Podcast 214: Chris Bossola, CEO Need Supply | The New Luxury Millennial Customer

Apr 24, 2019, 8:51:29 AM

Chris Bossola  
Bob Phibbs interviewed Chris Bossola while attending ShopTalk19. Chris talked about the new Millennial luxury customer he serves, their buying habit and starting up a new retail business.

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Bob: Thanks for joining me on the podcast. Today I have Chris Basola, and he is from Need Supply. So welcome, Chris.

Chris: Thank you, Bob.

Bob: So, what is Need Supply?

Chris: Need Supply is a premium streetwear luxury retailer. We have two platforms, needsupply.com and totokaelo.com. We have brick and mortar stores in Richmond, New York, Seattle, and Japan.

Bob: How come I've never heard of you before? Am I not your target market? Be honest.

Chris: We might have some shoes you'll like.

Bob: So, streetwear. So, what is that, for millennials? Is that what it is? It's luxury?

Chris: Yes, our target customer or the majority of our customers are millennial and gen z customers.

Bob: And, like, sneakers and backpacks, and...

Chris: No, it's a combination of... It's a range from Stucci to Balenciaga, so...or Vans, or Nike, or Levis, or Lemaire, or Rick Owens, so it's the gamut.

Bob: So you guys curate the selection? Is that what makes you different? I mean, I can get a lot of those brands at Nordies and some other places, too, right?

Chris: Both of our platforms have a very unique point of view, very curated. An example, a customer once left a comment on Instagram that's one of my favorites. They said, "Need Supply has... I know they have hundreds of brands, but when I go to the site it feels like a mono-brand experience. It feels like a brand itself."

Bob: Wow. That was good.

Chris: Right. And that to me is what differentiates us from some of the bigger platforms you're talking about.

Bob: And how long have you guys been around?

Chris: Twenty three years.

Bob: Wow. And you were a merchant before. So how did you start out in retail?

Chris: My degree was in corporate finance, and I went to be a trader in the Nasdaq stock desk, and that lasted for two months. And so I quit and did a few entrepreneurial things and then opened up a vintage Levi store in Richmond, Virginia.

Bob: Where are we, in the 80s now, or 90s?

Chris: This was '96.

Bob: '96, okay.

Chris: '96, and 300 pairs of jeans, $15,000 on a credit card, and went from there.

Bob: Wow.

Chris: And the premise was bringing things to the marketplace in Richmond, specifically, that weren't available to the customer there. And we just kind of followed that model and continued to bring new products to Richmond. And then when we got online, we needed to bring new products to that consumer, and...

Bob: Were you the buyer then?

Chris: Oh, yes. Oh yes.

Bob: But you're not exactly the youngest guy around, I mean.

Chris: No, I'm not the buyer anymore. There was a point where some of the more talented members of the team would look at me and say, "Why are you picking that?" so I realized it was time to step down and focus on other things.

Bob: So, how do you gain your new customers? Instagram? Is that pretty much what your brand is? Is it... are they...

Chris: It's some traditional digital marketing. Instagram is a big channel for us. We're very image-driven. Both of our platforms are very image-driven, in the sense that we take beautiful pictures of the product that we sell and I think Instagram is a great platform for us in that regard.

Bob: And then do you have like a "Buy this now" kind of a message, or is it just a picture and "If you want it, the link is in the bio," kind of thing?

Chris: On Instagram? I mean, we create a lot of original, authentic content, including fashion editorial, but also stories about new artists, and things that are going on culturally. And so we'll push that out on Instagram and people will either click through to see the product or read an article that we put out there.

Bob: That's so cool.

Chris: It's our way of communicating a set of shared values with the customer that that has followed us for a long time. And I think it builds trust with the customer, and it shows, you know, that we have shared values.

Bob: So, what was the biggest challenge you had founding your brand?

Chris: Trying to figure out... Trying to find a book that taught you how to do retail.

Bob: I have one, the Retail Doc's Guide to Growing Your Business.

Chris: Okay, well, you didn't have it then.

Bob: I didn't have it then. So there you go, bad on me.

Chris: And I had no retail experience, so...

Bob: That's not that unusual. A lot of people are like that.

Chris: Yes, well...

