Now that a year has passed since COVID-19 first made itself known across the US, many small business owners are taking a step back to process how the virus has impacted their business models. It’s no secret that it was a challenge to transform everyday practices into ones that met government mandates and kept people safe – but now, looking back, some entrepreneurs are recognizing that the changes they’ve implemented have helped their bottom line. Here’s how.
Small businesses have upped their digital presence
One of the toughest barriers small businesses have faced over the past year has involved brick-and-mortar operations: Specifically, businesses have had to close to the public, reduce occupancy or implement changes like frequent sanitization in order to comply with state and municipal guidelines. In response to these challenges, many businesses rapidly shifted operations to the virtual realm. Companies that were previously on the fence about refreshing their landing pages or starting social media accounts finally bit the bullet; storefronts began debating their ecommerce options; and service-based businesses found “contactless” ways to help their customers. And consumers shifted, too; now that just about anything can be done online, consumers are far more comfortable doing everything from telehealth visits to finding their next home on the web. Digital presence has always been a must-have even prior to the pandemic, but today, it’s a bigger opportunity than ever.
More teams than ever are working from home
Boutique firms, small creative agencies, rapidly-growing technology companies – you name it. If they don’t have to meet customers in person, they’ve likely found a way to let their teams work from home. Not only does this provide a slew of informal benefits for employees (like improved work-life balance, enhanced disability accommodations, and time and money saved on commuting), but it also provides major cost-cutting opportunities for the business itself. Businesses that know they’ll be working remotely for an extended period of time can avoid signing leases for pricey office space, and trendy startups can pause their snack subscriptions (for now). It’s a win-win.
A lull is a clean slate in disguise
Some entrepreneurs who have found themselves in a slow period during the pandemic have used deceleration as an opportunity to reassess and refresh. Though it’s always disappointing to see business decline, it can also be a blessing; companies that were previously in nonstop scale mode might benefit from a period of reflection on what really works and what doesn’t. While not a small business, GoDaddy notoriously took 2020 as an opportunity to reinvigorate its logo and renew its commitment to corporate responsibility. Other businesses are turning a break in brick-and-mortar operations into a chance to revamp their spaces and provide exciting updates to customers once circumstances dictate it’s safe to do so.
Many small business owners are stepping outside of their comfort zones
They say diamonds are formed under pressure, and the old adage rings true for business owners who are serious about helping their ventures thrive under unusual conditions. As contactless sales and services rose in popularity throughout 2020, many businesses found themselves capable of expanding into new markets and offering more customizable shipping options. Heightened social awareness has provided a catalyst for businesses to promote racial justice and gender equity, offset carbon emissions caused by shipping and delivery services and develop transparency in their daily practices. And because people tend to shop with both their needs and values in mind, this added level of consciousness has the ability to bring in waves of new customers and clients.
The obstacles presented by COVID-19 haven’t been easy to overcome – nor are they gone from our economy and from the world at large. But if time has proven anything, it’s that small business owners are persistent, innovative, and creative. Pandemic or no pandemic, that hasn’t changed.
That’s because you have to shell out designer prices for the London-based indie brand’s ergonomically designed, sleek modern-meets-’70s vibe, which are priced from £190 to £220, or $200 to $260. The line continues to grow, with two new styles just launching, a cat-eye frame named “The Ally” and a more oval frame named “The August.”
For the record, Lexxola’s CEO and founder is a millennial, and the 27-year-old Zane Saleh told Insider that since launching less than two years ago, in late 2019, they’ve viewed everything as an experiment. “That freedom of thought to just say ‘try everything’ has really allowed us to figure out what’s working quite quick and figure out what isn’t and just push forward,” he said.
Along the way, Saleh says he hit upon a Gen Z-friendly business model: direct collaboration with his customers. Instead of designing based off his own inspiration, Saleh said he uses a community-sourcing model to create styles – a creation process that has the potential to reshape fashion retail.
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It’s a strategy that’s worked, as Lexxola might be small and young, but it’s growing. The company has evolved from just Saleh running the whole show to four employees working remotely. At time of publication, several styles were sold out, available only for pre-order, and with the US being its biggest market, Saleh said the company is planning to open a warehouse in Virginia and headquarters in New York City this year so it can offer domestic shipping rates to US customers.
Lexxola has operated under pandemic conditions for the majority of its existence, and the brand is growing at an unlikely time, as 2020 hit the retail industry harder than the Great Recession did. From February to April of last year, Deloitte found, retail sales plunged by 20%, with an 89% decline in clothes and accessories. By June, Insider Intelligence predicted that retail sales worldwide for the year would be down 5.7% from 2019.
But Saleh said that being a young, agile, and digital company at a time when brick-and-mortar stores were closing left it uniquely placed to grow and gather market share. A solely online presence speaks to a Gen Z community which often shares and expresses itself digitally, he said. According to screenshots of Lexxola’s analytics dashboard that Saleh sent to Insider, Lexxola’s sales grew by over 5,500% from February 2020 to February 2021, and annual revenues for this year are projected to exceed $6 million.
