418. How Hanna Andersson built a brand families trust

Speaker A: We launched Hannah Me Downs to be able to allow our customers to resell Hannah. So we did this for our loyal customers to recoup the value of Hannah's because we are a premium brand and we take that seriously. And so we wanted them to be able to recoup the value after their children had outgrown it. But 40% of the customers are actually brand new to Hannah. So it has become a way for new customers to become introduced to the company as well. And what we see is the resellers, about 80 take a gift card instead of cash and they'll buy twice as much as the gift card value on our site. We didn't expect that either. It has been a real boon for us as a business precisely because we put the customer at the center of, um, this idea. So what's good for the customer is generally good for business. And this is proved true for that.

Speaker B: Welcome to Retail Gets Real, where we hear from retail's most fascinating leaders about the industry that impacts everyone, everywhere, every day. I'm Bill Thorne from the National Retail Federation and on today's episode, we're talking to Ame Lapic, chief executive officer at Hannah Andersen. We'll discuss the growth of Hannah Anderson, the world of children's clothing, and how it's evolving. Amay, welcome to Retail Gets Real.

Speaker A: Thank you so much, Bill. I'm very excited to be here and

Speaker B: I'm so glad that you are here. I want to know a little bit about your journey. We've established you're from Louisiana, a great, great state estate, great people, great food, and you've had a great career. Tell us about that journey and how you came into the role that you currently play as the CEO.

Speaker A: So I've always been an avid consumer. I just want to say that when you talk about retail is everywhere and it affects everyone, you are 100% right. I've always been an avid consumer, but I started my career at a strategy consulting firm called McKinsey Co. And I actually worked in the retail and marketing practice. So that was my first foray into retail and from a strategic point of view, working for a big cosmetics company and another large shipping company and a travel agency back when there were lots of travel agencies. And then I moved to the Bay Area and started working for a couple of different Internet startups in E commerce specifically. And all of that was fascinating. What I loved the most about it, what I love the most about e commerce in general is real time reactions from customers and that you can see one on one in a Store environment, you really get to see it at a business level with E commerce. So I made my way to the Gap, uh, and I spent about 14 years at the Gap, uh, working. It was amazing. I love the Gap.

Speaker B: Great brand, great company.

Speaker A: I have only positive things to say about it. Um, I learned a lot about how to build a strong brand, how to run stores, how to run E commerce. My last role at the Gap, I was the global marketing officer for Banana Republic and I also was the head of the bananarepublic.com so the e commerce business for Banana, um, and it was fascinating. And again what I love about E commerce is you get real time reaction by customers and I like to say you get to surprise and delight them every day. And I really believe that. Yeah, from the Gap, I went to Pandora Digital Radio and I ran the, I was the global cmo, the marketing officer and then head of the uh, subscription business for Pandora when it was just starting. And now it's become, it became the profit lifeblood really quickly and it, and it grew really fast. And then I went to GoPro actually and was the head of marketing at GoPro and the head of the E commerce business and subscription business for GoPro for a little bit before I came to Hannah. And honestly the through line is this idea of focusing on the customer and focusing on how do you think about how to surprise and delight them or wow them, et cetera. And how do you learn fast and that it felt like every day I was going back to school as I look at the results from the day before, results by the hour and kind of who's buying what, where and when.

Speaker B: Right, right, right, right.

Speaker A: I love, I love that aspect of my role today and all of those roles as well. And that's what's kept me just a voracious, uh, retail person basically.

Speaker B: Well, I think you know the breadth and depth of what you've done and I mean you've done retail, you've done store retail, you've done online, you've done other products that basically you can tie into any experience you're going to have with retail. And I think that that's fantastic. The Pandora story is great. I remember when that first started, I mean, and you were a part of that. That's really fantastic. So in all of those experiences, I mean what really shaped your path into this leadership role? I mean, uh, you've been doing leadership obviously, but this particular role, what shaped that path?

