- Millennials have the most spending power of any generation and retailers must shift their business models in order to reach them
- Peekaboo Beans uses an omni-channel that engages sellers through social platforms
- The company has created a lifestyle brand apparel product for children that fosters play
When iconic retailer Sears Canada locked the doors on its remaining stores earlier this year, it officially became yet another victim of the "Retail Apocalypse." Sears had plenty of company. Brick and mortar retail stores are closing by the thousands across North America. Last year, 6,800 retail chain stores closed in the U.S. alone.
The Four Horsemen of the Retail Apocalypse are debt, supply, loyalty and sea change. Many retailing giants are saddled with debts that total into the billions sector-wide — a burden even competitive chains find hard to sustain. Supply problems leading to product shortages or delays compound the problem, especially in an era where consumers expect near-instant delivery of inventory. That tests consumer loyalty, which is essential to brand survival.
And the sea change? There's a huge shift in retail sales and marketing as millennials start to flex their fiscal muscle. Now estimated to have the most spending power of any generation, millennials spent $200 billion in the U.S. last year. This generation shops differently from their parents, relying heavily on social media and influencers. A recent U.S. study found that 62 per cent of millennials are more likely to become loyal customers if a brand engages with them on social networks.
"There's a generation gap that's happening right now with millennials — millennial parents shop differently, so if you're not on social media, then you're absolutely missing out."
— Traci Costa, Founder and CEO, Peekaboo Beans Inc.
What's the Solution?
How can your brand avoid being another victim of the retail apocalypse? For Peekaboo Beans Inc. (CSE: BEAN) (OTCQB: PBBSF) Founder and CEO Traci Costa, the answer was child's play — both on the ground and online.
Costa founded Peekaboo Beans in 2006, inspired by the Lululemon example of creating a lifestyle around yoga and rising from a small Vancouver-based company into an international brand. As a new mother, she was frustrated by the shortcomings of fast fashion children's clothing. She was looking for products that were long-lasting and made intentionally to encourage kids to be active. She couldn't find them, so she created her own lifestyle brand apparel.
"The fashion world really looks at children's fashion as a fast fashion consumer-driven space, whereas I looked at how can we create a lifestyle brand apparel product for children that fostered all their developmental needs and reflected the values I wanted as a parent," says Costa.
"I really wanted something that was sustainable, was ethical in its manufacturing, and having some sort of value-based longevity."
Costa saw a gaping hole in the $36 billion U.S. market children's apparel space to exploit. She started out selling her products wholesale, then in 2011 pivoted to a direct sales model. Peekaboo Beans now has over 1,500 sales reps or "stylists" in North America. The company built their brand and avoided the costs and debt that is crippling traditional brick and mortar retailers.
"The way I see it, Uber created distribution through people and now anyone can be a cab driver. Airbnb created distribution for people and now anyone can be a hotel owner. And Peekaboo Beans created distribution for people, now anyone can be a storefront," says Costa.
"We have, for all intents and purposes, 1,500 little storefronts all across North America and we're growing every day."
Taking it to the Next Level
Costa launched a direct sales model that allows stay-at-home or working moms to generate income selling a product that aligns with their own values. Costa describes it as an "old school 1970s direct sales model" with features like in-home parties and play-dates.
As successful as that model's been, Costa is determined to stay on the leading edge of market, technological and demographic change. To keep out in front, Peekaboo Beans recently pivoted the direct sales platform to an omni-channel approach, one that engages sellers through social platforms, including Instagram and Facebook, as well as online retailers to maximize revenue and build brand loyalty.
"We're moving it into a social selling platform where we can leverage technology and grow through an influencer base and blogging — almost like an affiliate model," says Costa.
"This social retailing model is an omni-channel approach where we can leverage ecommerce where people can shop on Amazon or in-person."
Navigating the Millennial Sea Change
The millennial sea change is a big part of the company's new approach.
"There's a generation gap that's happening right now with millennials — millennial parents shop differently, so if you're not on social media, then you're absolutely missing out," says Costa.
"We can reach over a million people just from two Instagram posts from two influencers featuring our product on their feeds. You can't get that kind of exposure from paper print ads unless it's online as well. I think all these different touch points are important."
Caleb Jeffries, Investor Relations Representative at Kin Communications Inc. says there are few companies in the children's apparel space that are taking Peekaboo Beans' approach.
"It's a massive market and there are very few companies doing what Traci’s doing," says Jeffries.
"It's really at the ground level in terms of what this could be. You've got early success. You've got a lot of people that are attached to the brand. It's just building that vehicle for this to expand. I think implementing this new model will be a massive difference maker."
Stylists Get in on the Ground Floor
With rapid expansion opening new opportunities for the company, Peekaboo Beans recently went public on the Canadian Stock Exchange (CSE). Costa gave her stylists a chance to get in early. The results were surprising.
"I said to my reps, 'You guys are on the ground floor, would you be interested in investing if we opened it up?' Why not give more people the opportunity to be able to invest in something that you know has a lot of opportunity?" says Costa.
"The response from our sales reps was staggering and we closed over $700k in about two weeks, which really shows you the level of excitement and interest in supporting the company. The people who are helping build the company fell a sense of ownership as well."
Digital Marketing, New eCommerce Platform Near-Future Focus
Looking ahead, the company will be focused on digital marketing to bring exposure to the brand, build community, relationships, influencers and ambassadors, and create more regional brand recognition. All that will also set the stage for the launch of a new ecommerce platform through Amazon.
"I'm really excited about this because I thrive on marketing the brand and bringing more attention to such an amazing product," says Costa.