· David Senra, Ronnie Fieg
[00:00:00] S0: Okay. [00:00:00] S1: If you have it or if you think about it the other way around, the way you just mentioned, then you're forcing the issue. Because what you're trying to do is you're trying to create a new consumer. And I already had the consumer. So everything that started, when Kith was first built, I was so paranoid about whether or not we'd be able to even break even. And then once we were able to do that, I was so happy. That became just a starting point and the organic base that I had. Growing it from there was just like idea after idea as building blocks. But it wasn't until a lot later that I thought, "Hey, let's do something over here and start building a new consumer." [00:00:00] S0: I'm glad you said that because it ties back to where this tangent we've been going on in the most beautiful way of the conversation is like, "Well, yeah, but I just want to focus on the 10 to 15% that I really love and not this other stuff." And the reason I thought of the ice cream as the reverse is because I just read this very obscure biography of Sam Walton. And people don't understand. Obviously, they understand he built the largest retail empire in the world. But for the first five and a half years of his career, he had one single store in a town of 2,000 people. And he did not have what you had where- [00:00:00] S1: Right [00:00:00] S0: ... like, "I have the people already. How do I continue to serve them?" Which is where you're going to. He's like, "I need to get them in the store." So he put an ice cream cart out front. He'd do popcorn. He would do all this-
· David Senra, Ronnie Fieg
[00:00:00] S0: ... like, "I have the people already. How do I continue to serve them?" Which is where you're going to. He's like, "I need to get them in the store." So he put an ice cream cart out front. He'd do popcorn. He would do all this- [00:00:00] S1: Trying to figure out how to get more people in- [00:00:00] S0: Exactly [00:00:00] S1: ... and attract more people. [00:00:00] S0: Which is why I drew the analogy, and you're like, "No, I already have the people, this core group of really, we're building a really special," almost like, and I mean this in a positive way, it's like this cult-like following. [00:00:00] S1: Yeah. [00:00:00] S0: And then so, okay, that is so special and rare. How do we continue to serve them and extend it, not the other way around? [00:00:00] S1: All of our growth has been based off of that. How do I service my consumer in the best way possible? How do I give them the opportunity to have the best experience? And then from there, we gained more consumers. [00:00:00] S0: And then you knew this because you remember going back to that story about the gray Timberlands, right? [00:00:00] S1: Yeah. [00:00:00] S0: This is pre-internet, right? [00:00:00] S1: Yes. [00:00:00] S0: It's like, if you serve this cult-like following that you have, they will go out and recruit other people on your behalf.
· Ronnie Fieg
[00:00:00] S1: 100%. And when it happens organically in that way, and people then hear it word of mouth rather than seeing it on Instagram and becoming curious off of a photo, the bridge of emotion that people have to the brand, it just becomes a way stronger bridge, right? When they can discover it themselves based off of what people said or when they walk into the space for the first time, people, in their minds, don't necessarily think the space would be as grand as it is when they walk in. So a lot of the times, and through conversations with some of my GMs in the store, people walk in with suitcases per stop from the airport. And they'll walk into the store and just stand there. And he's like, "It happens multiple times a day where I have to like, 'Excuse me, do you need help?'" And they're like, "No, we're just taking it in." Walking into the West Hollywood store today, it's jaw-dropping. It's like every time I walk in there, I'm emotional when I walk in because I can't believe we've gotten to the point where I can build this for the community, for people to come in and have this kind of space. I can build a space where the product sells itself. At this point, the product has such a great following because there's so much value in the product. I don't need to build these amazing spaces at 1,300, 1,400 dollars a foot, which is what luxury brands are spending. But I do that because this is how I give back to the consumer for giving them an experience they could come in and really cherish. And then they make days out of it where families will come to the store and spend time, like real time in the space. And then they'll go to Treats or they'll go to Ronnie's, and they'll really make a day out of it. So I never take people's time for granted. I never take people's spending power for granted. And I always feel like we need to make better product and offer more at the same price point. Those type of philosophies of the end result of what people get and the substance of what they feel is very different from trying to change human behavior in the way that Steve Jobs has done in the past of his creations are to better people's lives, but through the change of human behavior from going from one style of technology to another. This is familiar product where if you're buying clothes, you're buying clothes. We're not inventing something new there.