Speaker A: I mean I think of myself as a leader, but I think of myself almost as a team. Player who likes to gather the team around them. So what has really shaped me is I love to work in teams. So, uh, you know, from when I was a kid playing sports or actually doing the debate circuit with the team dynamic in high school and college, I love being on a team and I love like having one goal that we're all rallied around. And so as I think about the throughput, I started managing people really early in my career and we came together and we started, we had one goal. We always put the customer at the center of everything we do. That's been my mantra, customer experience. How do you think about the customer first? Because I believe if everyone's focused on what will work for the customer, they are inevitably driving the business as well. And I just, I think that focus on team, the focus on clear goals, the focus on, on being very specific with what we are all focused on and working towards has really helped me be a better leader. And then I believe in very serious communication, uh, because so much can be lost without the context of why you're doing what you're doing. And so I, I tend to over communicate, I tend to give the context, I tend to follow up with people. All of that's really important to me as a leader. I've learned a lot from phenomenal leaders. I've learned a lot from not so phenomenal leaders. And I think both are good. Honestly, you got to learn across the board. And I don't. It's not that I'm just one of the team, but I definitely feel like I'm part of a team. And the minute I don't feel like I'm part of the team, it's no longer the right position or right role for me.

Speaker B: Yeah, I would think that, you know, given your background, experience, I think you would be a phenomenal person to be leading a team because you're not only leading, you're teaching as you go. I mean, you've had some great life experiences, some great personal and professional experiences, and I could see how that could help a team really kind of rally around because they want to learn from you.

Speaker A: I feel very lucky about that, honestly. Uh, I. One of the things I learned very early on is be yourself. And I have to say that I was always told to be a leader. You can't really show people who you really are. To the extent that in my first pregnancy I hid the fact that I was pregnant for like six months, I was literally afraid I was going to get fired or passed over for a promotion, it was terrible. Uh, uh, I Was told when I was looking at taking this role, you can do that, but you can no longer say the word y'.

Speaker B: All.

Speaker A: You can't actually be Southern anymore. You have to show up very differently if you're going to be the CEO. And I have routinely rejected that because I. People work for people. We all work for people. And so if I'm being fake, my teams can't be real with me. And so I think being your authentic self and not a mean authentic self, I don't believe just authenticity for the sake of authenticity, but just truly showing up, being respectful, respecting others, and being true to who you really are goes a long way with the team.

Speaker B: It's so funny that you tell it. You can't say y'.

Speaker A: All.

Speaker B: I remember taking a job once, and I was referring to somebody in the office as ma'. Am. I'd be like, yes, ma'. Am. And then this was a person in authority. And so that's just a, uh, natural. And she was very, she was very offended by that. She said, I would, I'd like to ask you to please stop calling me ma'.

Speaker A: Am.

Speaker B: And I said, well, here's the problem. That's like asking me not to blink. I mean, I, I, I just happens, and I can't stop it from happening. And so I would always have to be like, yes, ma'. Am. Sure, I'll do that. But it was, you know, uh, it, it's when you ask people to do things like that, basically you, you change the relationship. And I think that's really important, as you said, to let people be their overused phrase. But authentic selves.

Speaker A: Yeah.

Speaker B: And when you try to stifle that, you're not getting the product that you thought you had.

Speaker A: No, you're really not. And you're encouraging other people to not be themselves. And with that, it means lack of transparency, lack of communication. I mean, uh, the team dynamics just fall apart 100%.

Speaker B: Hannah Anderson. So great brand. We talked about before we started recording that we have an intern whose sister and she were clothed in Hannah Anderson. She's very excited that she's being able to listen in on this program. And, and then I got an email from another colleague who said that they are excited that we're doing, uh, Hannah Andersen today and that I should tell you that they have clothed all their children in Hannah Anderson. And it's a big thing in their community to hand them over when the kids have grown out of them. And so you have a brand that people love, they trust. How do you build and maintain that with today's families, I mean, especially in a. It's a very personal category like children's apparel. I mean, how do you do that?

