As a business leader, it's your responsibility to diagnose problems, analyze threats and quickly correct course in order to protect your brand and maintain profitability. I had the opportunity to sit down with one of today's top business leaders, James Rhee, the CEO of fashion brand Ashley Stewart. We discussed how to grow a profitable e-commerce brand, breathe new life into your company, and re-energize employees.
Here are some of the key takeaways that helped me understand the formula for profitability. Regardless of your industry, these steps can help set you up for success this year.
1. Take the Temperature of Your Corporate Culture
The culture of your brand and the state of your employees, specifically their mindsets, are critical. As a leader, you must be able to recognize when the culture is starting to shift and when employees need to be re-energized with the excitement that once attracted them to the brand in the first place. Capture the values and essence of your brand's DNA and make sure those are reflected in the culture. If your brand stands for fun, it's a value that absolutely must be mirrored by the culture.
2. Make Sure Employees Are Vested in the Success of the Brand
While it may be a natural instinct for a leader to want to keep business challenges or threats close to the chest in an attempt to shield employees from them, the simple answer is don't. As a leader, exercise transparency and lead by example. Your employees are the lifeline of your brand and they absolutely must be vested in any turnaround you're looking to achieve. Bring back the ideals of merit and hard work. An engaged employee that's dedicated to the brand and given the responsibility and power within their respective position to make a difference, is a competitive advantage that not all can claim.
3. Figure What Type of Funding Is Right For You
Venture capitalists are always looking to invest in brands where their dollars can be used to help fuel growth. Use that logic and consider whether outside funding is the best option for the future of your business. Can you use your own capital to fuel the growth by yourself? Chances are that you can. For example, if you're in the e-commerce business, one of the best places to start is your inventory. When it comes to inventory management, try to switch gears and think of your inventory as if it was a host of bonds. In the bond world, high yields and short durations are quite attractive for investors and the same should apply to your inventory. If you're able to maintain high margins and strategically move that inventory fast so that it doesn't sit stagnantly warehoused, that's going to turn into a nice source of cash that you can quickly reinvest in the business.
4. Fight to Keep Brick and Mortar (If Possible)
If your brand is struggling, the idea of keeping a brick and mortar retail presence won't be the easiest to get behind. Brick and mortar retail locations are usually associated with higher overhead costs- one of the main reasons why they're usually first to be jettisoned in any restructuring. Yet despite this, physical retail locations offer brands an attractive margin productivity rate that e-commerce alone cannot match. If you're able to achieve impressive scale and focus on volume to justify lower margins, e-commerce fulfillment on its own is a fine approach.Yet, that's not the case for many startups or up and coming brands. Brick and mortar locations provide an opportunity for brands to effectively deliver the shopping experience they want their brand to be known for. That level of engagement with consumers is invaluable and rather costly to replicate online. Additionally, the margin productivity of stores is often superior. It just requires more capital up front.