Macy’s Exclusive Workshop Schools Entrepreneurs How to Make ‘Magic’
Last Friday, 12 people walked out of the Macy’s New York flagship store on 34th Street and into the weekend better equipped to face the world. It was the first day of the rest of their professional lives, their careers and the future of their small businesses.
After four and a half grueling days of rigorous classes, they became the fourth set of graduates of Macy’s prestigious and ultra-exclusive minorities and women-owned business development workshop program.
Called simply the Workshop at Macy’s, it is an exclusive vendor retail development program designed to give select high potential minority and female business owners the tools to better succeed and sustain growth in the retail industry.
“The idea of the program is to build a pipeline of new entrepreneurs and resources that can benefit the entire industry. Helping companies acquire the tools and skills necessary to scale and really be sustainable in the industry.”
Shawn Outler is group vice president leased businesses/vendor collaboration/multicultural Business vevelopment at Macy’s. She is also the author of the program.
The program now in its fourth year, takes candidates who own businesses that show blazing potential and makes them better.
And by the way it doesn’t cost a dime, it’s all free.
Outler says, “We are looking for companies that are minority or women-owned who have unique products that we think will be assets to us and our customers. Filling a wide space that we think our customers or someone else in the industry will benefit from.”
To get a clearer picture of how exclusive and invaluable the program is, consider the following.
More than 38, 000 people logged onto the website when the application process started in September 2013.
By February, just 1, 000 applications had been accepted. Of the 1, 000 applicants, Macy’s accepted only 12.
They include Michael Hyacinth; his business, Fashion has heart which brings fashion and awareness to the struggles of wounded warriors.
The Lip Bar, a cosmetic line that allows clients to create their own lipstick.
Marcia Budet, a jewelry designer who offers creative, non-traditional design proposals in fine jewelry.
And Crystal Streets, a stylist and jewelry designer.
“You gotta know what you want. What you can give up within your business and still make money.”
Outler discusses the importance of Macy’s selecting the right candidates. “This year we interviewed about 21 companies and selected 12. Last year, we interviewed 50. But this year, we got really specific about what we were looking for and the criteria. We really were looking for companies that we knew had a true opportunity to scale. We are trying to shore up a pipeline so it has to be with people we think really have potential.”
So what did the 12 have that 38, 000 others didn’t?
The program sought out businesses 2 years and older looking to position themselves to scale with major retailers; fairly small businesses relative to other vendors with which Macy’s typically does business. They make sure they have been in business for at least two years, some of them doing business of about a million dollars a year, some a bit less.
“You need two years of financial history that we can give to Babson College our partner. They are the number one entrepreneurial college in the country. Without that two years of financial history, it is really hard to assess a candidate’s potential or capabilities. Babson analyzes data to determine what their financial standing is and then go from there.”
Outler also says, “A lot of them may have great ideas, but have only been in business for a year, and can’t articulate best sellers, the core of the business and how to really take advantage of the materials in the class. We also encourage people to apply again, if they came close to being accepted over the last two years, but didn’t make it. There is a woman in class this year that didn’t make it last year. She didn’t have enough of a financial history, and didn’t properly grasp how to work with her customers and we encourage people to go back do some more work and apply again.”
Class in Session: Teaching creative talents to think like accountants.
Classes begin with a half-day session on a Monday and run until a final presentation and graduation ceremony on Friday.
According to Outler, “They start off in one place on Monday, teeming with confidence and then by Friday, some of them are suddenly not so sure. We do peel back the onion. Some of our grads find they might need an extra year to raise more capital, to add people to their teams or to build a better marketing strategy.”
The half-day session on Monday teaches a master class on how to move from conception to building a business and understanding the intricacies on how to work with major retailers.
The class objective is to, “Make everyone understand that you may have a great business today on your own, but when you’re working with a partner, there are other factors to be considered because you are in their house and that house is built a little bit differently.”
On Tuesday, candidates are subjected to their first full day of class. They are taught about identifying the customer and sizing the market. How to understand the customers that a potential partner has and how they can align that with the direction of their respective companies. At the end of the class, candidates are expected to really get a sense of whether or not a business opportunity is big enough to invest in.
The next session is all about building brand identity. Classes instruct on how to drive brand awareness and how the candidates can use whatever marketing tools they have at such an early stage in their business to drive sales.
“Often, they usually have a large following on Facebook or Twitter or on their own site. So how do you utilize that following to drive traffic to your partner and drive business as you’re building you’re brand? How do you get these elements to work for you?”
Outler says the workshop tweaked their marketing session this year.
“Our class didn’t realize the resources they already had available to them. Some of them had 18, 000 twitter followers, or 20, 000 Facebook fans, and didn’t understand the fundamentals of how to leverage those people to drive sales.”