Speaker A: Thank you for telling me those stories. Number one, as I mentioned before, it is all about our customers. And so hearing stories about loyal customers and people who have grown up wearing Hannah just literally warms my heart. So we take it very seriously. Our purpose, our mission is to champion childhood. And in that, we don't take that lightly. What that means to us is we put the child at the center of everything we do. So we make clothes that are joyful. So you'll see bold, bright colors and patterns from Hannah Anderson. Because we are about celebrating childhood, we make everything really easily dressable for children to be able to be empowered and dress themselves. So we use zippers instead of sn, we have really easy to put on clothes, et cetera. Everything is made with this idea of quality and durability. When you talk about hand handed down, our resale marketplace is called Hannah Me Downs because everything in our line is made to be handed down, child to child, generation to generation. And everything we do, we put every single piece that's in our line through a 60 plus wash test to ensure that it will be durable, that the colors won't fade, that it'll be just as soft on, um, after 60 washes as it is on the first wash. Even our tool dresses are machine washable. So everything, every design, every manufacturer, each thing is made purposefully to be able to last for generations. And we do that, frankly, because we are so proud. Many of us are working moms. We are a, ah, a company really run by working moms. So a lot of our team is really thinking about it from the point of view of what mom most needs now, um, and what today's children need. And that helps us champion childhood. We are all about prolonging the precious moments of childhood and allowing children to be truly themselves and then therefore allowing mom to really revel in childhood as long as she possibly can, because that's the joy and wonder of childhood is, is a gift. And how do we just allow that to continue for as many people as possible as we take that very seriously.

Speaker B: Celebrate childhood. That's awesome. You know, in the Hannah Me Down Marketplace, uh, is that pretty new or how have you seen success there?

Speaker A: Absolutely. So I've been the CEO of Hannah for four years, and we launched Hannah Me Downs in early 2023. So it's relatively new. It's about three years old. It's been a, uh, big Success for us. And we did it with the intention of. To be honest, when I joined Hannah, I was blown away by all the stories of customers who had been coming to us for years, of grandmothers who are now buying for their grandchildren, who, uh, had once outfitted their children, of the Christmas cards we have received or holiday cards we have received over the many years of just whole families dressed in Hannah. And there definitely seemed to be a real kind of need and a desire to be able to give back by our custom, by our company to these very loyal customers. And so we launched Hannah Me Downs to be able to allow our customers to resell Hannah, we call them Hannah's, but product from Hannah, um, to the next generation or the next people, et cetera. And we did that. And it's been very successful. It has grown significantly. So even last year alone, we had over 100,000 new listings. Just in the last year, the number of unique buyers has grown 20% year over year. A fun fact is there are items that sold as fast as in 72 seconds from when they were first listed on the site.

Speaker B: Yes, that's impressive.

Speaker A: And what, what was an added benefit? So we did this for our loyal customers to recoup the value of Hannah's because we are a premium brand and we take that seriously. And so we wanted them to be able to recoup the value after their children had outgrown it. But 40% of the customers are actually brand new to Hannah, So it has become a way for new customers to become introduced to the company as well. And what we see is the resellers. About 80% of them will take a gift card instead of cash, and they'll buy twice as much as the gift card value on our site. We didn't expect that either. It has been a real boon for us as a business precisely because we put the customer at the center of this idea. So what's good for the customer is generally good for business. And this is, uh, proved true for that.

Speaker B: Well, I think also, I mean, it's, you know, it speaks to sustainability. I mean, uh, what, what is your broader sustainability strategy?

Speaker A: Hannah was sustainable before it was in vogue. So our, our Hannah jams, our signature pajamas are made from organic cotton. And they have been for years. For years and years. And the other fabric that we've re entered, uh, that we've introduced over the last two years is called Hannah Soft. And that's also made sustainably with Tencel Lyocell. It's not bamboo, because bamboo is actually not good for the environment. So we created our own fabric that is sustainably made and we take the fabrics very seriously. We take the way things are made very seriously. Our company and the products are all got certified, et cetera. So we take sustainability very seriously in terms of who we are as a company. The Hannah Me Downs website has proved this circularity idea of like, what's good for business is good for the environment as well. So mom can buy less items for her closet because she can rebuy. But also our items are just durable. You don't need to replace them as fast as you do other brands cloth. And so that's part of our strategy around sustainability as well. The way I think about it is we are championing childhood not just for this generation of children, but for generations to come as well.

