The Sociology of Anthropologie

[00:00:05] Phillip: Welcome to Future Commerce, the podcast at the intersection of culture and commerce. I'm Phillip.

[00:02:02] Alicia: And I'm Alicia.

[00:02:03] Phillip: And today we have a very special guest. One of, I think, my daughter's new favorite brands. Alicia, I think one of your...

[00:02:10] Alicia: Definitely at the top of my list.

[00:02:11] Phillip: One of your favorite brands and a staple, I think, of modern shaping of culture. She is the Chief Operating Officer of Anthropologie Group leading operations, inventory, and finance across North America, Canada and The EU for Anthropologie, AnthroLiving, Terrain, and BHLDN. It's Candan Erenguc. Welcome to Future Commerce.

[00:02:33] Candan: Thank you. Very nice pronunciation.

[00:02:36] Phillip: Oh, well, it's such a pleasure to have you. We talk a lot about how organizations like yours shape culture, but I really do think Anthropologie does shape what people buy. And I think what people buy is who they become. How is Anthropologie shaping the world in 2025? What are you doing these days over Anthropologie?

[00:03:00] Candan: Sure. Well, first of all, I think, before speaking to what we're doing operationally, have to say we have the best merchants. Our merchant teams are so cool. They don't just read and respond to trends, t [00:03:13]hey're ahead of curve predicting them. [00:03:15] And if I may be so bold, they're influencing trends. So talk about cool. I'm over here in operations in awe over how they predict and create cool. So what they've developed the ability to do is curate trends and do so in a way that extends across categories because we are a lifestyle brand and we're in the lamps business and the dresses business and the coffee mugs business. So their ability to take a trending concept like dogs and allowing you as a customer to come to Anthro and get your dog trend fix however you want, like a dog lamp, like the one behind me or wallpaper, socks or earrings or cashmere sweater with dogs on it, however you want to participate in a trend. Our team has the ability to curate it in a really cross category way. And then operationally, what's I would say a differentiator for us is that in a lot of cases, we can take that trend and we can apply it to a core item. Core long life, however you want to refer to it. So you may see a dog print on like a core t shirt silhouette or a core dress silhouette or our dog lamp collection where we've got a doodle, a Chow Chow, a Poodle, whatever you want. And that allows us to kind of scale trends across categories and really scale the speed and the economics around how we deliver those trends as well because we can apply them to core styles using core fabrics, core materials. So while it's all about giving customers what they want so that they can participate in trends the way they want, it allows us to, I'll say, curate quickly and curate in a way that allows participation. Does that make sense?

[00:05:01] Phillip: Oh, yeah. We're also at a time where I've heard from more and more leaders and especially like retail heavy businesses where they're trying to do a lot of social listening to hear what customers are trying to drive social trends.

[00:05:18] Candan: Yeah.

[00:05:19] Phillip: And retailers are trying to respond to what customers want. And I've always thought of a brand like Anthropologie as the cultural tastemaker to tell customers what they should want. It should be in my mind, I think of it as sort of the other way around, that it's the customer doesn't lead the brand as much as maybe the brand leads the culture. And I've always felt that maybe that that's how it should be. It sounds like what we're actually describing, what you're describing is it's actually more symbiotic.

[00:05:53] Candan: It definitely is. I mean, we have a very customer obsessed culture and our goal is to give customers what they want. But I think part of what you're pointing out is that sometimes they don't know yet what they want. And so you introduce them to concepts and then allow them that adoption.

[00:06:09] Alicia: I guess a follow-up question there because Anthropologie is a brand that engages teens. There's this idea of, like, the daughter, the mother, and the grandmother going shopping together and all being able to find something that they love. So how does that play into the model? That's pretty complex, right? Being able to source all of those insights and all of that data to strike that balance of curating to the customer as well as listening to the customer and providing something that they are saying they want. So how does that complexity come into play and ultimately translate down into like the operational side, which is obviously your day to day?