Their next class is the dreaded retail math. A nerve-wracking numbers tutorial that teaches the metrics behind a business and figuring out strategy to maximize each opportunity. They are also taught Electronic Data Interchange (E.D.I), the language retail companies use to speak to each other when transmitting orders.
“We give everyone preparatory work before coming to class. We send out a math test so we can assess everyone’s knowledge and based on that we build a two-hour session that helps them understand how their merchant partners can utilize the business. Margin, markup, turnover, sell-through. This is the language we use to talk about and analyze the business and we want our vendors to be versed in that as well. They are looking at cash flows and balance sheets and how financial systems work together. We really want to educate them on that because it is critical. Anticipating what is happening and how to react to it. Can you afford a markdown? Do you have cash available to support a markdown. It affects whether or not your buyer is going to reorder and your balance sheet.”
Finally, all candidates have to make a final presentation to a group of judges before being considered for graduation.
Helping Minority and Women Owned Businesses Prosper
The goal behind the program is to target minority and women-owned businesses and provide them the opportunities to succeed. To teach them to allocate resources in a better way to best drive their business.
Outler explains, “When I first took on the role about five years ago, we set out to grow minority and women-owned businesses, we had a few that were on board, but we realized that they weren’t growing. And so, I interviewed those companies as well as the buyers who were doing business with them, just to assess the opportunities or gaps. We soon realized that most of the companies were unaware of, or educated about what it took to be successful and how to measure their business the way we do. They also had a presence online but didn’t know how to translate that into a retail environment with either an online partner or a brick and mortar.”
She says, “The realization of what their business could be or their full potential was never fully fleshed out between the two parties.”
More importantly, the aim of the program is to teach how to fill some of those gaps and how to fill specific needs.
She says, “Most new business owners shoot from the hip. Our vendors were not educated about going into meetings with major retailers to articulate what they’re looking for, beyond getting the deal. Helping them step back and look at their business from a holistic point of view and be strategic about the direction in honing that,” that’s one of the missions of the workshop.
Best Class to date?
So how did the class this year stack up against the others?
Macy’s says they took a hard look at the program and made some readjustments. They strengthened their marketing classes, boiling down on the nuts and bolts that a small company with limited resources could take advantage of.
For instance, “We can teach them how to match colors. A color may look good in a display window in a brick and mortar, but not necessarily work for a dot-com. There are some dresses that will never be on Macys.com but will be in a store. It all depends on how a customer shops.”
No Guarantees for Success
Outler says she had people whose products she absolutely loved, who didn’t necessarily have the financial wherewithal or the strategic mindset to get there. And people who were just the opposite. They had great financials but didn’t have big enough creative opportunities for people to sink their teeth in. People who had solid ideas but didn’t figure out how to broaden it out into an attractive package with the right partner.
And the workshop itself doesn’t necessarily guarantee success. No one is guaranteed placement to showcase their merchandise at Macy’s, simply because they graduated the program.
Outler says, “There are people from our first class who are yet to launch with major retailers. They’re still online, doing their own little thing, but are yet to partner with someone in a big way.”
For those who can master the process, the sky could be the limit.
“We launched nine businesses so far, with some of our grads. But remember, the workshop is to build a pipeline within the industry, not just Macy’s. Not every vendor in the class wants to partner with us and vice versa. Walmart, Target or Saks could be a better fit or partner. What you envision for your line may be different from what it is.”
Some game changers from previous classes include Urban Intimates. Their marketing pitch or sweet spot was a Victoria’s Secret style line for large women.
They also just launched Mateo Bijou, a jewelry line for men, utilizing leather and semi-precious stones.
You have to know what works for you, and come in with conviction and push hard to sell that. Macy’s wasn’t enthused about putting Bijou’s merchandise on display, but he convinced them and now he’s one of their top sellers.
Outler also had advice for budding entrepreneurs: “Most big retail owners created their business out of a personal need and then driving that demand, before realizing that there are partners out there like a Macy’s or a Saks that embrace the idea of partnering with them.”
Next Year’s Workshop
Next year is the fifth anniversary of the workshop and Macy’s is planning to go big. They are playing around with an idea to showcase former grads and invite retailers to see what they have to offer.
Outler wouldn’t change much from when she started the program four years ago.
“The first class was like no other, just because we didn’t know the impact that we will have on those companies. It meant everything to us. To help someone connect the dots and make that leap. When we built this from the ground, I didn’t think we could do it to this extent. The first class was great but this last class for me, the one we just completed, just nailed it. I think because we selected the best companies, and I think this group was at a level where they could receive it and turn it quickly into action and that magic happened for them fairly quickly.”
Over the next couple of days, Black Enterprise will have profiles on some of the 2014 workshop grads and the past grads who have gone on to do big things.