Saleh spoke to Insider about launching Lexxola, growing it through the pandemic, and his community-led approach. What’s emerged is a brand made by a millennial for a Gen Z audience, with social media at its heart.
Made for the city
Saleh originally studied economics, but said he quickly realized finance wasn’t for him. He found himself in the art world for five years, and he began getting Lexxola off the ground while he was working at Sotheby’s. He ultimately left, his full-time job three months before Lexxola’s official launch.
Growing up, he said he noticed that sunglasses marketing campaigns were always about summer. “It was the guy and the girl running down the beach,” he said. “Whereas the eyewear experience that I knew was about wearing a product year-round, it was something for city life.”
He long wondered why there wasn’t a brand speaking to that concept, and decided to fill the gap himself. The year prior to Lexxola’s 2019 launch, the global sunglasses market was valued at $14.5 billion and growing, thanks to an increase in disposable income. While sunglasses stores declined in revenue during the pandemic, IBIS World found, it predicts revenue to grow as the the economy rebounds. Americans are now sitting on more than $1.6 trillion in savings, some of which will likely be deferred disposable income.
Saleh described beginning Lexxola as “diving into the deep end,” as he had no prior experience in the eyewear sector. He managed to source a factory in Italy and find a warehouse, both of which were hugely important, he said.
“When we first set up our warehouse, it was probably a bit early, but if we didn’t have that we’d for sure be out of business,” he said. “Putting the right building blocks into place in the first sort of six to eight months of the business, prior to the pandemic, really allowed us to springboard through it.”
A community-led approach
Saleh said he did everything when first launching, from packing boxes to answering customer service. Now that the team has expanded to four, he said he still has touch points in all aspects of the business.
Lexxola’s community-led creation process involves aggregating data on Gen Z consumers to create new styles for them. It’s a contrast from many fashion companies, Saleh explained, which are typically headed by a singular figure creating a product, putting it to market, and hoping that people like it.
“What we do is speak with our community,” he said. “We’re almost in a position where we’re a brand that actually acts as a service to create a product.”
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But Saleh said this strategy has some challenges, such as ensuring they have styles that meets everyone’s needs. Continuous iterations of new sunglasses can also be quite labor and time-intensive, he said, but ultimately worthwhile. He cited a time when the team gathered product-return data, which helped it make specific changes to a product that led to 90% fewer returns.
The data process also enable them to design an upcoming frame named “The Antonio” combines the brand’s two best-sellers, “The Jordy” and “The Damien,” in what Saleh says is “almost a mathematical form.”
Product evolution is “never finished,” according to Saleh, “it’s just something that can get better.”
Speaking to Gen Z
Lexxola’s community-led approach helped Saleh understand and cultivate a Gen Z community, Saleh said, along with strategically hiring full-time and part-time Gen Z employees.
Saleh said the company found its feet with influencers six months in. Since then, it’s been a “knock-on” effect, as “People see other people wearing them and they become aware of the brand … it just sort of balloons that way.”
It helps, too, that Lexxola capitalizes on some of the things that matter the most to Gen Z when deciding where to spend their money. It’s part of a growing genderless market that WWD considers the future of the fashion industry. In recent years, designers have been launching genderless collections and unisex lines to appeal to changing norms and the Gen Z consumer. Lexxola was a step ahead by launching a unisex brand from the start.
More than half (56%) of Gen Z consumers shop “outside their assigned gendered area,” Phluid Project founder Rob Smith said at a 2019 WWD Culture Conference.
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Sustainability has also been a focus from the get-go. The sunglasses are produced in factories fueled by renewable energy, dispatched from LED-lit warehouses, transported via eco-integrated carriers, and delivered in recycled cardboard packaging. Lexxola also donates 1% of its annual sales to 1% For The Planet Organization.
That’s a plus for the 62% of Gen Z who prefer to buy from sustainable brands, according to a consumer spending analysis by First Insight. They’re more willing than any other generation (72%) to pay more for sustainable products.
There, too, is Lexxola’s curated modern aesthetic. A quick scroll through its Instagram grid shows colorful close-ups and selfies of the fashion-forward artfully posing against a backdrop of city streets or nature, making it difficult to discern campaign shots from real-life photos.
Such an integrated feed is part of Lexxola’s social strategy, according to Saleh, who said his audience loves to see real people wearing Lexxolas in real situations. Once the company began creating campaign content that visualized this and ran it alongside user-generated content, he said Lexxola’s social platforms took off.
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“Gen Z are mobile natives, they’re digitally minded,” Saleh said. “They want authenticity and they’re extremely pragmatic.”
Right now, Saleh is focused on improving the way Lexxola designs new products. His team is currently working to develop an online page where customers can suggest new styles or colors they want to see.
What they’re really trying to do is build out more data points to inform future decisions for production, he said. “We try to build products that inspire confidence,” he added.
