JIM MURRAY ON BUILDING A TRIBE OF LOYAL CUSTOMERS

Among the best parts of the Project/MRket shows in New York and Vegas: learning from successful retailers and brands. At this summer’s NY show, I had the pleasure of interviewing the always-candid Jim Murray, president of Michigan-based specialty store A.K. Rikk’s. He did not disappoint, as the standing-room-only crowd can testify. Here: some excerpts from our discussion.

(My other informative interview from the show was with Bloomingdale’s men’s fashion director Justin Berkowitz.)

Q: How did you end up in retailing?

A: As a kid, I spent a lot of time shopping with my mother, who bought only on-sale. I knew there had to be a better way so I pursued a career in retailing. In 1987, Rick Gaby couldn’t find a decent suit in all of Grand Rapids to wear for job interviews so he created A.K. Rikk’s—a luxury shop focused on customer service. (He even got a van to deliver clothes to people’s homes.) A.K. Rikk’s is now a 28,000 square-foot men’s and women’s luxury emporium with 2,500 square feet of dedicated event space. I’ve been there since 2006.

Q: How’s business?

A: The market is in absolute flux with many aspects changing. People are busy and have less time to visit stores. Consequently, we needed to narrow our focus, target our audience more specifically and merchandise with true empathy. The more narrowly we define who we are, the easier it is for clients to identify with us. And this strategy is working. Being all things to all no longer works.

Q: Is that why you dropped streetwear?

A: Streetwear threw us for a loop; I wish a had a take-back here. Denim is and has always been part of our DNA but the advanced contemporary looks we introduced were not right for our customers, nor for their kids. In retrospect, I should have done streetwear with my regular brand partners. Zegna continues to do a great job incorporating streetwear influences into their collections. But I followed my instincts instead of listening to my core customers, who are in their 50s and have no interested in exaggerated streetwear styles. It just didn’t work.

Q: I understand you have some kind of club for these core customers.

A: Yes, it’s for guys who love nice clothing, who spend a lot on it, who buy a suit or sportcoat every six months. We arrange dinners for this select group, we fly them into NYC to visit showrooms; they’re delighted to be part of something that reflects their passion for fine clothing.

Q: So, your suit business is holding up?

A: Yes, we’ve maintained volume in suits, although it’s never been a huge percent to total. Sportcoats are key. For spring: cotton/linen casual looks to wear with jeans. But formal is also important: we sell dinner jackets at all prices. However, I do believe that the next generation will wear more suits because their fathers don’t…

Q: If you’re selling sportscoats rather than more expensive suits, how do you maintain volume?

A: It’s all about storytelling. Nobody needs more clothing. It’s about creating some romance around the clothing so that customers feel part of something special, whether its sustainability, craftsmanship, a longstanding family tradition or a specific town in Italy. It’s not about setting up a table with 20 pairs of jeans. It’s about showing what to wear with the jeans, how to wear it, what to eat and drink when wearing it. It’s about storytelling, fantasy, making it sexy.

Q: It that why you do so many events?

A: Yes. We do at least one major event every month: you need to give people a reason to come in. And it’s not always a clothing focus: we just had a book signing (with cocktails of course) and had 300 people in line waiting to get in… Whatever the event costs, the ROI is priceless. To increase traffic these days, stores must create and market interesting events.

Q: You do a lot of your volume with a few core brands: Is this a wise strategy?

A: We’re always looking for new brands to develop but I strongly believe in partnerships, in putting a lot of eggs in fewer baskets. Otherwise, there’s no real relationship.

Q: How much of your business is from outside Grand Rapids?

A: Six of our top 50 customers are from other cities. Your clientele today has little to do with geography: with the internet and social media, people will find you.

Q: How is your online business?

A: It’s increasingly important: we’ve found that many of our local customers pre-shop online so our site should look and feel like our store. We’re investing in it: we promoted a director, four stylists, a manager, several marketing positions. The website generates five to 10 percent of our business today but should be 20 percent by year-end and ultimately 50 percent.

Q: That’s a huge projected increase online, especially considering the cost to you of free shipping and returns.

A: We make sure every purchase is styled and followed up by one of our associates. We aim to be the leading company in the U.S. for styling people: if you want to create a self-brand, one of our sales associates will be on a plane tomorrow. Another secret that I probably shouldn’t share: every purchase made in our store or online has to be followed up by an email or text within 45 minutes. The time frame is critical and it works: in any 12-month period, 48.9 percent of my sales are repeat transactions whereas the industry average is 20 percent.

Q: How do you attract the right kind of young sales associates?

A: We make them brand ambassadors; we empower them. Young people today don’t work for money; they work for purpose. It’s a generation that longs to be part of something meaningful. Make sure your store has a mission statement that’s meaningful. Your business has to be going somewhere or the good ones will quit in two to three weeks.

Q: Finally, how do you deal with the fact that customers can easily find online cheaper versions of what you sell?

A: It’s tough but I try to ignore it. Some of our brands even promote special online markdown days and of course, we’ve lost sales. But if a customer has a problem with our pricing model, I try to explain our mission, that we’re not here to sell 10,000 shirts but rather fewer of just the right shirts. We buy what we believe in at a price we believe in, which allows us to support the community.

I’ve learned that life is about reciprocity: do something nice for your clients and they’ll forgive a 10-20 percent price differential. Okay, they might not forgive a 50 percent differential, so if a brand is killing you, you might have to replace it.