Earlier this year, Lands’ End officially spun off from Sears — a separation many years in the making. The 56-year-old catalog retailer has been trying to prove itself as a strong digital retail force since. Now, the company is beginning to see the fruits of its labor.
Last week, Lands’ End earnings beat expectations; revenue hit $3.6 million, up 9.5% from the same period a year earlier. Earnings-per-share also were higher than expected, at 11 cents. While the company has closed all of its locations in Sears stores, it plans to open more standalone locations around the country. And it’s also using the decades-old data it has to reinvent its digital presence.
Modern Retail talked with Lands’ End’s chief customer officer Sarah Rasmusen about the company’s strategy going forward. She discussed how the brand has used its data to rebuild its digital experience, as well as how Lands’ End approaches platforms like Amazon. The conversation has been lightly edited for space and clarity.
What have you been prioritizing over the last few months?
Whatever we can do to improve our digital customer experience. And, lucky enough, we’re also opening stores.
On the customer experience side, you frequently tout the vast data you have about customers and how that has informed your digital experience. Can you talk a little bit about how you approach that?
The benefit of being a cataloger for a long time is that we have decades of great customer data — great behaviors. From a catalog when you’re a direct response company — when that’s your DNA — you know how a customer responds to something on the front cover of a catalog.
We’ve had credit card-based transactions for so long — not cash. We have this really rich history of our customer and how she behaves.
What do you do with that data when you’re only one boutique brand?
The use of AI, machine learning, whatever you want to call it has really permeated across the company, especially over the last 18 months. Third-quarter of last year is when we rolled out our own search engine.
What made us unique is our data science team was able to leverage this really great history of both our customer and the history of our products. Being a mono-brand or a boutique brand, we often carry the same products year after year. Take our turtleneck, for example. We have decades of [data about] the turtleneck. And we know how the customer will behave and what times of year she’s going to respond to that more than others.
It started out as let’s just see what we can do to improve the search and findability of our site. Now it has expanded into how we promote those products. For example, in a wave of 20 colors on a turtleneck, we’re using [the data] to say “OK black never needs to be marked down, because it’s always in season — people will always buy it.” Based on customer demand we can flex into what needs to be promoted at what level.
Do you think you’re in a special position to leverage this data?
Yes, we’re in a unique spot. Years of credit card transactions versus cash transactions. It’s sort of a unique DNA, like digitally native brands. Everything they’ve ever known is an electronic digital touchpoint — never relying on store traffic to measure how their customer is going to respond. And they don’t make decisions that way.
We kind of function the same way. We don’t have a large store footprint. So, most of our decisions are influenced by digital touchpoint. In some ways catalogers don’t get all “credit” for being digitally native. We were the original pioneers.
How does this data inform your physical store experience?
First and foremost, it’s primarily informing where we open our stores. Opening our stores where our customer is versus a location we might think is hot and hip. We are listening to our customer and what’s important to her in every single real estate decision we make. I think there are a lot of people out there that have not made real estate decisions that way — and we’re seeing that play out in other ways.
And then I think from an assortment in the store perspective, years and years of data that will say, “maybe we don’t put our heaviest down coat in Florida.” We don’t have a store in Florida.
How do you approach your customer experience strategy on platforms like Amazon where you don’t have a lot of control?
Carefully. Lots of those customers on Amazon are new. So it is absolutely a brand reach opportunity for us. As for working with Amazon, they are as interested in working with us as much as we are with them. We are in Seattle a couple of times a year, they’re here a couple of times a year. They are not a native apparel brand. If you look at the Amazon website, it’s still largely set up around a single SKU sell-a-book type architecture. So as they need to lean into apparel, they are learning that they need to flex into how companies like ours have worked for a long time.
Do you think Amazon is going to loosen the reins to make it more appealing for brands like yours to be on the platform?
I certainly hope so. We’re in a spot where we can push back on them when we don’t think that something is playing out right. Much like Google started to [be more open] with retailers — giving more information about how the search algorithms were working, how to win a PLA listing, how to win the click on the Google side — I think Amazon is going to need to start being more forthright with retailers in that regard.
What other platforms are you investing in?
Not going to disclose everything that we’re working on right now. I’ll say we have a small wholesale business with Walmart.com. We’re trying that out.
What is your major focus over the next year or two?
Just continuing to lean into mobile. I just read a quote: “mobile is the new front store window of your brand.” It’s where are customers are meeting us.
On the back end, what’s important there is site speed, quick checkout — Welcome to Lands’ End, here’s what you want, please check out. That’s just going to be top of mind. There is a lot of heavy lifting on the back-end side. As much as you can squeeze a personalized one-on-one experience into the form of a phone, that’s what we have to do.
Looking forward, as our store footprint expands, the expectation that the customer [wants] to see everything about her physical store on her phone as well. Big boxes brands — Target and BestBuy — have done a super job of embracing that.