“Everyone’s still learning as we go,” he said. “It’s very much business as usual, and continuing to not rest on our laurels and improve.”
Tianni Graham, 27, remembers the “before times” – that is, the harrowing months before Telfar introduced its Bag Security Program.
It was early last summer and she, along with thousands of others, was stuck testing their luck each day trying to buy the wildly popular Telfar handbag whose celeb fans include Oprah, Selena Gomez, Alexandria Ocasio-Cortez, and Solange. But they often sold out before anyone could click ‘check out.’
It turns out, robots and resellers were buying products in bulk, making it harder for real customers to purchase them. So, last summer, Telfar introduced its Bag Security Program, in hopes of giving customers better access to its bags by allowing patrons 24 hours to pre-order any bag on the site, with no limits on how many can be purchased. The bag is then made to order, and shipped directly to the customer.
Suddenly, Graham, who is also a fashion archivist and consultant, had her green Telfar bag. It arrived right before Christmas and was a “present to myself,’ she told Insider, adding that other brands could benefit from implementing a similar program. “It would make things so much easier and make the customer feel like you care.”
The program’s success shows how a luxury brand can create accessibility without losing the allure of exclusivity. The old-school model for luxury brands states the product should be scarce and elite, but the next generation of high-end consumers and entrepreneurs are taking a different route.
Teflar is rewriting the rules of luxury, and this time, it’s not too hard for other brands to follow suit.
Telfar ‘white glove treatment’ is what next-gen luxury shoppers crave
Young consumers look less at price tags and more at brand values when determining where to spend their money; these next-gen consumers want sustainability, inclusivity, and a sense of community. The new “white glove treatment” when it comes to luxury shopping is a speedy online checkout from a brand that cares.
For Telfar’s latest drop this week, customers had the option to use the payment installment plan Klarna, making it even easier for those looking to obtain a bag. While customers will have to wait a few months before receiving the bag, people often spend years on a Birkin bag “waiting list” and most will probably never get one.
Shortly before Telfar’s program ended this week, a spokesperson for the brand told Insider it was, already, “going very well.”
Telfar started with an aim of inclusive luxury
Telfar was founded in 2005 by its eponymous founder Telfar Clemens and has dedicated the past two decades to building an inclusive business model.
In 2014, it released its now-iconic vegan leather handbag, which takes inspiration from a Bloomingdale’s shopping bag. The bags became widely available around 2018 after Telfar won $400,000 from the CFDA/Vogue Fashion Fund, allowing the company to expand production.
Clemens described his brand to The Cut as being “genderless, democratic, and transformative,” purposely seeking to challenge the notion that high fashion is only for a certain group of people, with the brand motto being “Not For You – For Everyone.”
As reported by FT, handbag sales in the US declined 18% between 2016 and 2019. Yet, Telfar stood out – in 2016, the brand earned $102,000, growing to earn $2 million in 2019. Last year, New York Magazine deemed its bag the “Bushwick Birkin” and the brand was on pace to earn eight figures, even as the fashion industry was expected to take a 90% loss in profits due to the pandemic.
Boston Consulting Group’s Head of Luxury Sarah Willersdorf told Insider that Telfar has checked all the boxes on what it takes to connect with next-gen luxury shoppers. She said the brand has a narrative that “evokes emotion” and properly intertwines timelessness, creative partnerships, and culturally relevant authorities. GQ pointed out Telfar’s customer base was built, not through influencers, but through “customer aspiration alone.”
Raising the bar for next-gen luxury
Brands like Telfar are important in proving accessible business models can be just as lucrative. Willersdorf expects other brands to follow similar strategies in a post-pandemic world, as shopping continues to pivot online.
“Luxury brands are always nervous,” Joseph Yakuel, CEO and founder of consulting firm Within, told Insider last year. “There’s so much risk to them tarnishing their brand reputation because luxury brand price points are only supported by their perception, and if their brand perception goes down market, their price point gets eroded very quickly.”
Clemens and his artistic director, Babak Radboy, said they aren’t worried about oversaturation. It’s about community, now. The new “white glove treatment” is making sure everybody gets a pair that fits perfectly.
One day before it was set to expire, on Tuesday President Joe Biden signed the Paycheck Protection Program (PPP) extension into law, extending federal aid for small businesses through May 31.
Five days ago, the Senate sent the PPP Extension Act to Biden’s desk, which extends the small-business lending program by two months and permits the Small Business Administration to continue processing loan applications through the end of June. In both the House and the Senate, the bill passed with overwhelming bipartisan support, and Biden declared the law a “bipartisan accomplishment.”
“Without signing this bill today, there are hundreds of thousands of people who would lose their jobs, and small family businesses that might close forever,” Biden said before signing the bill.
Lawmakers lauded the passage of the PPP extension, given that many small business are still suffering financial hits brought on by the pandemic. That’s why Biden included $50 billion in small business aid in his stimulus plan, including $7.25 billion specifically for the PPP.
According to recent SBA data, the PPP has given out 8.2 million small-business loans thus far, totaling $718 billion, helping many small businesses continue paying their bills throughout the pandemic.