[00:06:53] Candan: Yeah, sure. Well, so we look at selling data, but only looking at selling data is pretty old school, right? So between our physical stores, our DTC environment, external data, we acquire social sentiment and then direct customer feedback. We're a vertical retailer, so we own all those customer interactions. That's really important to us. But we have so much data and it gives us a much more nuanced understanding of what customers want. We're in the business of giving them what we want. So we listen. But again, owning those relationships as a vertical retailer is really key. And then we're able to test and react really quickly when we do see a signal. So we watch searches on our site, of course, as well as in different environments. And we watch what's happening regionally. And we have the ability to get new product to market quickly through a few different supply chain models that we run and in particular online. So we're also able to get product deployed to stores quickly. If we see nuances and regional demand patterns or trends performing in a certain way in certain stores, we can push more of that product or more of that trend into stores. And we also have some cool AI powered tools that help us test new products with customers, and they also help us curate trends to see how customers are responding to them. And our DTC environment is a great environment to test and learn very quickly.

[00:08:21] Alicia: Well, and you also have a lot of incredible experience too, working for brand spanning automotive to fashion, to travel. I would love to hear how your experience with all those different brands in a way almost prepared you for where you're at right now with Anthropologie with such a rich brand, a vertically integrated brand that does have such an incredible speed and response to not just adapting to culture, but shaping culture as well? Maybe share a little bit about your background and how it set the stage for where you are today.

[00:08:55] Candan: Yeah, thanks for asking about that. I'll try not to be long winded here, but I might be like medium winded. Because I've gotten asked about this a lot. People have asked me, how do you go from like cars to stretchy pants? There's so much to be taken if you are an intellectually curious person. So like in automotive, I learned so much. I actually think that the automotive industry is the best environment in which to learn operations, manufacturing, logistics and supply chain. We have these gorgeous, gigantic manufacturing facilities in the US that are so sophisticated. And I don't think that there's a better learning environment than those factories, personally. I'm obviously unbiased, right? But in automotive, I learned how much product complexity drives operating expense. And that was a really important lesson. I learned how important common platforms and materials are. And I learned about design for manufacturing, which is a subject I'm really, really passionate about. And in the travel business, making suitcases, I got to experience the risk associated with having a very niche offering. If you only play in one category, you're really going to falter when customer behavior changes. For example, people travel less. It has an outsized impact on your business. At Lululemon, I experienced the importance of planning into a full price business. I mean, Stuart Hazelton really taught me to resist the temptation of using promotions to drive top line. And all those experiences prepared me really well for Anthro. Right here, we design very collaboratively with our production partners in our factories so that we're creating products that can be made in a very high quality way that aligns with factory capabilities. We have a very diverse offering, so we're able to flex category volumes up and down. When COVID hit, people weren't buying pants. They wanted dressers. We had them. And then when pants came back, we had those. So you're able to play in a way that's countercyclical when you have the diversity of your portfolio. And then we here at Anthro place a lot of importance on running a full price business. We don't rely on promotions to drive demand. We present our customers with unique only at Anthro products. And they know that when we sell out, we sell out, but there's going to be something really great that comes next. But we're not planning and buying into big promotions. And I also had the benefit of being in consulting for ten years, which was so cool because I got exposure to really diverse retail and manufacturing environments like you wouldn't expect. So I'll tell you, there's probably not a lot of cross pollination between say like fashion retail and a company like AutoZone. But I have the unique experience of working with like Phil Danielle and those guys at AutoZone and they run such a cool business. I mean, the number of SKUs that they fit into each store is staggering. And they really taught me the importance of packaging engineering and the true value, not just of each square foot, but each square inch in your store or in a container. And I think we'll bring all those lessons here. It's been really fun for me to kind of see how these things apply in different environments.

[00:12:13] Phillip: As somebody who's also had a background in consulting and agency work, I think that an unrecognized advantage is also having the scope of seeing lots of businesses operate at lots of different scales. And I've seen a lot of folks who've made that switch over to brand side posts. I did the opposite. I was brand side and then I went to the agency side. And I think having the diversity of experience, I think does give you a different perspective. I think it seems to have served you well. What would you say has been in sort of your shift now into Anthropologie and the COO role, looking into this next era, what do you think are some of those strengths that you have built in that toolkit coming into the COO role that you've brought in from that consulting era?