Speaker B: That's a great message too. I mean it is amazing to me that you all have been doing this for a while. You've had this commitment to sustainability. The, uh, resale market is really just beginning to catch on, I think. I mean, I'm hearing more and more about it. But you've been doing it, you've been doing it for years.

Speaker A: We've been doing it for years. And another fun fact is Hannah is the number one resold premium children's brand in the United States. There you go. It's incredible. Like it's really incredible. And it speaks to the quality of the clothing, which is, ah, one of our key signatures.

Speaker B: Yeah, so you've got a work culture and you talked a little bit about it, you indicated that these are, this is a company run by working moms. So let's talk a little bit about buy moms for moms approach. Why is this important to the brand?

Speaker A: Well, if you put the center of everything you do, you're going to create better products and you're going to actually, because I like to think about it, surprise and delight our customers. And so because our company has so many working moms involved at every level of the company, from product idea, generation to design to manufacturing, et cetera, we put uh, a mom's attention to detail in every single thing we do. And that has allowed us to have some breakthrough moments in terms of like new fabrications we want to develop. It's also allowed us to have some breakthrough moments in terms of two years ago we introduced this idea of not just family matching pajamas, but family mix and matching pajamas because mom might want to look a little bit different than her four year old, but still complement each other and be part of the same signature look that came from One of our moms on our design team and our product team as well. So we're constantly tapping into the insights of our moms who run the company, basically to help us come up with new innovative ideas within our product line and also better ways to do it, better designs, better manufacturing tips, etc. And that it allows us again to put the customer at the center of everything we do.

Speaker B: Yeah, well, your key was focusing on moms and not dads. But you hit the nail. You know, moms are detailed, so you're gonna.

Speaker A: Moms are very teacher. We love our dads. We love our dads too. We don't want to exclude them. And we have, we have a fair number of dads also who work at the company. But the product team is working basically.

Speaker B: I understand that you have a remote first model that supports flexibility for the working parents. You know, why is this important to your brand?

Speaker A: I think this is one of those serendipitous positive benefits that came out of COVID and the pandemic for Hannah. So prior to the pandemic, Hannah was a in person working environment. But the company had to adapt like so many other companies had to adapt. And I was hired during 22. So coming out of the pandemic and one of the things that my head of people and I adopted with a strategy of how can we be remote first? How can we really think about a hybrid culture so that it can work not just for a couple of us, but for the entire company? And it's been a game changer for the company. So the way we think about it is if most of your employees are working moms, they need to balance life. I mean, that's part of, part of everything. So we, we have a. Our strategy, our talent strategy, our people strategy is a third of our workforce is located near the Portland area and they tend to be related to our product teams, et cetera. A uh, third of our workforce is located near Louisville, Kentucky, because that's where our distribution center is. And the rest of our workforce is spread across 26 states. And we have certain weeks where we gather in Portland together. We call them purposeful gathering weeks. And they're critical for our strategic planning for our team building. We have one coming up in July that's really important for us to meet with all of our vendors from around the world. And we need to see, look and touch their product. And so that the. Almost the entire kind of remote workforce in the Portland folks are coming together to like have that, have that week together in person. So there are Critical weeks where it makes a lot of sense to be in person. But then there are also other weeks where it's not as critical to be in person, and it allows us to attract talent that we would not have been able to attract before. And it's been amazing. The results are. In our last engagement survey, we found that 88% of our employees feel genuinely supported and flexible. Flexible working arrangements, which is 20 points higher than the, uh, apparel and fashion index in the. In the United states. And over 80% of our employee base would recommend Hannah as a great place to work. So we feel like our recipe is really working in terms of how we think about time together versus how we think about just environments and time apart. People are always working, right in today's culture. Everyone's always on. And so if we can allow people to be, you know, the best at what they do from their home office versus forcing them to commute several hours a day, we feel like we're getting. We're getting a great deal, basically.

