Despite Some Reservations, Barneys Is Going All-In on Data

October 25, 2017, 8:38 PM UTC
Courtesy of Barneys New York

It’s hard to change the culture at a 94-year-old retailer, but Barneys New York CEO Daniella Vitale is adamant that the company has to embrace tech even more than it does, and make better use the troves of data it gleans from shoppers.

Barneys gets about 20% of its revenues online thanks to a big push in recent years. But Vitale, who became CEO earlier this year, is adamant the luxury chain needs to do much more, even amid some concerns about what that being even more tech-centric could mean for Barneys’ personality.

“This has probably been the biggest point of tension in the company.” Vitale said at WWD’s Apparel and Retail CEO Summit in New York on Wednesday. She continued that some at the company felt “we would be less creative, or we would be too rigid or we wouldn’t be as experimental as we once were if we became a more data-centric company.”

To that end, Barneys hired a Facebook executive, Martin Gilliard, in April even though he had no retail or e-commerce experience—but did have deep data expertise—to serve as chief information officer. It was Vitale’s first major hire as CEO. As Vitale explained it to Fortune in August, the data is essential to winning over new customers and rewarding customers.

Vitale, a high-ranking Gucci executive before joining Barneys in 2010, wholeheartedly disputes that, saying the data are key to better understanding what customers want. The tension she describes has become endemic in retail as older chains try not to lose the so-called art of retail, where merchants go with their guts and make bets, and the science of predicting what good customers want and in what quantity at a time misfires are costlier than ever. It’s also key to better using tech not only for online shopping but also for in-store service.

One example of a tech breakthrough at the company she points to is a new shopping app developed in-house that looks at a shopper’s purchasing and browsing history and allows a store associate to understand what a customer has purchased and where, and provides product recommendations.

This strengthened focus is all the more essential given how popular stores remain with Barneys shoppers, but also how people begin to browse before heading to a store. Some 55% of Barneys shoppers under 34 shop at a physical store, Vitale pointed out. And about a third of Barneys customers shop in both avenue, meaning that online and stores have to be in lock step.

Vitale says Barneys has to stand out from the pack. Its rivals includs everyone from Net-à-Porter to Nordstrom (JWN), companies that invest heavily in their e-commerce firepower. While the privately held Barneys does not disclose financial results, Vitale conceded that it’s been a “complicated” year for the retailer, as it has been for peers like Neiman Marcus and even Nordstrom’s full-service department stores.

So that means that stasis is not an option. “Of course we’re going to fail a million times over,” she said. Nor is letting different divisions at Barneys operate in silos.

She added: “If you’re creative (team), you’re here. If you’re digital, you’re here. If you’re merchandise, you’re here- we cannot operate like that anymore.”

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