Since it was established under the CARES Act in March, though, the PPP’s loan disbursement has come in for criticism. For example, although loans within the program are intended for businesses with 500 or fewer employees, some large companies got them, such as fast-food chain Shake Shack getting $10 million, which it later returned.
Separately, the Office of the Inspector General found the PPP had distributed duplicate loans to over 4,000 borrowers due to problems in the SBA’s controls, which would have to be paid back.
Both Democratic and Republican lawmakers have said the benefits of the PPP outweigh its detriments and are needed to provide pandemic relief to small businesses across the country.
“These loans have saved small businesses throughout our nation,” Sen. Ben Cardin of Maryland said on the Senate floor last week. “They would not be here today but for this program.”
There are two types of people in the world: those who wear old T-shirts to bed, and those who don’t.
Joel Jeffery, 33, and Molly Goddard, 29, the millennial duo behind the London-based luxury pajama brand Desmond & Dempsey, don’t mind if you’re part of the former.
Eventually, Jeffery said, people come around. Some of the investors they first pitched claimed to not wear two-piece pajamas, forcing the duo to revise their presentation, calling pajamas “something you wear to the breakfast table.”
Goddard’s old boss also wasn’t a believer. Then, they gave him a pair. “Now he’s on our VIP customer list,” she said.
Desmond & Dempsey, which sells pajama sets for about $150, saw sales skyrocket during the pandemic. It sits in a privileged position at the intersection of two multi-billion-dollar industries. First, the $10 billion self care industry. Second, high-end sleepwear, or as Brandi Neal wrote for Bustle the “fancy pajamas you usually only see in movies.” This category also encompasses nightgowns, robes, and slippers, and market researcher Technavio expects the market to grow by $19.5 billion between 2020 and 2024.
And Jeffrey doesn’t expect the momentum to stop anytime soon.
The brand was in the right place, at the right time
It’s hard to pinpoint how many people actually sleep in pajamas.
It’s this comfort, Jeffrey says, that people sought during the pandemic as the world fell into precariousness. Last year, the Washington Post, citing the Adobe Digital Economy Index, reported pajama sales increased over 140% in April 2020, compared to the month prior.
Last March and April, Desmond & Dempsey saw a 400% increase in sales. Its best-selling items were the two-piece pajama set. The company was able to deal with an increase in consumer demand because it decided to still place the orders that wholesalers canceled, restocking its top items and then selling direct-to-consumer.
Launched in 2014, the brand was named after Jeffery’s and Goddard’s grandparents, respectively. In its early days, Goddard used to personally email each customer asking for feedback, then send a code that would give them free monogramming if they told their friends about the company.
That referral program helped generate interest in the company at the start, and a similar strategy helped it get through the pandemic. It started an initiative that allowed people to nominate a friend to receive a pair of Desmond & Dempsey pajamas. All the person had to do was explain why their friend deserved it.
“People needed comfort and that’s what those pajamas provided,” Goddard said. “People were vulnerable and really suffering, and it gave them something to make them feel a little more creative.”
The market is expected to grow, Desmond & Dempsey is ready
The pandemic, in a sense, has helped accelerate the normalization of self-care and comfort.
Andreas Lenzhofer, cofounder of the Zurich-based sleepwear company Dagsmejan, told Insider he expects interest in the category to rise, and the focuses on personal health, wellness, and comfort are here to stay.
Adobe Analytics found that November pajama sales were up 200% compared to the year prior. NPD Group told Insider last year’s sales for pajamas costing $50 or more increased 3 times faster than average-priced pajamas, accounting for 17% of the pajama market.
Meanwhile, social media is helping these niche brands build an audience. Desmond & Dempsey has over 80,000 followers on Instagram alone. Other luxury sleepwear brands such as Lunya (whose sleep set goes for $232) and Olivia Von Halle (whose pajamas can cost nearly $600) have over 233,000 and 102,000 followers on the platform, respectively.
Dagsmejan told Insider it also ended 2020 with massive sales growth, seeing over three-times what it saw in 2019.
“People realized there was life to have,” he said. “[They] readjusted their spending patterns, and focused on where they could make a positive impact on their personal wellbeing.”
Now, with an influx of customers, Desmond & Dempsey’s next mission is now fighting out how to make the consumer demand stay, Goddard said.
Already, Desmond & Dempsey has collaborated with H&M and has expanded into slippers, nightgowns, robes, eye masks, and even diapers. To date, it has partnered with over 30 wholesale retailers, including Bergdorf Goodman, Selfridges, and online retailer FarFetched, and in October it will officially launch a kids collection.
Jeffrey and Goddard even want to open a store one day, and further expand their presence into the United States. The market might be crowded but if anything, but they are ready.
“We just have to change the spelling of pyjamas,” Goddard said.
Way back in 2011, Misha Nonoo was having brunch with some friends in Manhattan. She was around 25 at the time, sporting a jacket that she herself had designed.
