The Iconic CEO Erica Berchtold On How She Found Her Voice
The CEO of online retailer The Iconic has found her voice on the issues that matter to her team and her customers.
Current role: CEO, The Iconic
Tenure: Two years, 10 months
Age: 45
Previous roles: Managing director, Sports Division, Super Retail Group; general manager, Crossroads and Autograph, Specialty Fashion Group; general manager, Rebel Sport.
How do you define good leadership?
It’s about being curious more than critical. I think that’s how you learn more and understand what people want or need. And you have to combine that with a good dose of humility and listening. I always say you’ve got two ears and one mouth for a reason – you should listen more than you speak. Any day now I’m going to learn that lesson [laughs].
The pandemic has tested us all. What have you learnt about yourself?
I always knew I was resilient – resilience is like a muscle and if you don’t use it then it doesn’t become strong – but I think I’m more resilient than I realised. I wasn’t rattled by changes in direction and knowing when I needed to listen and when I needed to be brave and just make decisions. Women can sometimes underrate themselves and the pandemic taught me that I’m in the right role and I’m really qualified to do it. I learnt that it was okay to say that.
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The digital transformation we’ve seen over the past two years must have been a huge boon for your business.
A lot of people had to pivot their business or change course but we’ve had a 10-year head start online. COVID-19 was a real accelerator for us. We pulled some timelines forward – the beauty category should have taken us 12 or 18 months to launch but we did it in four – and we’ve launched the home category. The amount of customers tapping into that is unbelievable. I think we can triple the size of our business over the next five or six years with category expansions.
Pre-COVID-19, about 10 per cent of all sales were online. Where’s it at now and where do you expect it to get to?
Online penetration is at about 14 per cent in Australia. That means there are 86 per cent of people who aren’t shopping online and they’re the people I’m more interested in. I believe that pretty much everything you can experience in store, you should be able to experience online. We just have to find those translation points and figure out how to use technology. We’re equal parts a technology company and a retail company – we are using more and more technology to help overcome customer pain points and convert the unconverted.
What’s holding people back? And how do you reach them?
Fit and sizing is a big pain point. We have algorithms that look at everything you’ve purchased before – and everything you’ve returned – so we can recommend a size from that data but in women’s dresses, for example, it’s not always just about whether it fits. Is it going to suit you? So therein lies the opportunity for us to use technology to help predict size as well as how that garment might look on you.
When you joined The Iconic after a career in bricks-and-mortar retail, you were quite daunted by the technology. How did you get past that?
I had to lean into it. Whenever I’m feeling out of my depth, I confront it. Our tech team is trying to solve customer pain points and I’ve had an entire career trying to do that. We were talking the same sort of language; just using different tools.
I had a chat with Ruslan Kogan last year about kogan.com. He describes it as a statistics business masquerading as an ecommerce business. Does that ring true for you as well?
Absolutely. The amount of data that a pure play business has is unbelievable but there’s an art of knowing what data points are going to be important and which ones you should focus on. I’ve seen businesses get crippled by data – they can’t figure out the actionable insights from all that data – so it’s really important to make sure that you have the right people in the business and the right organisational structure.
You’ve said that working for The Iconic hasn’t just made you a better businessperson, it’s made you a better person. What did you mean?
It’s not that I didn’t have principles or morals or a good heart before The Iconic [laughs]. But I’ve worked in businesses where sustainability, for example, felt like something you “needed to do”. It was about keeping up appearances. In our business, it’s fundamentally part of who we are. Our people push me further and give me the confidence to use my voice – and the voice of our organisation – to spread that message further. Before, I probably didn’t feel like I was qualified to take a leadership position on issues but what is that qualification anyway? Just use your voice and get out there and wave that flag. We had our first Reconciliation Action Plan endorsed by Reconciliation Australia. A lot of retailers would say, “Okay, let’s range some Indigenous designers” but we’re looking at how we can make a meaningful difference. Can we create a mentorship program for Indigenous designers where we could give them access to all sorts of inspiring people to help them create their business? Can we give them different payment terms because we know cash flow for a business like that when they’re starting out might be difficult?
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Are you actively hearing from customers that they will choose more sustainable companies, for example?
Yes. We were one of the first retailers in the world to launch the ability to shop via your favourite sustainability attributes. We survey our customers regularly to see what they’re thinking and last year, 20 per cent of them said they would take into account ethical and sustainable qualities when making a purchase. This year, it’s more than 50 per cent. We don’t put sustainability as a separate strategic pillar in our business because that’s kind of putting baby in the corner. It has to be part of everything we do – planet positivity has to be in every strategic pillar.
Is it a conundrum for a fashion business? You have more than 60,000 items on your site and it’s your job to sell as much of that as you can. How do you balance that?
By using data to make better purchasing decisions in the first place. Let’s not buy huge volumes of stuff because that’s what we bought last year; let’s really hone in on how much people are really wanting that at full price at the start of the season. And if I look at where we’re headed for our strategic plan, none of that involves fast fashion. It’s about sustainable goods using sustainable fabrics. I’d rather sell fewer units at a higher price than just feed a fast-fashion space.
Your partnership with AirRobe is significant, too...
I call it the re-economy, which is about re-use and recycle. It’s the fastest growing section of the market of fashion globally and it’s going to present a really big opportunity for us. You can add your purchase to your AirRobe, which is a virtual wardrobe, and it gives you an indicative price of what you would be able to resell that item for down the track. Yesterday, I bought a new blazer. It goes into my AirRobe account and pulls from our site the images, the descriptions, everything. That’s overcoming a pain point for a customer because when you want to sell something you have to take a photo of it and write a description. We’ve done all that hard work already to sell that garment in the first place. That’s how we might be able to lift some price points because people can see right then and there that, yes, the item is a bit more expensive but when you want to resell it, this is how much you’re going to get back.
How will you approach the office in 2022? Hybrid?
We’ve never been a business that has chained people to their desks and said, “Right, if you’re not here Monday to Friday, nine to five, then we don’t believe you’re doing your job.” So we’ll continue to be a flexible business. What do we want people in the office for? It would break my heart to see someone come into the office and just sit there to answer emails by themselves in the corner cubicle. We’re reconfiguring our office space and we’ll have more open-plan collaboration spaces as opposed to desks and chairs and people working in isolation.
What one piece of advice would you give a brand new CEO?
Listen to people throughout the entire organisation and learn about the business and how it’s operated before. You do need to respect the way a business has run and try not to change everything overnight. Listen, learn and then be brave enough to make decisions and take responsibility for them.