[00:13:10] Candan: I think really understanding how product is made and moved is really important when you play a role in operations. And understanding the importance of factory integration and factory connection, understanding the importance of design for manufacturing and design for transportation. And I actually, I tend to tie operational efficiency and sustainability to each other very closely. I actually think that they're siblings, you know, at least cousins. I mean, when I think through the lens of like operational efficiency, I mean, first of all, there's always a great financial benefit that comes from that. But that financial benefit is almost always also coupled with a sustainability benefit or some sustainability impact. Simple things like looking at how many miles we're moving materials before they become a product or how many miles we're moving a product before it gets to a customer and really looking at it all in almost like an activity based costing approach, but for a value stream.

[00:15:31] Alicia: I found that to be really fascinating because in discussions around fulfillment and time it takes from warehouse, distribution center, store to the customer, it's always about the speed, but I'm noticing that the dialogue or discourse surrounding fulfillment is shifting, evolving a little bit, that there are certain instances where consumers maybe don't need something right away. Maybe they're just preparing for hosting a party and they want some new glassware or new plates, and it doesn't take that long. They don't need it that quickly, so I think understanding all of the intricacies and nuances that go into perfecting that operational strategy is really important. And I think just how diverse your assortment is really lends itself to some of those learnings that I think our listeners could probably benefit from. Because again, that conversation I feel like is really changing.

[00:16:33] Candan: It really is. And I think know, the how... How should I express this? It's like the most important thing... This may sound crazy. I don't think that the most important thing is speed. I think the most important thing is choice.

[00:16:52] Alicia: Exactly.

[00:16:53] Candan: I want what I want when I want it. And I'll give you a great example of that. In the home business with furniture, you order furniture and maybe your house isn't quite ready for it yet. We've probably all experienced that, where you've got something coming and you're like, "Oh my God, I haven't painted this room yet, or "Oh my God, the floors aren't done." The key is being able to give our customers what they want when they want it and giving them almost the option to self-service if they want that option. And so we tend to think about, at least I do, kind of in a matrix structure. Here are the options in terms of what I can have. And then here are the options in terms of my service level or my engagement. Some customers want to be able to make a phone call. Some customers want to be able to go into a store and talk to a stylist. Some customers want to be able to self-service through our website or our app. And I think that the most important thing is that optionality and choice. And I think that's kind of going to be an overarching theme as we look forward into kind of emerging retail trends and what's going to make a company stand out. I think it's being able to offer the options more than being able to offer the edge cases.

[00:18:05] Phillip: We're almost twenty five, thirty years into the ecommerce era. Well, twenty five, maybe twenty five years. Depends on where you kind of start counting it. And I think that in the era of the internet and the sort of the maturity of the customer, we're realizing that the sort of the age of "me" and sort of the lens of "me" has also kind of matured as well. And so this idea of giving people choice, I think people are also becoming sort of skeptical as to, is this a choice that I have? Or is this a choice that I'm being given because it's a good choice for the company? And I think that there is a new culture that's developed, especially through like TikTok explainers about like how the world works and how business works, that people are much more savvy than we give them credit for. And they also are starting to question motives that businesses have around why they're being given the choices that they're being given. I see it happen all the time, especially in TikTok explainifier videos, explainifier culture around consumer choice. And so it really, hearing executives like yourself talk through how you think, I think really is impactful because I do think that we do start to see some dark patterns begin to emerge sometimes, especially with larger, you know, incumbent retailers where that's defaulting to the choice that's best for the company and best for the bottom line of the company, which is always a good thing, I'm sure for them, but not always best for putting the customer and their desires and their needs first.

[00:19:43] Candan: You'll hear some of my colleagues and me speak about connection over conversion. And that's like, we mean that and we mean that in all of our channels. Obviously it's most visible in our stores.

[00:20:01] Phillip: That's really good. Say that again.

[00:20:03] Candan: Connection over conversion. And that's actually, I'll tell you, that's a Mindy Massey quote. So I want to make sure I give her that credit. But connection over conversion. If you build the connection, everything else will come. And so, we've been asked about our store expansion strategies, for example, that connection is so important and giving our customers the opportunity to connect in whatever channel environment they want is really important. And because we've been able to successfully create those connections, that's a big part of what's opening up the opportunity for us to build and open more stores. But I think to your point, there is a natural suspicion, I think, that's emerging more and more when it comes to how consumers think about companies and enterprises in general. But when you have that connection with the customer, trust comes out of that.