By chance, a buyer for the brand Intermix was sitting one table over. “She said, ‘I love the jacket you’re wearing, where is it from?’ And I said, ‘Oh, I made it,” Nonoo recalled to Insider.
Next thing she knew, Nonoo found herself in the buyer’s office, showing off eight original designs. “I walked out with a purchase order for six of the eight pieces,” Nonoo said. It was worth $150,000.
A few months later, Nonoo officially launched her eponymous clothing line, and within two years, she became a finalist for the prestigious CFDA/Vogue Fashion Fund. In 2015, she was named one of Forbes’ 30 Under 30. That same year, she became the first designer to host a fashion show on Instagram. The next year, Snapchat.
Nonoo, now 35, told Insider she can’t exactly remember her first celebrity client but said her first clients were her friends and family whose support helped build the business – it’s just that Markle and Princess Beatrice happen to be in her friendship circle. Another friend, Facebook COO Sheryl Sandberg, was a key player in her groundbreaking Instagram fashion show. (Nonoo is married to Michael Hess, heir to the Hess oil fortune and an energy entrepreneur.)
Today, the brand counts celebrities such as Bella Hadid, Cate Blanchett, Meghan Markle, and Amal Clooney as fans. In 2019, she teamed up with Markle, then a working royal, on a clothing line for the women’s charity Smart Works. The sleek designs and sustainable ethos of Nonoo’s brands are some of the reasons it’s won such highly placed fans.
“I have always been a huge fan of Misha – personally and professionally,” stylist Sarah Slutsky told Insider. “I love the way she prioritizes uniform dressing. I think a formula for what to add to your closet is empowering and helpful for many women. I believe when you can build a wardrobe with pieces that are interchangeable, the options for feeling put together are endless and the result is confidence.”
Nonoo’s latest collection, entitled “The Perfect 10,” includes white collared shirts, cozy turtlenecks, and sweatpants, intended for the new on-the-go – just from the bedroom to the kitchen table for yet another Zoom meeting.
In an interview with Insider, Nonoo talks about her latest fashion collection, getting her start in fashion, and the future of sustainability in the industry.
Her brand doesn’t keep inventory and doesn’t have seasonal collections
Growing up, Nonoo always knew she wanted to start her own thing. Born in Bahrain, Nonoo relocated with her family to London at the age of 11.
She attended college between London and Paris, going to both the European Business School and the École Supérieure du Commerce Extérieur, studying international business and French.
At 23, she came to New York to work at a menswear tailoring company, which agreed to sponsor her visa. “I wanted to live in New York,” she said. “This was my way in.”
She has come a long way since that chance encounter in Manhattan. Today, A hallmark of her business model is that she produces everything on-demand, and does not create seasonal collections. The former was inspired by a situation that arose early on in her fashion career.
In the very beginning, she had worked with one retailer that placed an enormous purchase order. She was excited, she recalled.
“Then I quickly realized you only have a 10-week full-price selling period and your gross margin agreement means that every week you’re on sale, [wholesalers are] chipping away at that gross margin,” she said.
“The agreement is designed so that you’ll never win as a designer,” she continued. “It was always designed in the favor of the major department store.”
The store also decided to return any inventory that was not sold, leaving Nonoo with excess product. “That was a huge learning curve,” she said, adding that all the money that was being wasted could have easily put her out of business.
“Now I look back on that,” she continued. “That was the beginning of me starting to manufacture on-demand and to understand that I wanted to own my relationship with my customer and that I never wanted to be beholden to a major department store.”
That worked out well, as wholesalers were hit hard during the pandemic. Some filed for bankruptcy, while all were severely impacted by the loss in foot traffic as shopping pivoted online.
Meanwhile, because Nonoo now produces everything on demand, as manufacturing in China shut down, she could turn to Peru and Los Angeles for production without losing much money from wasted inventory.
The brand also began honing in on its social media strategy and was able to launch a loyalty program for customers, with the highest tier including a tailoring allowance and a personal stylist. For that, customers have to spend at least $2,800.
Consumers are educating themselves more on sustainability, Nonoo says
For those with the means, it’s about forging fast-fashion and buying pieces of clothes one knows they will reuse over and over again. That’s who Nonoo’s line seeks to service, the customers that want quality staple items that will be reused over and over again.
Even young people – many of whom still buy cheap fast fashion – have become conscious about how the industry is polluting and damaging the environment, Nonoo said.
“A lot of them use platforms like Threat Up and the Real Real, Poshmark to buy things secondhand,” she continued. “As opposed to buying virgin fashion that comes from a source like one of the major fashion brands.”
Aside from making seasonless products and not keeping an inventory, Nonoo’s brand has also eliminated single-use plastic from its supply chain and has plans to forgo using single-use polyesters.
Another trend that will follow long after the pandemic is seasonless fashion shows, Nonoo said. That’s ironic for Nonoo, as she made headlines years ago for being the first designer to host an Instagram runway show.