Speaker B: That is absolutely fantastic. I mean, and I think that the, uh, uh, results speak for themselves. I cannot believe that Mary just popped on to tell me that I don't have much time left. I could go on for another 45 minutes. This is fascinating.

Speaker A: I mean, you've got Bill, you've got

Speaker B: a fascinating company, and you're doing extraordinary things. Let me just quickly ask you just a few more questions. What if you were to say, this is what makes our brand stand out above all others? What would that be?

Speaker A: Number one is quality. So we. The durability and the quality of our product is cited by 90% of our customers. The number one reason they buy from Hannah. And we stand by it. We guarantee it. We really believe in it. The second thing is, honestly this idea of putting the child at the center of everything we do. So we, we are creating beautiful designs that are joyful and happy that kids love and moms desire, if you will. And the third thing is really, how do we continue to reinvent what mom wants next? And so a great example of that is we sell a lot of girls dresses, as you might imagine, but debts, girl sets literally has taken off over the last year and a half for us. And that's because girls are gravitating more towards sex. They want to be able to mix and match a top and bottom, and they're not as interested in dresses as they get a little bit older. And so how we found that out was from our working moms. And so how do we constantly think about what they need what they want, how to make them happy and joyful while wearing our product, and then the quality and the durability that stands the test of time.

Speaker B: Yeah, I mean, uh, in your particular business, I think that you want to maintain the loyal customer base. You've got to attract new customers. So you've always got to be innovating. But you don't want to take the loyal customer for granted and just think that if you continue, if you evolve, that they're going to continue to want to evolve with you. You have to keep them. We have to keep it as a part of your business. That's, it's got to be a challenge. But obviously you're doing a good job.

Speaker A: Well, two years ago we, we launched the Hannah Rewards program and today we have over 1.3 million members of the program and it represents over 70% of our sales. So those customers come back time and time again and we have so much information and data on them, um, that actually informs the next generation of products for us as well. They tell us what they love and they give us feedback, which has been amazing.

Speaker B: Yeah. And that feedback is so I think for your business in particular, that feedback, uh, consistent, honest, and they're going to be honest with you because it's about their children. I think that is probably critical to your business success.

Speaker A: It really is. Yeah.

Speaker B: So this is a part of the program. I'm just going to ask you a quick question. You just answered with the first thing that pops in your head. It's not hard, I promise. And we'll, uh, we'll wrap it up after about five, I promise. So I'm going to ask you the one, one word, one single word to describe Hannah Anderson.

Speaker A: Hannah is thoughtful. Thoughtful in our designs, thoughtful in how we treat our customers, thoughtful in how we treat our employee base. We're just, we're thoughtful.

Speaker B: Very good. Okay, so you obviously don't have to shop at Hannah Anderson every day. Where do you shop? What is your favorite place to shop?

Speaker A: Okay, that's really tough.

Speaker B: Like as an Academy, Gap, Banana, Republic.

Speaker A: I love the Gap in the Republic. I always will. So, uh, lately my daughter. So I have a 15 year old daughter who is super fun. My daughter and I have been voraciously shopping at Aritzia because we can both find the clothes that we like to wear. And so I would say that has become our number one place to shop. But I, but that's always followed by a good bookstore. I could spend hours shopping for books in a bookstore. I love shopping.

Speaker B: We could talk about that, and it would take about 15 minutes. So is it coffee or tea?

Speaker A: Coffee. Lattes, please.

Speaker B: And what is it that you wanted to be when you were a kid?

Speaker A: I wanted to be an astronaut.

Speaker B: Very good. Well, you're, you're. You're taking off, but you're just taking off in a different way.

Speaker A: In a different way, exactly.

Speaker B: Ama. Uh, it has been a real, real pleasure talking with you, and thank you so much for joining us today on Retail Gets Real.

Speaker A: Thank you. This has been so fun. I really appreciate it.

Speaker B: I've enjoyed it immensely. And thank you all for listening to another episode of Retail Gets Real. You can find more information about this episode at Retail Gets Real dot com. I'm, um, Bill Thorne. The this is Retail Gets Real. Thanks again for listening. We'll see you next time.