· Ronnie Fieg, David Senra
But when you buy an item, like the shirt that I'm wearing, for example, and you put it up dollar for dollar against other product in the market, I do believe, and this is touch and feel, if you want to post two pictures next to each other, you could post a Uniqlo T-shirt next to a Kith T-shirt, not know the difference, and argue about the price point. But this is for the people that know. And that Kith is built for the people that know the difference. Know the difference between what? Good product versus great product. And that's really the motto of the brand. [00:00:00] S0: Say more about how you think about pricing, though. [00:00:00] S1: I always feel that people should get more than what they pay for. So where we price product within the marketplace becomes really important, not only to be competitive, because that's not really the challenge for us. It's mostly about, and we don't look elsewhere at price points, even though I study the market just to have the knowledge. But I don't necessarily apply that as to how we price our product. We look at the previous season or the year before to see how product was priced, and we try to better the product sometimes at the same price or by elevating price points a little bit, but getting a lot more for the product. So- It's not necessarily a formula. It's more of like a touch and feel of being in the business for 31 years, and now knowing the difference between good and great. [00:00:00] S0: Have you read this book called "The Luxury Strategy"? It's a red book with white letters. [00:00:00] S1: I haven't.
· Ronnie Fieg, David Senra
[00:00:00] S1: I haven't. [00:00:00] S0: Okay, I'm going to send it to you, because it goes into, I think what you're hitting on is just like, well, there's other people in the industry, and especially the luxury industry, where it's like they know there's a human psychology. Pricing is like a shortcut for us. [00:00:00] S1: Yeah. [00:00:00] S0: We're all busy, and it's just like if you actually increase the price without reinvesting into the product, in some categories, it makes it more desirable. [00:00:00] S1: Right. [00:00:00] S0: And it actually increases the line and the demand for it. [00:00:00] S1: Yeah. [00:00:00] S0: You're saying, "No, no, no. I'm not trying to maximize and do some kind of psychological trick." [00:00:00] S1: That's a bubble. What you just mentioned is- [00:00:00] S0: Well, it's very enduring in human nature, actually. [00:00:00] S1: Yeah. [00:00:00] S0: But my point being is, it's like, but I don't want to just make money for the sake of making more money. If I'm going to charge more, I want them to get more value. Am I understanding what you're saying?
· David Senra, Ronnie Fieg
[00:00:00] S0: But my point being is, it's like, but I don't want to just make money for the sake of making more money. If I'm going to charge more, I want them to get more value. Am I understanding what you're saying? [00:00:00] S1: 100%. And I think the consistency of that thought process that I have has been why we've been able to grow at the rate that we've grown. Right? So, I think that the consumer has seen that year over year, and a lot of these kids that are, I won't even call them kids, these dads that are my age at 44, a lot of them have come up with a brand from when they were 30 or 29. My number one following age range is between 28 and 35, and then number two is 35 to 44. I feel like the growth that people have had for the last 15 years of consistently seeing the progress, they felt like they've been part of the journey, and we've gone so far with creating product that just it's actually mind-blowing when you look at the first collection versus the collection today. We didn't have any fucking clue what we were doing. [00:00:00] S0: You can see this in this book, right? [00:00:00] S1: This book is different because- [00:00:00] S0: It's just the footwear. [00:00:00] S1: ... the footwear is collaborative, and I had 15 years under my belt before working on this product. The first shoe was 15 years later in my career, where apparel, my first product was in 2012. So, when you think about that, that's 14 years ago, and looking at the progress there, there'll be a much bigger delta than in this book. [00:00:00] S0: Would you make another book just on apparel?