That opportunity came about one night while Nonoo was having dinner at the home of a friend of hers, Facebook’s Sheryl Sandberg.
Nonoo told Sandberg that earlier that day, she had toured Instagram’s headquarters and spoke to someone who works in the marketing and events department about how the fashion industry was quickly changing.
She relayed the conversation to Sandberg, who agreed that the industry was undergoing a shakeup. The idea of a virtual fashion show emerged.
“She said, ‘Well, Instagram can’t officially partner with anyone,'” Nonoo said. “But she was really incredibly helpful and walked me through what the parameters were and the lines we could cross.”
There were strict guidelines for the show, which, Nonoo said, helped her and her team be even more creative. But that didn’t make the task any easier. It was hard because an Instagram fashion show “hadn’t been done before.”
But now, Nonoo is leading the way to another runway disruption – hardly doing them at all.
“It’s about consuming things when you need them, that fit into your life, and that are going to work for you for a long time,” she said.
Nonoo said she thinks the pandemic has disrupted the industry so much, that even when shows fully come back, “I don’t think fashion weeks are going to be the same.”
Kara Goldin is the founder and CEO of multimillion-dollar beverage company Hint.
When the pandemic hit, she personally helped stock shelves at stores like Target with her product.
She says getting your hands dirty as CEO teaches you a lot – like how to make strategic decisions.
This article is part of a series called “Leaders by Day,” which takes a look at how prominent business leaders are tackling various challenges in today’s economy.
In the early days of the pandemic, when many CEOs were sitting in hours of executive meetings on shifting their strategy or fretting over financial documents to see how they could avoid layoffs, Kara Goldin – founder and CEO of multimillion-dollar beverage company Hint – was using some of her precious time to do something surprising: stock shelves.
Every day, she would help her team by going to grocery and big-box stores near her home in Marin County, California, to see if their unsweetened, flavored water had flown off the shelves like most other products.
When it was sold out, she’d work to get trucks of Hint water sent directly to stores, sometimes even going so far as to unpack them herself. “I was working at Target San Rafael and a store employee gave me additional space, saying how impressed he was to see the founder stocking shelves,” Goldin told Insider in August.
This unconventional move got Goldin more than extra shelf space. Here are a few of the ways she feels being unafraid to get her hands dirty helped her company not just survive but succeed through uncertain times.
It helps you and your team practice resilience
While delegation is a critical leadership skill and you often want to trust the experts you’ve hired to manage different aspects of your business, “the buck stops with you as the CEO,” Goldin told Insider. That means when the going gets tough, you might have to dive in and help the team get going.
Goldin said that, while your employees may be great at what they do, many of them don’t have the learned resilience that leaders and entrepreneurs have gained from all the challenging times they’ve been through before. It’s your responsibility in moments of uncertainty to help your team problem solve and see possible paths forward.
“During challenging times, you need a leader who is going to set the course,” Goldin said, adding that’s why “the best CEOs today build great teams to be able to manage the day-to-day, but also never lose a handle on the different aspects of their business.”
It teaches you how to make strategic decisions
Stepping down and doing some work on the ground floor can also be a great way to inform your high-level, strategic work as a leader. After all, there’s no better way to figure out the problems you need to solve than getting in the weeds yourself.
Through her experience stocking shelves, Goldin was able to see how she could redistribute her team to solve immediate problems and prevent having to lay anyone off.
After seeing how panicked consumers were about whether they’d be able to get basic essentials, she and her team planned a massive campaign reminding customers they had plenty of stock on their D2C website – ultimately leading to a 300% growth in D2C sales of their product. This also led to the decision to delay the launch of their liter bottles in favor of creating a hand sanitizer so consumers could have more and better options for staying safe.
“Watching exactly what’s going on in the market and how can you solve the customer’s problem is a great way to keep top of mind with the consumers out there,” Goldin said. Plus, doing some of the day-to-day tasks can be a great way to get your hands on market research.
It builds trust with your team
Perhaps most importantly, doing some of the dirty work yourself allows you to lead by example and ensure you’re not asking your team to do anything you wouldn’t do yourself – something that becomes especially important when people are afraid for their safety.
Goldin – who had long-term employees ask if she was trying to kill them when she suggested they needed to go into stores – realized she needed to go in herself to ensure it was a reasonable ask for her team.
“I’ve never been in the military but the best leaders in military history did exactly the same thing,” she said. “You don’t sit there and send your troops in and put their lives on the line – you jump in.”
By “putting herself into the scrimmage,” Goldin said, she was able to determine whether she was making the right call and also share strategies with her team that made going into stores feel safer for her. Plus, her team appreciated that she was so willing to put herself on the line.
“I don’t think you can sit there and live in your glass castle as a leader anymore,” Goldin said. “I think that you have to actually jump in and make sure that you’re moving people in the right direction.”
When Insider first spoke to Marina Raphael in July 2020, she was in the midst of leading her luxury handbag brand of the same name through the pandemic.