[00:21:07] Phillip: Alicia, I think we have talked a lot in our editorial content and definitely here on our YouTube or on the podcast recently about like the trade off between being data driven and having like operational data to use like predictive trends, trend modeling versus instinctive data, instinctive decision making. And then using that maybe to respond to things like cultural moments or becoming very reactive to things in culture. Sometimes that's just like social trends and demand patterns. I'm curious how you respond at Anthropologie to those? Is there how data driven versus instinct driven or how much operational data do you use to predict and respond to cultural moments there internally? And is that something that you operationalize?

[00:22:06] Candan: We have a ton of data. We use a lot of data. But I think when it comes to cultural moments or viral moments, I believe your data messages signals to you too late. And if you've got your finger on the pulse, you're going to see that stuff before your data communicates it to you. At least that's been my experience. So having a really strong, again, merchant team, having a really strong marketing team and then tremendous analytical teams and like planning and allocation behind the scenes is really helpful. But when it comes to like trends and virality and cultural moments, you feel that stuff before you read it in your data. And so again, it's like we've got the data. We've all got access to tons and tons of data, I think, in retail, especially when you're vertical, where you're a very data rich environment when you interact directly with your customers. But I think when stuff is emerging, if to you want to be at the front end of it, data kind of tells you too late.

[00:23:34] Phillip: Are there certain signals that matter more than others? I know there's always traditional metrics, but are there things that you look for that of stand out to you?

[00:23:43] Candan: I think the signals that are the most important to me are what we're hearing from customers, what they tell us. We're here. Our whole reason for being is to provide them with what they want. And so we listen to them and they tell us what they want. And when I say they tell us what they want, I don't mean in like, yeah, there's fancy data ways that we can see what they want. But they just tell us. We have a very communicative, very passionate customer base. We refer to our most dedicated customers as Anthropologists, and they are very, very happy to tell us what they want and we listen. So that's really important at the store level through a number of channels, whether it's on social, whether it's just them sending us notes. We listen, we give them what they want. I don't think that there's any data more valuable than just what your customers are telling you, but it is hard to codify sometimes.

[00:27:44] Alicia: Yeah. And like you've mentioned, the store is really foundational to the Anthro brand experience.

[00:27:51] Candan: Yes.

[00:27:51] Alicia: I know I personally love going to your stores because it is such an eclectic curation of items. And sometimes I'm in like the dress section and then I'll see like a little stemware or new mug and I'm like, "Oh, I want this." It's like a nice little treat as I go through the experience.

[00:28:14] Candan: An adventure. Right?

[00:28:14] Alicia: Yes. Exactly. And it's like that perfect combination of modern trending styles across categories, but there's also that crafty, eclectic quirkiness that perfectly encapsulates the brand. But before I go too deep into my tangent, because expansion is top of mind for the brand right now, I'm curious how that plays into your role and how you're maintaining that operational effectiveness and efficiency and soundness as the brand grows and as you add more assortment. Because I can imagine it's a very tricky balance of growing, but also keeping the essence of the Anthro store experience intact and really keeping all of those elements that I'm sure not only I love, but so many customers love.

[00:29:11] Candan: Yeah. Well, thanks for asking about that. So we're expanding our physical footprint and we're doing that at a time when a lot of retailers are maybe consolidating...

[00:29:23] Alicia: Rethinking. Yeah.