Bob: And then they realize, like, "Oh, I should've known this." Worse would be people who decide to open a bed and breakfast, and, like, worse than that would be restaurant people who have no experience, like... Actually, then bar experience. I mean, all of those, just like, "Oh, we'll open a bar. It'll be like Cheers." No, you're never getting home until three in the morning again. And you're going to come home smelling like puke, and so, yes.

Chris: Retail. So, figuring out how to do retail was the hardest part.

Bob: You had a background in finance, so you knew what your margins were. You knew what your conversion rate... You knew what your turns were, right? So you knew all that kind of stuff.

Chris: Yes, yes. We pretty early on brought on a company called RMSA, I don't know if you're familiar with them, so Retail Merchandising Service Automation. So, they helped us put together an open-to-buy plan, literally when we had 250 square feet...

Bob: Wow, that's small.

Chris: ...and we were doing $80,000 a year in sales. We probably didn't need them at that point, but they really taught us discipline, and open-to-buy, and processes and things like that.

Bob: Well that's...

Chris: Turned margins, GMROI, all that good stuff.

Bob: Yes, but that's so important because, if you don't, that's your money sitting there, right?

Chris: Yes, yes. That's our biggest expense.

Bob: So, tell me, what do you think a millennial is looking for when they're going online? You said it's your idea that you're a mono-brand, that feeling of it, but they have so many more choices than they used to, right?

Chris: I was just actually reading some comments or some notes from somebody who shops with us. And he talked about the fact that he comes to our site to get inspiration, to see what's going on, whether it's new collections that have dropped or just an event at the store. He may take some of those images and text them to a group text that he has with some friends of his to see what they think about this shoe or that shirt. He's going to peruse Instagram, not only our store, but other stores, and put stuff in his cart, and then eventually pull the trigger. But there's a lot of community engagement and influence going on, with friends and, you know, people that he looks to for guidance and that type of thing.

Bob: He does. It's not just a product on Instagram. It's that feeling that he's going there for something more than just the product, right? Because you can get the product anywhere.

Chris: Yes. I mean, you can't necessarily get our product everywhere, but it's... You know, they... I think this generation is...and I hate to say that, but our customer is buying...they're buying... The new luxury customer would buy something to maybe, kind of, signal that they spent a lot of money, right?

Bob: Right, absolutely.

Chris: This is a very expensive thing. This consumer buys things to signal that they have some cultural knowledge. They're aware. They know why this particular piece is important. They know why this designer is influential. They know that it maybe is limited and only available on a certain thing. So it's a way to signal and show that they are culturally literate.

Bob: And then it's a way to give the story around it, right?

Chris: Yes.

Bob: So now you've got the story with just like the picture around it. I like that. So, tell me, what's one thing good about retail?

Chris: My favorite part of retail is that it never is the same. It changes. I used to say it changed every season. Now I think it changes every week.

Bob: Yes, exactly, exactly, exactly. No, I appreciate that. It's a lot of disruption going on. It's a lot of people trying to figure it out.

Chris: Yes.

Bob: But a lot of people like you don't have to be a Macy's or a big-box. You can just play in this smaller place, and just do a better job and just attract that smaller following and be quite happy with it, right?

Chris: Yes, and that small following... The luxury market is going to be 500 billion dollars by 2025, and 40% of that will be millennials. So, it's not that small of a niche.

Bob: Yes, except they return half of the stuff.

Chris: A pretty big opportunity.

Bob: See, that's what's so interesting to me, is retail now, you have so many places a young one can rent the shoes, the dress, the jewels, all the jewelry, and then like Cinderella, it goes away the next day. And yet... So we're hearing that they don't want to buy stuff. They really want to rent. But you're not seeing that, because they're really buying that from you. It's not a rental service.

Chris: No, they're buying it from us. I mean, there is a big resale market. You know, Stadium Goods was just acquired by Farfetch and a couple of other versions of that. So, they're buying things, then they're using the reasoning that "Hey this bag is going to maintain its value or go up over the next two years. So I can use it and then trade it in."

Bob: Like artwork or something.

Chris: Yes, yes.

Bob: Amazing.

Chris: So, it... Yes. There's a lot going on in our space.

Bob: That's right. Well, good. Well, thanks for being my guest today. I appreciate it.

Find out more about Need Supply here.

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