A member of the famed Swarovski crystal family, Raphael launched her eponymous line the year before. It was being sold in high-end retailers such as Moda Operandi; it also captured the attention of Maxima, Queen of the Netherlands.
But now, the pandemic had disrupted in-person shopping, supply chains, and manufacturing. Halfway through the year, it was too soon to have confidence in what the rest of the year would bring.
“As a young entrepreneur, everything was just moving so quickly,” Raphael, 22, told Insider in a recent interview. “But a good entrepreneur has to adapt to any situation and find quick and flexible solutions.”
Now, a few months into 2021, she reflects on her company’s record growth. It turns out, luxury consumers never actually stopped splurging on high-priced goods during the pandemic. Wealthy patrons put their money into handbags, artwork, and fine jewelry – investment categories believed to be less volatile than the stock market.
Raphael, whose bags range from 500 to 1,500 euros ($600 to $1,800), said sales skyrocketed last year, though she declined to share exact revenue figures. The team re-vamped their social media strategy, added charity initiatives to purchases, and even reduced the physical size of its products by 50% to adjust to, what she described as, the new reality of customers’ needs: “carrying less.”
The brand launched collaborations and partnerships, including one with French skincare line Vichy, and expanded its own line to create cosmetic pouches and keychains.
It also released a sustainable collaboration, using upcycled leather and cruelty-free leathers with luxury retailer Luisaviaroma and another line with art director Evangelie Smyrniotaki, which sold out in its first two weeks. Next, the company is about to launch a line with Swarovski Creative Director Giovanna Battaglia. She’s projecting a 420% increase in sales this year.
The luxury brand stayed grounded through hard times by donating 20% of sales
Raphael’s company is headquartered in Greece, but its operations are spread throughout the world. Public relations for the brand is in London, while the sales agent is in New York; quality control is in Australia, and bag production is in Florence.
In March 2020, the brand received its spring-summer collection, which gave it stock until August. It combined that with leftovers from the previous collection, but still sold everything by June, she said.
Having a diversified supply chain helped, however. When factories in Italy closed, quality-control in Australia was able to pick up production. The team’s small size of 14 (six of whom joined during the pandemic) made it easy to communicate, despite the time differences. And because retailers were closed, the company didn’t have to worry about shipping out the fall-winter collection.
Another challenge for Raphael was communicating via WhatsApp and Zoom, especially since she had to design handbags without ever touching the fabrics or physically seeing the final product.
At the same time, the brand had to figure out how to sell a luxury product during an ongoing global health and financial crisis. The company couldn’t just stop selling or making the bags, Raphael said. “Then our suppliers would have a problem, our production team would have a problem,” she continued. “They would lose their jobs.”
To great success, the company decided to donate 20% of all sales to charities such as Black Jaguar White Tiger Foundation and The Hellenic Pasteur Institute. Luxury retailer Moda Operandi implemented a similar strategy last year to huge success, reporting that if an item was attached to a charitable cause, shoppers were willing to spend full-price on it, even if another promotional sale was happening at the same time.
“I think that’s why we didn’t feel guilty about promoting the product, because with every sale we were helping in some way,” Raphael said.
To promote the collections, Raphael’s company began mailing puzzles and other “interactive fun stuff” to patrons. That was very successful too, she said.
“Getting something delivered to your house makes it feel more personal than at a fashion week where you are running to 15 different showrooms,” she said. “That was too much, too fast.”
In the early months, the team was in a state of panic
Raphael credits the success of this time to her team. In the early months of the pandemic, she recalled, everyone was in a state of panic. So she took it to herself to see how she could motivate her employees during this time, listening to their feedback in order to adopt new business strategies.
Smyrniotaki, the content creator and art director, told Insider that Raphael’s “strong personality” and keen leadership skills are what helped get their collaboration off the ground during this time, even with the disruptions. Her bag with Raphael was made with 5,000 Swarovski crystals to represent brighter days ahead. “It is the perfect allegory for the brighter future we see ahead,” Smyrniotaki continued.
Sometimes, Raphael still thinks about those early months of the pandemic. Customers from the United States, especially, were contacting the company in haste, trying to figure out how soon their products would arrive.
“Customers were saying, ‘we want our orders sooner – can you send us the tracking number?’ We have never experienced that before,” she said. “We were questioning, where are they going with the bags?”
Maybe it was to buy themselves gifts to make themselves feel better, she ponders; maybe they wanted to invest in nice things or were just bored at home. It’s more likely a mixture of all of the above, Insider previously reported.
That, or maybe people just really wanted another tote bag.
To continue providing aid to small businesses recovering from the pandemic, the House voted on Tuesday to extend the Paycheck Protection Program (PPP) by two months, ahead of its expiration on March 31.
The bill to extend the PPP had been introduced on March 11 by Small Business Committee Chair Nydia Velàzquez, Ranking Member Blaine Luetkemeyer, Rep. Carolyn Bourdeaux of Georgia, and Rep. Young Kim of California. Less than a week later, the House overwhelmingly voted by 415-3 to extend the program through May 31 to avoid a lapse of aid.