[00:29:27] Candan: We're doing it in a way that we're seeing a lot of success with and that we're really proud of. So the key there is that we don't believe in a one size fits all model. So I'll give you an example. We just opened a store last month, so in June, in The Gulch in Nashville. I don't know if you're familiar with that part of Nashville. It's around the corner from Broadway. But our Gulch store is smaller than the average Anthropologie, but it serves a really specific purpose. So we designed it intentionally and we picked the spot knowing that this was how we were going to design it for the market that it's in. So The Gulch is Nashville's most touristic area. You know, Nashville sees about 17,000,000 tourists a year, and it is the number one destination in the country for bachelorette weekends. And just about every bachelorette party that comes to Nashville is going to walk past our new store in The Gulch at some point. And those are our customers. So we want to be there for them with the stuff that they're going to be looking for when they're on that weekend in Nashville. So we opened that store. We've got about 3,500 selling square feet there. And it's merchandised really specifically with accessories, dresses, denim, cool tops. We don't have much of a home category presence in that store. Putting couches in our Gulch store just wouldn't make sense. That's not the headspace customers are in. That's not what they need when they're there. And you kind of contrast that with like our Green Hills store, which is South of Downtown Nashville, where we've got twice the selling square footage. And we have an assortment that's tuned for our local Nashville customer who's shopping for all the occasions in their lives and shopping for their homes. So the reason that I bring up that Nashville example is because it highlights how we're growing our fleet and some unique capabilities that we have around assorting and allocating our stores really at the neighborhood level. So we have a sizable specialized allocation team and really great tools that we use to plan store by store to service customer preferences in a very specific way. And our customers really value that differentiation. You go to two different Anthro stores, even if they're in the same region, they're not going to have the same assortment. And because each store serves a really specific purpose in the market it's in, we're opening more of them and we're varying their sizes based on how we're going to assort them and using every square foot that we've got in there productively. That being said, our physical spaces are extensions of our brand storytelling. So we are continuing to invest in, and we will always invest in that visual experience. And we're investing in those services. So we have styling services and concierge shopping. And that's all backed up with very smart, very efficient operations. And then our stores also work hand in hand with our digital business. So like I'll give you an example of a metric. More than half, a lot more than half of our DTC returns are brought into stores. And we love that. That gives us another customer touch point, another opportunity to serve, another opportunity to connect, and potentially another opportunity to convert a customer onto something special that they're looking for. Stores go hand in hand with DTC, as I'm sure you know. But because we're planning and allocating them so specifically, we have the opportunity to open more. And that's what we're doing, and that's what you're going to see here over the next couple of years.

[00:33:13] Alicia: I think there are two key areas we'd love to explore before we close things up, Candan, and that's one, what is next for Anthropologie? Obviously, we've spoken quite a bit about in-store and brick and mortar expansion being a really core focus, but at a strategic level, possibly putting your consulting cap on so to speak based on your background and experience, just seeing how retail is evolving and consumer trends, consumer expectations, how is Anthropologie as a brand planning to evolve in line with those expectations plus all of the other external factors at play in this current climate?

[00:33:58] Candan: Yeah, sure. Well, so in terms of what's next for Anthropologie, I'll tell you, I don't decided that, we don't decide that. Our customer decides what's next for Anthropologie. Now that being said, our customers really love our own brands. So Maeve, Celandine, Daily Practice, Pilcro, our denim brand, Lyrebird, our customers love those brands. So we're growing them and extending them into more categories because that's what our customers want. And again, being vertically integrated the way we are with an amazing design team, tremendous factory relationships and production capabilities, we're able to create really great product and present it to them. That's what they're telling us they love. And so definitely growing those own brands is part of what's next for us. But our customers are really dynamic, and they love fashion, and their preferences change with the added benefit of the fact that as they seek out more of our own brands, that gives us an opportunity to show off and benefit from our supply chain capabilities, so our speed and our uniqueness. And as I think about emerging trends in retail or the next decade in retail, I think that the operational capabilities that are going to differentiate brands are going to be the ones that allow customers choice and differentiation, not just speed. Speed's still going to be important, but choice and differentiation. Customers want to choose how, when and where they engage. And retailers that have the infrastructure to support diverse omnichannel experiences are going to stand out. I also think looking forward, service is a luxury. So offering services and personalized experiences will be a differentiator. And I hope that you all have experienced the service differentiation in our stores. And then finally, most important thing is knowing your customer and using the wealth of primary and secondary data and feedback that we have available to know your customer and to give them what they want. And I think retailers that continue to do that are going to stand out. And that's certainly what we're positioning ourselves to do.

[00:36:14] Alicia: Now I wanna go to Anthropologie. See you later. {laughter}

[00:36:17] Candan: Please do. I'll go with you. Let's go together.

[00:36:20] Alicia: I'm coming to Philly.

[00:36:22] Phillip: I'm gonna bring Camille. She'll love it. I love having you. Thank you so much. It's been a pleasure. Thank you so much for coming, and thank you all for listening to this episode of Future Commerce. Find more episodes of this podcast and all Future Commerce properties at futurecommerce.com. Subscribe and listen both on YouTube and Spotify, And you can always find more of everything that we're doing by subscribing to our newsletter, The Senses at futurecommerce.com/subscribe. Remember, culture is commerce, because what you buy is who you become. We'll see you next time.

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