Kate Spade may be best known for its handbags, but the retailer’s ambitions extend far beyond the typical arm candy. This year alone, the brand has launched home decor, a new line of casual clothing, audio products like speakers and headphones, and a futuristic version of its flagship product: handbags with built-in technology capable of charging cell phones on the go.
Whether any of the retailer’s latest experiments will have the staying power of its iconic purses remains to be seen. After all, not every expansion has paid off—Kate Spade discontinued its lower-priced Kate Spade Saturday brand earlier this year.
Mary Beech, CMO of Kate Spade, sat down with Fortune to talk about the company’s plans for the 2015 holiday season, the reason it tapped women like Gloria Steinem and Iris Apfel for its latest ad campaign, and the lessons she brought to Kate Spade from Pixar, her previous employer.
The following conversation has been edited and condensed for clarity.
What role does marketing—and you, as CMO—play at Kate Spade?
Marketing is in many ways the special sauce in what we do. Brand storytelling is something we do better than most out there. We have an incredibly clear idea of the Kate Spade New York girl and who she is. Our brand promise is that we inspire you to lead a more interesting life. It’s a very democratic promise: I’ve had an opportunity to speak to customers whose interesting lives include doing roller derby on the weekend, women whose interesting lives are cabaret singing or having six children.
What’s the culture like at the company?
Scrappiness is a core value and passion is a key word. We’re very direct and honest. We say what we mean and we want everyone who works with us to do the same. Great ideas can come from any level. I had the opportunity to work for six years at Pixar. There, the concept’s all about “plusing.” All the directors have to put their films up six times before the entire community. Each time they do that, the entire community has a chance to tell the director what they think of the film. And it’s the concept of plusing—not criticizing, but helping to contribute and make it better. It’s the freedom for everyone at the organization to feel like they can plus an idea—merged with your ability as a leader to edit those pluses.
Here at Kate Spade we work very collaboratively. For us, plusing means, how can we make this a little bit better? We have to balance our aesthetic side and the commerce side and i think the plusing allows both of those things to be a little bit better.
What’s Kate Spade’s focus for the 2015 holiday season? Are you expecting a big year?
Our holiday campaign is all around “Get gifted” and the ability to personalize a gift. Being a lifestyle brand with everything from tumblers to beautiful sweaters allows us to be a great gifting resource. And we have a wonderful holiday [ad] campaign. When we released our latest “Missadventure film” [Kate Spade’s video ads, which star Anna Kendrick] in early November, it received 7.4 million views in just three days.
In terms of products, obviously we’re particularly excited about our Cedar Street and Cameron Street handbags and our new collaboration with Everpurse. We’re also very excited about expanding into audio. We have Kate Spade bluetooth speakers and ear buds exclusively at Best Buy.
Tell me more about your collaboration with Everpurse. How does that fit into the bigger picture for Kate Spade?
Our customer loves tech, she’s on the go. The Everpurse collaboration is a line of handbags and a pouch that are capable of portable charging. You literally set the handbag on the disk, the handbag itself charges, you don’t have to plug it in, and then you slide you phone into the docking station and you can go around all day and you don’t have to worry about losing power. Everpurse was great to work with because they respected our design. It’s a Kate Spade handbag with technology as an additive ingredient, not a technology-led bag that looked like technology.
In October, you launched home decor. How does that play into the brand’s overall strategy?
Our two axes of growth are geographical expansion and category expansion. A lot of that product category expansion has come from licensing. We have Women’s and Men’s, and Children’s launched this February. About a third of the customers who are purchasing Children’s from us are first-time Kate Spade customers, so that’s great. Now, we’ve launched nine new categories of home decor.
From the day it was conceived, Kate and Andy [Spade] saw it as a lifestyle brand. Very early on they signed a license for tabletop, for footwear, for stationery. Our brand storytelling that makes sense in multiple categories. We have everything from $8 paperclips to $8,000 couches, it’s a broad swath of price points.
Are there more areas you’d still like to conquer?
We still see lots of opportunity. Within women’s last year we launched swimwear, we licensed watches with Fossil, we announced atheleisure recently with Beyond Yoga and we have sleepwear coming next year. And we see several additional categories we’d like to get into in the near future.
You ended up discontinuing Kate Spade Saturday, your lower price line, earlier this year. What lessons did you take from that closure?
We want to experiment—to fail fast and see what we can learn. The discussion around discontinuing the brand was about focusing on Kate Spade New York, to streamline. We did learn that there’s absolutely appetite within the Kate Spade brand for an accessible price point, we know our core handbags and ready-to-wear are an investment. We’ve launched Broome Street, a label within Kate Spade, to be a more casual expression of the brand. It’s what you’d wear on the weekend.
Selling a brand across such a wide range of price points can’t be easy. What’s your strategy?
We view our customers as a mindset rather than a demographic. We have customers who are 14 and customers who are 70. They are very happy to stand out in the crowd, they have a confidence that allows them to enter the world boldly. That allows us to have price points and design for a broad swath of women.
Regardless of the price point you’re purchasing at you have something that’s clearly Kate Spade New York. That was part of the casting [of our ad campaigns] to make sure we had this broad swath of women. We have college students, we have 8-year-old twins and then we have Iris Apfel and Gloria Steinem. Our brand promise is all about empowering women and it’s something that comes out in our campaigns.
I understand you’ve been re-thinking your in-store experience. What key things have you changed?
We looked at every aspect of the store design as well as the selling ceremony. We ended up renaming our associates “muses,” but that really links back to their role in-store, which is not a transactional role any longer. It’s a relationship role that empowers them to use the skills that they have. When a customer walks in the door, we tell our associates, “read the customer, not the script.” If the customer chooses to transact, it will be a good transaction, but if they don’t, it can still be a great customer service experience.
We put a number of different tools in the store that allow you to have a better experience. One example is our Pack-A-Purse station. Seventy percent of our business is still handbags. One of the most important things is what’s going to fit in a new handbag, and most women are not so eager to dump out their handbag to try it in this new bag. We created this group of resin items, including an umbrella, an ipad, headphones… As a woman is looking at a bag, she’s really able to try the items. That interaction isn’t happening through a device, it’s happening right there from the store.
[In the dressing rooms], we added a “selfie shade.” We find our customers are often taking selfies so she can pull down a backdrop of vintage New York City or one that has a “like” bubble. It’s just small touches like that.
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