The program has provided small businesses with $700 billion of emergency loans to date, according to a press release.
“Based on recent economic data and the demand for PPP loans, it’s clear that small businesses still need support. We are making progress in our public health fight against this virus, but this pandemic continues to impact communities across the country, and we can’t let up on our efforts,” Velázquez said in a statement. “By providing small businesses with two more months to apply and giving the SBA [Small Business Administration] an additional month to process applications, we will help ensure critical support isn’t cut off.”
Under the bill, the SBA has until June 30 – a month after the PPP ends – to continue processing loan applications, giving small businesses the chance to continue receiving aid after the Program expires.
Since it was first established under the CARES Act in March, the PPP has encountered a host of issues with loan distribution. For example, although loans within the program are intended for businesses with 500 or fewer employees, the fast-food chain Shake Shack received a $10 million loan, which it later returned.
And recently, the Office of the Inspector General found that the PPP distributed more than one loan to over 4,000 borrowers due to flaws in the SBA’s controls.
However, despite the flaws, small businesses have not yet recovered from financial hits the pandemic brought on, emphasizing the need for a PPP extension. In President Joe Biden’s American Rescue Plan he signed on March 11, $50 billion was set aside for small businesses, including $7.25 billion specifically for the PPP.
The bill now heads to the Senate, where it may be passed before members leave Washington in mid-April.
“As America begins to open up for business and vaccines become more widely distributed across the country, we must provide targeted relief for small businesses that need it most,” Luetkemeyer said in a statement. “This bipartisan legislation provides a commonsense extension to the Paycheck Protection Program and the tools for Main Street USA to contribute to their local economies once again.”
Small business-owner Andi Rosenberg lost tens of thousands of dollars last year when her Shopify account was hacked.
Starting on November 23, 2020, payments from her Shopify sales began being deposited in an unknown bank account without Rosenberg’s knowledge. On her Shopify account, Rosenberg could see the daily sales being paid out. But, her bank account, which she only checks once a month, wasn’t getting any of the payouts.
On December 29, a Shopify support specialist emailed her about “detected suspicious login activity,” and she needed to confirm her bank account and identity. That’s when Rosenberg checked her own bank account and saw she was missing thousands of dollars from her Shopify sales.
She was sick to her stomach, and has been since.
She confirmed her identity and her bank account with Shopify over the course of several days via emails, which were viewed by Insider. The company eventually gave her the payouts from December 30 to January 14, which had been frozen by Shopify until she could confirm her identity and account. The payouts added up to $22,816, based on payment confirmations provided to Insider.
But she was still missing $55,656 in payouts made to the hacker’s bank account for the pay period from November 23 to December 29. She said when the Shopify account was apparently first hacked in November, she never received a notification that her bank information was changed.
“I’m a small business; you could put me out of business,” she said she told customer service on the phone. “It’s just sickening.”
Rosenberg, owner of clothing and jewelry line Hipchik, has sold her products through department stores for years. In 2018, she opened a Shopify account and loved it.
As store sales dwindled, Shopify helped her get through the pandemic, and she had her best year yet online, selling nearly $1 million of merchandise.
Since the missing payments, she says she’s spoken to Shopify’s customer service and the legal team and even reached out to company executives on LinkedIn. In an email seen by Insider, a customer service representative said the legal team could not give Rosenberg advice. The representative added that, “At this point I recommend that you proceed with private legal counsel in order to work towards recovering missing funds, and moving in a productive direction with this investigation.”
She has been in talks with outside lawyers to see if they can help get her payments back, but she’s worried about the legal fees on top of the losses she already incurred.
Insider asked if Shopify knows how frequently sellers’ accounts are hacked, what security measures are in place, and how sellers can get their money back if it’s stolen. “At Shopify, we take the privacy and security of our merchants very seriously,” a spokesperson said. “We go to great lengths to help merchants manage their accounts more securely by providing guidelines and recommendations. We recommend that all merchants enable two-factor authentication to provide a more secure login process and to help prevent unauthorized access to a merchant’s admin.”
The company did not comment on Rosenberg’s case, or answer questions as to why it took several weeks to notice suspicious logins on her account and why the company has not reimbursed her for her lost payments.
Shopify, based in Ottowa, Canada, is an e-commerce company that’s known for helping small business owners attract customers online. Fakespot analyzed Shopify, which went public in 2015, and found that about a fifth of sellers deserved a “caution” or “warning” sign for activities like selling fraudulent products or not delivering items. Shopify told Insider that it has closed thousands of stores, and it regularly implements new measures to address fraud or other violations.
Shopify sellers have also faced fraud from buyers, who order personalized products and then ask for refunds. In 2018, Shopify rolled out a prevention system to protect sellers from these fraudulent buyers, TechCrunch reported.
If you’re a seller and believe you have lost money on Shopify because of a stolen or hacked account, reach out to the reporter of this article, Natasha Dailey at firstname.lastname@example.org.