle?

Absolutely, it keeps me up at night. I think, you know, going back to, I do believe in long-term planning. I'm trying to find the answer, the long-term answer here that makes sense. I don't— it's not super clear to me yet why, how this is going to benefit everybody. It is a struggle, I'll say. I mean, ultimately what's happening is we're all trying to figure out who's going to pay for it. So this type of stuff doesn't just like happen with no problem. I mean, We manufacture all over the world, a lot of people do. And we also import products into lots of areas of the world. And we have complex shipping arrangements with customers and factories. And so each step is now a new negotiation of who's really going to eat this. And I think at the end of the day, there's no way the American consumer and beyond, to your point, because there's all sorts of like back and forth now happening. There's no way they won't pay for it somehow. So we've tried, we've tried to protect that as much as we can. And we have great relationships with factories, you know, in China as an example, but, but also elsewhere that understand the impact that this is going to have and have been great. Our organization understands the impact and has tried to look at the long long-term effects so that not everything comes down at once. Um, and I would say also the buying community, from a wholesale lens, has been also very aggressive in figuring out, okay, what can we take on on our own and what can we help you bring to the consumer? So there's a weird camaraderie going on where everyone's trying to make it not as painful. Um, but I think this year we'll, we'll see it really come to fruition in 2026 when new merchandise hitting floors. But I think we're going to see a pretty big impact next year.

Okay, that's interesting. I'd like to push you on what a big impact means, like in terms of, you know, bull—

Yeah, I mean, I mean, we're talking, you know, we have 20% tariffs now coming at us. And so does that translate into increases at retail of 20% higher on products? No, not necessarily. But in some cases, you might see that because there might be some products that you just simply can't change. Change the price on for one reason or the other. So, but today it's an annoyance and it's a negotiation and it's digging through the data to figure out how to lessen the impact. Next year is when the consumers are going to start to get angry. And I don't, I can only speak to the fashion space. I'm sure you've had conversations beyond that, but this is not the only place And in some cases, not the worst place to work where it's happening. But it all comes down to like this discretionary spending. It's clothing. You're buying into a lifestyle, as we were talking about earlier. You don't— it's not always a need. Sometimes it is. Everybody needs a pair of underwear, but you may have some. So the discretionary spending is going to buy more next year because they're all going to be a lot more expensive. So I think that's what we're all trying to reduce the impact.

Yeah, interesting. That's really interesting. And so in terms of like this year, what is the— what's the plan for, for your division and for the whole group? Like, anything exciting, any aggressive new lines, anything that's coming through that?

Yeah, yeah. I mean, we, you know, I, I have this fun opportunity to bring a new category into the markets that is under the umbrella of a revered and well-loved brand around the world. So there's no negativity about, can we make any more pajamas with bears on it that are polar bears? It's all positive. I think the logistics, some of the operations, some of the costing that we just mentioned, that stuff is a little bit more difficult, but definitely very exciting to start to see the market find a new entry-level price point for Ralph Lauren in the mix. And we represent two brands in the market. One is Lauren, which is, you know, really a more feminine brand for Ralph Lauren and elegance, sophistication. This is really what they stand for. And then there, we also have the Polo Women's brand. And the company I work for works on many other brands besides that. You know, this is just my scope of responsibility. And you're gonna start seeing Polo in a lot more places for sleepwear. We have a ton of influencer excitement and interaction. So that's been really exciting. We're relaunching Polo Intimates in the market for 2025. So you're gonna start seeing some very cool bras and panties come out. So there's a lot of fun stuff. I mean, that part is the best part of the business, is building that experience and that expression and delight and surprise, I'll call it, for the Ralph Lauren customer who may not know that we're doing these categories now. So that's been really fun to bring to life.

Amazing. Amazing. Well, listen, it was absolutely really amazing talking to you. And yeah, I—

Thank you so much. You too. You've been a pleasure to get to know. I appreciate all your insight.

I'm looking forward to— you're going to take me out for dinner when I come to New York?

Absolutely.